Real Estate in the Kawarthas / Home Inspections

TODAYS REAL ESTATE

IN A NUTSHELL

Contributed by: Jay Lough Hayes, Sales Representative

Re/Max Rouge River Realty Ltd. 705-772-1025

“Average home price in Peterborough soars 32.5% in a year to $398,734.” (March 2017) “Average home price in Peterborough is $433,902.” (February 2019) (Peterborough Examiner)

This had to stop. Prices were running ramped with a dozen multiple offers on just about every property listed. Even though prices have slowed, the multiple offers have not. Peterborough, unlike most of Canada, realizes a property listed is a property SOLD. Real estate agents have realized a clean, staged and well presented home isn’t enough. Pricing a property below what the home should sell for is now normal. This low price, accompanied by location and staging, nets an over asking sale, selling for around what the house should have been priced at to start. We are seeing fewer listings asking good, qualified buyers to wait a week to submit offers. Many buyers simply won’t wait, they are tired of playing that game. Buyers will pay top dollar since there is such a shortage of new inventory.

Peterborough has a unique problem with very little new home builds coming to market. The buyers who want the new home either go out of the market or buy a resale. This incline, which happens when someone buys a new home leaving behind their resale to be purchased, just isn’t happening here. The reasons are varied, with a large pile of dirt left waiting on Lily Lake Rd slated for nearly 3,000 new homes.

With the 407 nearing completion, and the influx of new immigrants needing homes, Peterborough remains the fastest growing community in Canada. People older than 65 make up 22.2% of Peterborough population.

Peterborough’s current housing vacancy rate is just 0.4%, while the cost of real estate continues to climb. No new highrise apartment buildings are

on the books to be built, and if any, developers are building and then converting to condos. As the city realized the affordable housing shortage, plans and bylaws came in to allow basement apartments. Toronto buyers swooped in with money to spend and purchased bungalows, usually the easiest to convert into two homes. All is well, except to cover all the costs of mortgage for a property they may have overpaid for, the cost to rent one a renovated apartment remains out of reach for many tenants. We see these tenants either move to a nearby, more affordable towns, or stay and struggle to pay their rent. On a brighter note, our jobless rate fell to 4.9% in December.

As real estate agents, we too often hear from the Peterborough seller, “We’ll just wait for a Toronto buyer to give us our asking price or more”, leaving the local buyers just staying put. The Toronto buyer isn’t moving here, the local would-be buyer would have moved, offering a new listing to perhaps another local buyer.

In September, the average sale price of a house in the city and County of Peterborough soared to an all-time high of $448,993. In February, sales are up 5.1%, the average home price is $433,902 with 233 new residential listings. This is well below the long-term average of around 350 listings for the month.

But is home ownership attainable here? In the new federal budget, buyers will be able to tap up to $35,000 of their RRSP (up from $25,000) for a home purchase. But how does this apply to the Bank of Canada “Stress Test” created to slow

down our runaway real estate market? If the bank rate today is 3.75%, you must qualify at 2% higher (5.75%). Many borrowers find themselves unable to meet this demand, so they continue to rent. First-time buyers will be able to finance a portion of a purchase through a shared equity mortgage with Canada Mortgage and Housing Corporation (CMHC), helping to lower monthly mortgage payments. Not all the bugs are ironed out yet. You can find out more at www.globalnews.ca/ news/5075888/federal-budget-2019-cmhc-sharedequity-mortgage.

It certainly has been fun selling real estate over the past 34 years. Mortgage rates as high as 20% and home priced at an average low of

$65,000. Too many new forms to fill out and too many new rules. But every day presents a new challenge and isn’t that what living is all about?

Home Inspections

By Steve Irvine Home Sweet Home

Inspections

You bought a new home and it comes with a warranty. Congratulations! You did the Pre-Delivery Inspection (PDI). So why would you pay $400 to an Inspector? The PDI is performed by a builder representative and Terrion warranty is operated by the builders. But who represents YOU?

An independent third party Inspector is looking out for you. If the builder’s Inspector misses something and you don’t notice it until your warranty expires (one year for most things), nobody but YOU pays for the repair. That is, if you notice. If the independent Inspector misses issues or is wrong about things, they are legally liable. There is a financial incentive to be thorough. The PDI mostly finds cosmetic problems such as drywall dings & cracks, floor scratches, etc. They don’t look in the attic, test all the plumbing, look in the electrical panel or test every heat register for flow. The final grading on the exterior of the house is not done. Do you know proper building codes? Remember, the first word of building code is Minimum.

You have three times to report defects to Terrion. Those times are: The PDI, at one month and at one year. The best time for the inspection is at the ten month mark. One year warranty papers are filed at the eleven month mark. The house settles approximately 85% in the first year. You have lived in the house for all four seasons and have probably noticed things. The final grading is usually done, you have used the plumbing and the house is at least a little lived in. You are going to find more.

I have found way too many deficiencies on new homes to think they are all built properly. Poor attic framing, missing insulation, roof flashings installed wrong, plumbing problems, missing window wells, not using tempered glass where required, etc. If you don’t know what to look for and how to recognize it, do yourself a favour and hire someone who does.