Sales Down, Prices Up, Market Steady

Members of the Ottawa Real Estate Board (OREB) sold 1187 residential units in August through the Board's MLS® system compared with 1307 sales in August 2007, a decrease of 9.2 percent. There were 1481 sales in July 2008.

"Making comparisons with 2007 is always difficult, because it remains the best year on record by such a significant margin. When you compare this year's sales numbers to 2006, which still stands as the second-best year on record for sales, it becomes much more apparent that Ottawa's resale housing market is very steady. In fact, year-to-year sales are up over the same time period in 2006," said OREB's president. "Homes are also selling more quickly this year than they have in the past two years, by a significant margin – as of the end of August 2008, homes spent an average of just 33 days on the market, compared with 42 days in 2006 and 37 days in 2007."

The average price of residential properties, including condominiums, sold on MLS® in August 2008 in the Ottawa area was $280,806, an increase of 5.1 percent over August 2007.

Source: OREB

High Water Bill?

I recently received an unusually high water bill from the City of Ottawa and telephoned to question the amount. The staff member provided some very useful tips, which I would like to share...

• Before going to bed, check your water meter and record the six digit readout. Don’t use the plumbing at night and recheck the numbers the next morning. If they have changed, you have a plumbing leak.
• The most common source of interior plumbing leaks is the toilet. Take some food dye or strong coffee and pour it into the toilet tank and come back in an hour. Now check the toilet bowl. If the dye or coffee is inside the bowl, you have a plumbing leak.
• If you are unable to resolve the leak, call a plumber.

Energy Saving Laundry Tips

• Hang your laundry outside in the fall, spring and the summertime.
• Choose the right water level for the size of load and if possible, wash full loads only.
• Trade in your old washer and dryer for new energy efficient models.
• Dry lighter items separately from heavier items like towels, as they typically need less time to dry.
• Optimize the air circulation in your dryer by cleaning out the lint trap after every load and keeping it clear.
• Did you know? 90% of the energy we use when doing laundry comes from heating the water? The switch from hot to warm water washing can reduce energy use by 50%.

Source: Pillar to Post

Federal Government Tightens Mortgage Regulations

On July 9, the federal government announced changes to the rules for government-guaranteed mortgages that will limit amortization periods to 35 years and require a minimum 5 per cent down payment by the purchaser. The revised regulations will also establish a minimum credit score for persons applying for government-insured loans, and will introduce new loan documentation standards.

The changes become effective October 15, 2008, a date that allows for existing pre-approvals up to 90 days to either be used by consumers or expire. Exceptions will be allowed after October 15 where they are needed to satisfy a binding purchase and sale, financing, or refinancing agreement entered into before October 15, 2008.

All of these changes apply only to new mortgages that have a high loan-to-value ratio and are thus required under the National Housing Act to carry mortgage loan insurance. Existing mortgages will be unaffected by these changes, as will mortgages where the purchaser is able to provide 20 per cent or more of the home's value as a down payment (known as conventional mortgages).

Details of the four major changes are as follows:

Loan-to-Value Ratio: Government-backed insurance is currently available on mortgages where the loan-to-value ratio is up to 100 per cent (i.e. no down payment mortgages). This limit will be reduced to 95 per cent. Borrowers may borrow the 5 per cent down payment, but it will not be insured under the new guarantee framework.

Amortization Period: The maximum amortization period for mortgages insured with government backing will be reduced from 40 years to 35 years.

Credit Score: The new rules will establish a credit score floor of 620. There will be limited exceptions to this rule, as the government "recognizes that there are some borrowers with credit scores below 620 that otherwise represent low credit risks".

Loan Documentation: The changes also include new minimum loan documentation standards to ensure that there is evidence of reasonableness of property value and of the borrower's sources and level of income.

In addition to the above changes, the new mortgage rules will exclude high-ratio mortgages where no amortization is required in the first few years (interest-only mortgages) from the government guarantee, and will set a maximum of 45 per cent on borrowers' total debt service ratio.

These changes are intended to "protect and strengthen the Canadian housing market" and to "reduce the risk of a U.S.-style housing bubble developing in Canada," according to the federal government's own news release.

How to Sell Spot and Kitty’s House

Most pet owners love and indulge their pets. Some take them to doggie masseuses, spend hundreds of dollars on cat castles, and let them have the run of the house. Because pet owners love their critters so much, they don’t grasp how animals affect a home’s salability.

Odours are a problem with pets. In most cases, pet owners don’t realize that their house has pet smells. They breathe the air daily and are accustomed to it.

Pet paraphernalia also turns off home buyers. Not only do dog beds and food bowls usually smell, but having pet reminders around can irritate buyers.

Pets can damage a home. Doors may be wrecked, baseboards scratched, and carpets shredded. Pet urine – cat urine in particular – can ruin carpeting, underpads, moulding, and everything underneath.

Many buyers have a distaste for animals, dislike pet hair, and have allergies to pet dander or litter box dust. When deciding between two similar houses, a buyer may well opt to choose a petless one.

Suggestions for pet owners:

• Eliminate pet odours before listing your home. Lighting candles and boiling potpourri may help but might also serve as a red flag to people who wonder what the seller is trying to cover up.
• Cover up pet doors, hide pet toys, beds, leashes ... even pet photos.
• Clean the carpets and upholstery, and completely rid the house and backyard of droppings.
• Even the friendliest animals can get annoyed with strangers roaming the house. Remove pets before showings and open houses.
• Consider sending your pet on a vacation while your home is for sale.

On the positive side, there are many pet lovers looking for a pet-friendly home. A fenced-in yard, a side entrance or mud room, a large laundry tub for clean up – all of these factors can entice pet owners.

Excerpted from an article by Toby Welch