Second Year in a Row of Lower Home Sales Volume in Waterloo Region - will 2024 be the rebound year?

 

There were 6,623 homes sold through the Multiple Listing Service® (MLS®) System of the Waterloo Region Association of REALTORS® (WRAR) in 2023, a decrease of 14.8 per cent compared to 2022, and a decline of 23.2 per cent compared to the previous 5-year average for annual sales. 

On a monthly basis, there were 285 homes sold in December, a decrease of 0.7 per cent compared to December 2022, and 25.6 per cent below the previous 5-year average for the month.

“It should not be a surprise to anyone that for the second year in a row, the housing market in Waterloo Region has been affected by higher interest rates, resulting in a significant decline in annual sales,” says Christal Moura, President of WRAR. “This year’s sales reached their lowest point in over two decades.”   

• The average price of a detached home was $848,151. This represents a 2.6 per cent increase from December 2022 and a decrease of 4.7 per cent compared to November 2023.
• The average sale price for a townhouse was $617,023. This represents a 0.8 per cent increase from December 2022 and an increase of 1.2 per cent compared to November 2023.
• The average sale price for an apartment-style condominium was $490,816. This represents a 5.0 per cent increase from December 2022 and an increase of 9.0 per cent compared to November 2023.
• The average sale price for a semi was $613,283. This represents a decrease of 0.5 per cent compared to December 2022 and a decrease of 0.5 per cent compared to November 2023.

On a year-to-date basis, the average sale price for all residential properties in Waterloo Region decreased 7.7 per cent to $786,033 compared to 2022.

• The year-to-date average price of a detached home was $917,907. This represents a 6.1 per cent decrease compared to 2022.
• The year-to-date average sale price for a townhouse was $653,138. This represents a 9.0 per cent decrease compared to 2022.
• The year-to-date average sale price for an apartment-style condominium was $481,877. This represents a 9.0 per cent decrease compared to 2022.
• The year-to-date average sale price for a semi was $677,831. This represents a decrease of 7.9 per cent compared to 2022.

“Waterloo Region’s slowing housing market echoes the overall slowdown we are seeing in the broader economy,” says Moura.”

There were 287 new listings added to the MLS® System in the Waterloo Region last month, a decrease of 6.2 per cent compared to December of last year and a 17.9 per cent decrease compared to the previous ten-year average for December.

In 2023, 11,528 new listings were added to WRAR’s MLS® System, a decrease of 14.4 per cent compared to 2022, and a 4.4 per cent decrease compared to the previous ten-year annual average.

The total number of homes available for sale in active status at the end of December was 779, an increase of 36.0 per cent compared to December of last year and 5.8 per cent above the previous ten-year average of 736 listings for December.

The number of months of inventory is up 55.6 per cent compared to December of last year, but still historically low at 1.4 months. Between 2010 and 2015, December’s rolling 12-month average was 3.5 months. The number of months of inventory represents how long it would take to sell off current inventories at the current sales rate.  

The average number of days to sell in December was 30, compared to 25 days in December 2022. The previous 5-year average is 23 days. 

The average days to sell in 2023 was 19 days, compared to 14 days in 2022 and a previous 5-year average of 18 days.

 “While the dream of homeownership is alive, it is not quite well,” says Moura. “Housing continues to be less accessible to too many people in our region. This speaks to the pressing need for not just more housing to be built, but housing that spans all forms and economic strata, to ensure everyone has a suitable place to call home.” 

Those requiring specific information on property values should contact a local REALTOR®. Working with a Realtor is the best way to get a complete picture of the property and community you are considering.

View our HPI tool here to learn more: https://wrar.ca/hpi/

How to Select the Right Flooring for Comfort and Style

Choosing the right floor for your home is an important decision. Not only does it set the tone for the whole interior of your home, but it’s also the foundation for everything else you put in a room. Your choice should fit the look of your home and the way your family lives.

Each family is unique and will have different demands and expectations for their flooring choice. A large family with kids will have a different set of needs than a retired couple. Pet owners will have a particular requirement as well. Allergy and asthma sufferers will need to keep a clean and dust-free environment.

When making a decision about flooring, keep in mind such factors as design options, comfort, warmth, safety and maintenance. And don’t forget you can have fun with colour too.

Carpet
Carpet is the right choice for light traffic households; the warm and comfortable feel makes it ideal for bedrooms and family rooms. Carpet is an attractive addition to a room and the colour choices are virtually unlimited. It is however, high maintenance—regular vacuuming and shampooing are mandatory, and stains are a constant worry. (Price installed: $18 - $30 per yard)

Hardwood Floors
The look of brand new hardwood floors, or even newly refinished hardwood floors, adds an unmistakable quality and value to your home. Wood flooring can add elegance to any room and works well with most kinds of décor. However, they are sensitive to climate changes and also susceptible to water damage, and need constant maintenance. Hardwood floors can also be quite cool in the wintertime.

Another alternative to hardwood flooring is the new generation of products, known as Engineered Hardwood Flooring. This type of wood has been developed to make a more efficient use of wood that takes substantially less hardwood to cover the same area as with a solid wood. Therefore, it saves you money and allows you to enjoy the new floor knowing that you have selected a product that is environmentally friendly.

Hardwood floors are ideal for halls, living and dining rooms, and you can easily use area rugs on top to complement your decor. (Price installed: $7 - $12 per square foot)

Ceramic or Porcelain Tiles
Ceramic tile can give your home that “designer look”. Tiles are available in many evolving designs that can create an incredible floor and suit everyone’s tastes.
Because of their easy-to-clean water-resistant nature, ceramic tiles are the best choice for kitchens and bathrooms. However, make sure you select non-slip tiles. (Price installed: $7 - $30 per square foot)

Vinyl Floors
An inexpensive choice in flooring, the new generation of Vinyl Floors are made durable and can add a real “designer’s touch” to your home. They are available in tiles and sheets, Double-thick vinyl is ideal for damp areas like bathrooms.

Vinyl floors are vulnerable to scratches, tears, stains, and wear. (Price installed: $10 - $30 per yard)

Laminate Floors
The floating nature makes Laminate Floors quite simple to install, and the range of styles and colors is virtually endless—from simulated wood and tile to creative and decorative choices that will provide any home with an amazingly durable and beautiful floor.

Laminate flooring is easy to care for which makes it suitable for high-traffic areas. (Price installed: $6 - $12 per square foot)

Many people are now choosing a combination of wood flooring, laminate, oak, and carpet in their home to enhance the beauty of the flooring and of course their home. However, style and comfort are in the eye of the beholder and you are the one that will ultimately be enjoying the flooring you choose. Choose a combination of flooring options that fits your own style and needs so you can be happy with your choice later on.

Important Things to Consider When Purchasing a Condo

Condominium sales are booming in many urban areas in Canada especially in large cities such as Toronto and Vancouver, with several buildings being developed. Today, condominiums continue to appreciate in market value at a rate that is almost as fast as that of single-family residences making condos a good investment.

Buying a condo with features that are in high demand will maximize the profit on your real estate investment and create an enjoyable condo living environment.

A condo with a view
A spectacular view is an important factor in deciding the value of a condo unit. A unit with an unobstructed view of the cityscape or a lake is much more preferable to a view of an industrial building or a neighbour's kitchen. Choose a south or west-facing unit that offers optimum light, which can make smaller spaces look larger. Balconies and patios provide desirable access to the outdoors, which is highly sought after by condo dwellers. Although these features will cost a premium, they are more than worth the investment and will help in getting a top price when it comes time to sell.

Condo maintenance fees
Buying a condo with a relatively low maintenance fee is a smart choice. Many condos have amenities that include gyms, swimming pools, squash courts, party rooms or rooftop patios. The cost of these features will result in a higher monthly maintenance fee. Condo buyers should consider whether they will make use of these facilities in order to justify paying a higher maintenance fee.

High-demand condo features
Look for condos with modern kitchens and bathrooms that not only provide immediate aesthetic appeal but are in great demand by buyers. Hardwood floors are a very popular feature in condos, not only offering a stylish appearance but also providing a desirable, easy-to-clean alternative to stain-weary, allergen-inducing broadloom.

Storage space
Storage space is important because of the small size of the condo unit. Some condos include a storage locker in the common areas of the building. Make sure there is enough space for your essential seasonal items – such as a bike, skis, snowboard, hockey gear, baseball equipment, Christmas tree, etc.

Car parking
As parking in large cities can be scarce, a condo that has a parking space included is a very good investment. Ensure that the building has ample visitor parking or that there is available street parking in the neighbourhood. Many condos in the downtown core provide no visitor parking, leaving the costly option of parking in a public parking lot.

Building security
While having a security guard on site does provide added security, keep in mind that this expense will increase the maintenance fee.

Owner occupancy rate
Is also important to find out who occupies the other units of the complex. Owners occupying their suites have an invested interest into the building and typically take better care of common areas.

Do not get caught up on the looks and cosmetics of a condo. Go back at least a couple of times to view all the things you may have overlooked or didn't consider when visiting the first time.

Condominium units have become a wise alternative to owning a house. This is not surprising, as living in a condo can be more convenient than living in a house. A condo is ideal for individuals living alone, small families, and older people. And because condos are smaller, they are less expensive to maintain.

The Top Ten Features Most Home Buyers Are Looking For

Before making the decision to buy, people shopping for homes consider many factors, including the location of the house, the school district, the size of the lot, and also interior features. Most buyers insist on a house that grants most of their wishes, but shoppers often settle for a house without getting everything they want.

When it comes to certain interior features, many are willing to spend thousands of dollars above the price of the home to have specific features included. At least 60% of buyers said they would be willing to pay more for central air conditioning, new kitchen appliances, and a walk-in closet in the master bedroom if they did not already have these features.

Let's take a look at today's most wanted home features

1. Open concept floor plans — Today’s home buyers desire a floor plan that flows seamlessly from one room to another. An open-concept floor plan may not be a feature of many older homes, however, in most cases, it can be created with the simple removal of a wall or two. 

2. Eat-in modern kitchens — Kitchens continue to be the social centre of the home. A beautiful kitchen with large islands that serve a multitude of roles, from food preparation station to homework spot to eating area, is becoming a must-have feature for many home buyers.

It’s very easy to spend tens of thousands of dollars on a kitchen remodeling project, however, there are many ways to update a kitchen without breaking the piggy bank.  Knowing what the current trends are for kitchens is extremely important to keep in mind when completing any remodel or update.

3. Energy-efficient fixtures and appliances  — With energy costs on the rise and growing interest in protecting the environment, today's buyers are conscious of buying homes that are green. Energy efficient appliances and new HVAC (heating, ventilation and cooling) equipment are also top on the wish list.

4. Home office — As technology continues to make us more mobile, many buyers have more options than ever to work from home. Having a dedicated space is important because it will help keep them focused and concentrated on work while they are at home.

Most agents will point out that a room could be used as an office or other flex living space, especially if it is currently used or staged as a bedroom.

5. Main-floor master suite — This is a must-feature for empty-nesters and certain other buyers, and appears to be getting more popular in general due to the increase in our aging population.

6. Outdoor living spaces — A Comfortable outdoor space with a dedicated area for sitting, with outdoor furniture that feels like indoor furniture, continues to top must-have lists.

7. First-floor laundry — Getting the laundry room out of the basement and onto the main level has become the standard.

8. Smart home technologies — Many of today’s home buyers are very “tech-savvy,” especially millennial home buyers.  Home technologies can help increase the “WOW” factor of a home.

Some of the most popular home technology features that today’s home buyers are looking for include:

• Programmable thermostats, such as a Nest, which can be controlled via a smartphone, tablet, or other mobile device
• Whole home speaker systems, such as Sonos
• Keyless locks that can be accessed via Bluetooth
• Timed irrigation systems

9. Smart storage and dedicated pantry — Dedicated pantry rooms and areas that are specifically designed for storage are becoming more and more appealing to buyers.
 
10 - Finished basements — Many buyers are looking for a finished basement to use as an entertaining space for a large-screen TV or billiards, or even a wet bar.

Other notables
Some other notable features that home buyers consider very important when buying a home include central air conditioning, recessed lighting, hardwood flooring, energy efficiency, and the potential to turn a profit should they decide to sell their home in the near future.

Today’s buyers are looking for a little luxury and features and treatments that are the highest quality their price range will permit.

Exploring Amortization Extension Options on Your Mortgage

Recent inflation numbers indicate that inflation is slowing, and many economists are saying that the most recent drop in the inflation rate will give the Bank of Canada the slack that it needs to hit a pause on any rate hikes for the time being. While this is a positive sign, it does not necessarily translate to relief in the cost of living. Many people are still seeking solutions to mitigate the effects of sky-high grocery prices and other goods on their finances. This month, we are focusing on one strategy that could prove to be the difference maker in providing the financial breathing room you need – mortgage amortization extensions.

To start, let us clarify what an amortization period is. It represents the duration it takes to fully pay off your mortgage through regular payments. An amortization extension, on the other hand, refers to any period beyond your initially qualified amortization.

Which lenders and banks offer amortization extensions?
Prime lenders, who are federally regulated, typically do not offer amortization extensions beyond 30 years. However, if your current mortgage has a shorter amortization period (i.e.: 20 years), you can extend it when refinancing with them. Alternative mortgage lenders, often referred to as "non-bank" lenders, may offer extensions of 35 to 40 years, provided you have at least a 20% down payment or more than 20% equity built up.

 

Who can extend their mortgage and why?
First-time home buyers are typically limited to a maximum amortization period of 25 to 30 years. Most put less than 20% down needing default mortgage insurance that restricts amortization to a maximum of 25 years. However, if they have 20% or more to put down, they can extend the amortization beyond 25 years.

In contrast, renewers may have the option to extend their amortization at the time of renewal. For example, they can go from 20 years back to 25 years or from 25 years back to 30 years to lower their monthly payments. Keep in mind that these options vary based on individual situations.

It is important to understand that extending your mortgage amortization outside of renewal would require refinancing, which may incur penalties and necessitate requalification at current rates. Nevertheless, refinancing can be a viable solution in certain circumstances. To explore your options fully, I recommend discussing your specific needs with me.

 

For example...
Imagine a young couple bought their first home 5 years ago with a $750,000 mortgage at 3.5% interest. They initially chose a 25-year amortization, making a monthly payment of $3,745. Now, at renewal, their balance is $635,000 with rates at 5.39%. They're considering extending their amortization to keep their monthly payment the same. Let's compare the numbers:

 

Amortization	Monthly Payment	Impact on Monthly Budget
20 yrs	$4,409	-$664
25 yrs	$3,926	-$181
30 yrs	$3,622	+$123
35 yrs	$3,419	+$326
40 yrs	$3,278	+$467

The rates shown are for illustration purposes only and subprime lenders' rates over 30 years amortization may differ.
 

Extending your mortgage amortization can be an effective financial strategy, but as with any important financial decision, it is essential to weigh the risks and benefits carefully. If you have any questions or would like to explore your options further, please reach out to me.