December 2013 - Sales Strong

MEDIA RELEASE

December sales strong

(January 7, 2014 – Hamilton, Ontario)  The REALTORS^® Association of Hamilton-Burlington (RAHB) reported 743 property sales were processed through the RAHB Multiple Listing Service^® (MLS^®) system in December.  This represents a 21.6 per cent increase in sales over December of last year.

There were 659 properties listed in December, a decrease of nine per cent over the same month last year.  End-of-month listing inventory was 11.4 per cent lower than last year at the same time.

The average sale price of $369,212 was 7.1 per cent higher than last December.

 

 “New listings were lower than last year,” said RAHB CEO Ross Godsoe. “and were also significantly lower than the 10-year average for the month of December.  Conversely, sales for the month were not only higher than last year, but were also higher than the 10-year average.  It’s no surprise that our end of month inventory of listings is down double digits from last year at this time.” 

Seasonally adjusted* sales of residential properties were 11 per cent higher than the same month last year, with the average sale price up 9.5 per cent for the month.  Seasonally adjusted numbers of new listings were 8.9 per cent lower than the same month last year.

Seasonally adjusted data for residential properties for the month of December, 2013:

Seasonally Adjusted                                                Percentage change compared to

Residential Only            Dec/13            Nov/13          Oct/13           Sep/13          Aug/13          Dec/12

New Listings	1356	-14.4%	-15.3%	-18.6%	-18.7%	-8.9%
Sales	1151	-4.6%	-0.1%	-6.7%	-2.5%	11.0%
Average Sale Price	$394,875	5.0%	1.1%	0.2%	2.9%	9.6%

Actual overall residential sales were 20.5 per cent higher than the previous year at the same time.  Residential freehold sales were 16.5 per cent higher than last year and the condominium market saw an increase of 37.7 per cent in sales.  The average price of freehold properties showed an increase of 11.3 per cent over the same month last year; the average sale price in the condominium market increased 11.4 per cent when compared to the same period last year.

The average sale price is based on the total dollar volume of all properties sold.  Average sale price information can be useful in establishing long term trends, but should not be used as an indicator that specific properties have increased or decreased in value.

The average days on market decreased from 55 to 52 days in the freehold market and from 52 to 47 days in the condominium market.

“The real estate market in the Hamilton, Burlington and outlying areas continues to be a strong, stable market,” added Godsoe. “Residential sales are about seven per cent above the 10-year average for the month of November.”

The numbers for the month of December, 2013 compared to December, 2012:

All Property Types                                                                      2012                             2013             % Change                    

Listings	659	600	-9.0%
Sales	611	743	21.6%
Average Sale Price	$344,819	$369,212	7.1%
End of Month Listing Inventory	3030	2684	-11.4%

Residential Only

Listings	568	530	-6.7%
Sales	572	689	20.5%
Median Sale Price	$287,250	$312,999	9.0%
Average Sale Price	$335,533	$371,037	10.6%
Average Days on Market	55	51
End of Month Listing Inventory	2378	2053	-13.7%

Freehold Only

Listings	460	434	-5.7%
Sales	466	543	16.5%
Median Sale Price	$307,250	$335,000	9.0%
Average Sale Price	$351,607	$391,463	11.3%
Average Days on Market	55	52
End of Month Listing Inventory	2003	1705	-14.9%

Condominium Only

Listings	108	96	-11.1%
Sales	106	146	37.7%
Median Sale Price	$245,000	$264,500	8.0%
Average Sale Price	$264,870	$295,070	11.4%
Average Days on Market	52	47
End of Month Listing Inventory	375	348	-7.2%

Commercial Only

Listings	91	70	-23.1%
Sales	39	54	38.5%

Every community in RAHB’s market area has its own localized residential market.  Please refer to the accompanying chart for residential market activity in select areas in RAHB’s jurisdiction.

*Seasonal adjustment removes normal seasonal variations, enabling analysis of monthly changes and fundamental trends in the data. 

Established in 1921, the REALTORS® Association of Hamilton-Burlington (RAHB) represents more than 2,600 real estate brokers and sales representatives from Hamilton, Burlington and outlying areas. Members of the association may use the REALTOR^® trademark, which identifies them as real estate professionals who subscribe to a strict code of ethics. The association operates the local Multiple Listing Service^® (MLS^®) and provides ongoing professional education courses for its members. In addition, RAHB is an active participant in the Home Ownership Affordability Partnership (HOAP) and holds an annual auction in support of local charities. Advertisements of local MLS® property listings and information about the services provided by a REALTOR® can be found at www.REALTOR.ca.  More information about RAHB is available at www.rahb.ca.                                         

-30-

For further information, contact:

Ross Godsoe                                    Valerie Webster

CEO, RAHB                                     Communications Coordinator

Ph: 905.529.8101                              Ph: 905.529.8101 Ext. 294

E: info@rahb.ca                                 E:  valeriew@rahb.ca

Jamie Berube

Sales Representative

(905) 741-9104

RE/MAX Escarpment Realty Inc.

jamieberube@remaxescarpment.com

www.JamieBerube.com

The Hidden Trap Of Mortgage Penalties At The Big Banks

December 6, 2013 @ 11:13 AM

Posted by: RE/MAX Escarpment Realty Inc.

ROB CARRICK

The Globe and Mail

Published Wednesday, Dec. 04 2013, 7:52 PM EST

Last updated Thursday, Dec. 05 2013, 10:47 AM EST

It’s easy to get caught in the posted mortgage rate trap at the big banks.

No, you won’t have to pay the posted rate on your next mortgage. Pretty much nobody does that any more, according to mortgage broker Robert McLister. The real danger is that posted rates will be used to calculate the penalty if you ever have to break your mortgage, probably costing you thousands of extra dollars.

A mortgage penalty compensates a lender for the interest payments it loses out on when you break a mortgage contract. “That’s the intention,” said Mr. McLister, who is also editor of CanadianMortgageTrends.com. “But in many cases, it overcompensates. It’s punitive in many cases.”

As we head into another round of quarterly bank earnings reports, it’s worth thinking for a moment about how those wonderful profits and dividends for investors are generated. One way is by using posted instead of lower discounted rates when calculating how much to penalize a client breaking a mortgage.

With houses as expensive as they are today, it’s crucial to get the lowest mortgage rate you can. Keep the same level of focus when inquiring about mortgage penalties. Although it’s hard to imagine the need to break a mortgage on a house you’re just buying or living in happily, it can happen. Mr. McLister said roughly 70 per cent of people adjust their five-year fixed rate mortgage before maturity, although many do it to refinance or move to a bigger house rather than to break the mortgage outright.

Mortgage penalties are straightforward if you have a variable-rate mortgage – expect to pay the equivalent of three months’ interest in most cases. With a fixed-rate mortgage, the penalty is set at the higher of three months’ interest or a calculation called the interest rate differential, or IRD. The must-ask question when negotiating a fixed-rate mortgage: Do you use discounted or posted rates to calculate these penalties?

This is important because using posted rates can result in a much higher penalty. For some real world numbers, let’s use the mortgage prepayment calculators all lenders now provide on their websites. They show penalties for paying all or a portion of your remaining mortgage balance (to find them, Google your lender’s name and “mortgage prepayment calculator”).

Let’s use an example of someone who, three years ago, set up a $250,000 five-year mortgage and has a balance owning of $200,000. Assuming an original mortgage rate of 3.64 per cent with a discount of 1.5 percentage points, the mortgage prepayment calculators at several big banks showed penalties ranging from $5,000 to $7,600 or so.

A check with some alternative lenders found penalties ranging from $1,800 to $2,800. These are very rough comparisons because lenders differ a fair bit in what information they ask you to supply. But you get the picture – the big banks apply penalties with a sledgehammer.

As well as producing revenue for lenders, inflated mortgage penalties also help trap clients who might otherwise move their business to another lender. Imagine you want to refinance your mortgage or buy a bigger home and your bank won’t come across with a competitive rate. You say you’ll change banks, only to find out how prohibitively expensive it is to break your mortgage.

Mr. McLister said some banks have a stated policy of offering clients only a small discount off the posted rate if they want to add on to their mortgage to buy a more expensive house. You may be able to negotiate something better than a trivial discount, but your bank knows your leverage is limited because of the penalty you face if you go.

Alternative lenders often have better rates than the big banks, and they typically have cheaper penalty fees. Why do so many people use their banks for mortgages, then?

Mr. McLister speculated that some borrowers like the convenience of having their mortgage where they bank, and of being able to go into a branch to talk about their mortgage. If you prefer transacting online, some alternative lenders don’t have great websites.

One thing you do not need to worry about if you borrow from an alternative financial institution is that your lender will go bankrupt. “It’s funny that people look at mortgages and think, I need a safe lender.” Mr. McLister said. “If a lender goes out of business, pretty much nothing is going to change except for the name of your new lender.”

For more personal finance coverage, follow Rob Carrick on Twitter (@rcarrick) and Facebook (robcarrickfinance).

Jamie Berube

Sales Representative

(905) 741-9104

RE/MAX Escarpment Realty Inc.

jamieberube@remaxescarpment.com

www.JamieBerube.com