It’s Condolicious … !

Riverdale Lofts … oh I mean Leslieville Lofts project has been scrapped. Apparently, the city and neighbourhood opposed the idea and another development (possibly in the form of stacked townhomes) will take its place. It’s really unfortunate as 50% of the building was sold and now those consumers will have to look elsewhere.  An application to rezone the area was rejected once before, late last year.  So hopefully, the buyers of this building were aware of this and were informed of the possible outcomes.

Leslieville Lofts at Broadview and Queen St. E.

It’s a nice neighbourhood. I use to live a few blocks east of there and attended school at Queen Alexandra (Broadview & Dundas). The building looked promising – very sleek and modern. But honestly it didn’t seem to fit in well with the surrounding buildings and homes.

Is this a foreshadowing of things to come?

A major Toronto developer says his condo projects are on track despite the global credit crunch and real estate downturn, but one east end loft has been scrapped after losing a zoning battle.

The sign has come down for Lamb Development Corp and Hyde Park Homes’ Leslieville Lofts, located off Queen Street East, after the Ontario Municipal Board ruled against the nine-storey proposal.

The city had opposed the project, Brad J. Lamb (pictured above) said in an interview today. Mr. Lamb says he still intends to build at 134-162 Broadview Avenue, but it will be in the form of a stacked townhouse, and the project won’t bear the name “Leslieville,” since the address is actually in neighbouring Riverside.

“If we had won, we would be going for financing now, and there’s no doubt it’s a more challenging environment. Any development in the city that has achieved 70% of their pre-sales, and the budget makes sense — in other words, they sold them at a high enough price that protects the bank — banks are lending developers money,” said Mr. Lamb. “All our projects that we’ve been involved with have got financing.”

On Friday, city budget chief Shelley Carroll revealed that a “handful” of Toronto developers were placed in tricky positions when the investment bank Lehman Brothers collapsed and cast doubt on their financing. “They’re domesticating now, and so the projects will go ahead,” Ms. Carroll said. Still, the city moved last week to freeze development charges in the midst of the credit crisis.

Toronto Building, the city office that issues development permits, said it has not seen the number of building applicants drop. Ann Borooah, chief building official, said the office is not usually appraised of projects that went sour. “They would take more time to proceed to the next stage of approval, or more time to proceed to construction. It would be some time before it’s confirmed that a project was in trouble,” she said.

In the case of the Leslieville Lofts, it was the city and the neighbourhood that came out against the development, said local councillor Paula Fletcher.

“Not only did people not like the height, they were very annoyed that they were trying to market Leslieville into the Riverside district,” said Ms. Fletcher (Toronto-Danforth).

She said other projects have respected the four-storey limit on Broadview, north of Queen Street, which is zoned as “neighbourhood.”

Mr. Lamb said his team believed the city had erred in its zoning, and that it in fact made sense to be able to “frame” the intersection with buildings of similar height on both the north and south side. Another Lamb project, called The Ninety, is nine storeys high and set to be located south of Queen.

“It’s actually quite typical for a project to be approved at twice or many times three or four times higher than the current zoning,” he said. “What’s strange is this very sacrosanct zoning in the city that’s called neighbourhood, and they fight very hard when you try to change a neighbourhood zoning,” he said.

He said most of King Street West has a zoning of 18 metres, “but they easily allow 30 metres.”
Anyone who had purchased a Leslieville Loft can get a refund, can buy at another Lamb development or sign up for the Leslieville reincarnation, said Mr. Lamb. About 50% of the units had been sold since it went on the market nine months ago.

Source: http://network.nationalpost.com/np/blogs/toronto/archive/2008/10/20/leslieville-lofts-dead-brad-lamb-goes-to-plan-b.aspx

Last week, Merrill Lynch issued a report, “The tipping point?”, suggesting that Canadians are financially overextending itself to figures higher than in UK and not far from the US peak in 2005.  Basically, it’s only a matter of time until the Canadian housing sector suffers a meltdown.

You can read the complete report by David Wolf and Carolyn Kwan here.

I don’t deny that we’re in a period of a softening market, but to claim that we will face a similar fate as in the US does “seem like a stretch”.  Certainly it’s possible if all the planets align – higher interest rates, higher unemployment rates, crumbling consumer confidence, etc. – but it’s extremely unlikely.  Also remember that real estate is local.  So if this report has any substance, it’s more to do with Western Canada which has experienced unsustainable growth e.g. Saskatchewan doubling over the last two years.

So how many of you are there are waiting for a correction?  What’s your take on this?

My concern is for those who purchased and are purchasing pre-construction at seemingly outrageous prices.  How many can afford $600 psf with deteriorating stock portfolios and shrinking bonuses?  I’m not trying to add to the pessimism, I’m trying to be more realistic about these lofty valuations.  People will get burned.  I tell them this but they are confident and continue to make the purchase.  I respect that.  But, as Kevin O’Leary put it hilariously to an inventor in Dragon’s Den: “You’ll never make money.  Then you’ll go into the forest, slit your wrists, story over”.

Eric Shackleton
THE CANADIAN PRESS

Merrill Lynch is challenging the prevailing view that Canada’s housing and mortgage markets are more stable than their U.S. counterparts, warning that households in this country are so indebted that it’s only a matter of time before we see a major downturn here as well.

In a report issued Wednesday, Merrill Lynch Canada economists said many Canadian households are more financially overextended than their counterparts in the United States or Britain.

They said it’s only a matter of time before the “tipping point” is reached and the housing and credit markets crack in Canada.

The Merrill Lynch Canada report by economists David Wolf and Carolyn Kwan acknowledges that the analysis is more pessimistic than the prevailing view.

Prime Minister Stephen Harper, in British Columbia for the federal election, responded to the investment firm’s warnings by repeating his assurances that Canada’s economy is in good shape.

“I think our housing market is in strong position (and) consumer markets, as well, are stronger in Canada than the U.S. and the position taken by our financial institutions.”

“Of course, we have seen that this market has somewhat weakened in the last 12 months but we will not see such a situation here as in the U.S.”

An expanding financial crisis that has been heating up in the United States for more than a year, came to a full boil last week with the near-collapse of several major American investment banks, including Merrill Lynch, and insurance giant AIG.

U.S. Treasury Secretary Henry Paulson, himself a former senior Wall Street investment banker, has been feverishly pushing the White House and Congress to accept a US$700-billion taxpayer-funded rescue plan.

Meanwhile, the National Association of Realtors reported Wednesday that the U.S. median sales price in August fell 9.5 per cent to US$203,100, the largest decline on records dating to 1999.

Many economists have said repeatedly that Canada’s housing and banking sectors are much more stable than their American counterparts and is unlikely to crash – since it didn’t spike in recent years because of many differences between the two countries..

Benjamin Tal, an economist with CIBC who has been following closely the ups and downs of the housing industry, said Wednesday he sees no “trigger” threatening Canada’s housing and mortgage market.

“To see a crash in the housing market you need a trigger,” Tal said.

“The trigger in 1989-1990 was extremely high interest rates. The trigger in the U.S. was subprime mortgages. We’re still missing the trigger for Canada.”

However, Merrill Lynch – whose U.S. parent is one of the biggest victims of a crisis in financial markets that is rooted in the American housing and mortgage meltdown – said Canadians should be wary.

Household net borrowing in Canada amounted to 6.3 per cent of disposable income in 2007 – meaning they’re carrying more debt than households in the United Kingdom and not far off the peak U.S. shortfall in 2005 – just before the subprime mortgage crisis erupted.

“These data imply that the Canadian household sector is now overextending itself as much as the U.S. or U.K. ever did, challenging the consensus view that Canadian lenders and borrowers have been far more conservative through the cycle,” the Merrill report says.

It also says housing prices are now falling and inventories of unsold homes are rising sharply in Canada suggesting that this market turnaround will not be a transitory phenomenon.

The prevailing view, however, is that Canada’s lenders have issued few of the type of subprime mortgages that sparked the U.S. crisis, which is continuing to ripple through the financial system.

In addition, many observers argue that Canadian residential properties are, by and large, not overvalued – considering the strength of regional economies in resource-rich provinces.

Tal agreed there’s a high level of debt in Canada but added “the distribution of debt in Canada is much better than in the U.S.”

“There was really a lot of high-risk debt in the U.S. You don’t see this in Canada,” Tal said.

Gregory Klump, chief economist with the Canadian Mortgage and Housing Corp., said there would need to be a spike in interest rates or massive layoffs before the housing market would take a tumble

Right now, Klump said, “we have a stable labour market” and interest rates are low.

“There’s no distress sales in Canada, not like in the States.”

In Calgary and Edmonton, where house prices have been falling recently after reaching astronomical heights, he said, “the market is beginning to stabilize.”

Klump said Merrill’s warning on Wednesday “is consistent with the viewpoint they’ve had for the last year, but it hasn’t happened.”

James Marple, an economist at TD Bank, said housing affordability – which reflects not only the purchase price but cost of ownership, including debt payments – has not declined in this country like it has in the United States.

As well, Canada has not had the “kind of glut of housing supply across the country” that would lead to the massive correction experienced in the U.S., Marple said.

BMO economist Douglas Porter said “it’s quite a stretch” for Merrill Lynch to say that the Canadian market is going to face the same kind of deep downturn as the U.S.

However, Porter said, there are legitimate reasons “to be cautious on the housing market outlook” in this country.

“I don’t think it’s going too far out on a limb to say that prices could recede a bit in many cities” but nothing like in the United States.

Beijing Olympics – what a fantastic and monumental event it was.  I haven’t been so glued to the Olympics since The 1996 Altanta Olympics while witnessing Donovan Bailey and Michael Johnson breaking world records and Kerri Strug’s heroic vault moment.  It almost feels awkward these days not being able to turn on CBC, NBC or watching the CBC live stream to watch the Olympics.  Guess I’ll have to wait another 4 years … oh well too bad. 

I’m not sure if you feel the same way but aren’t you curious to try out some of the sports you rarely have the opportunity to?   I’ll skip weightlifting (Video clip - *graphic* ouch! Hope he’s doing alright!), fencing and equestrian, but how about water polo, handball and pole vault?  Of course, accidents can happen in these sports as well (example) but for the most part it seems worth a try or two.  Well enough of the Olympics for now until 2010 and back to working hard and growing the business!

Beijing Olympics 2008

Recently, I just listed a home for sale in Scarborough.  Although the majority of my time is spent on condominiums in the city’s downtown core, I love listing homes as it’s like getting … some fresh air.  You work with different demographics, it can be more challenging to sell and you get to advertise yourself on the lawn – great stuff! 

Anyway, long story short … my company provides their sales agents with free for sale signs for the duration of the listing and all we need to do is attach our rider.  A sign rider is a board printed with your contact information that you attach to the top or bottom of the for sale sign.  I need to order a few riders so I enter a real estate signs store.  A gentleman serves me, answers all my questions and then takes my order.  Absolutely a pleasure to speak with.  I provide the information that I want to appear on the rider and he tells me a proof will be emailed to me for approval before it heads to the printer.  It’s standard procedure.  Excellent.  A few days later I receive the proof in my inbox.  When I opened the attachment I was in disbelief.  Nope it wasn’t a virus, but a horrendous looking thing!  Here it is …

Their Rider

Honestly, who in their right mind will attach this to their for sale sign?  Have clients approved of this design/template before?  It’s clearly looks unprofessional and needs a major makeover.  I understand I’m not paying a lot of money for the sign riders but I’ve seen this shop do some fancy things for other real estate agents so I’m expecting at least a half-decent job that 10 minutes can produce (more on this below).  I’m just very shocked they sent this to me.  Actually it’s more like I’m shocked with laughter.  I’m guessing their main designer was already on vacation.  No hard feelings though.

So it was time to take matters into my own hands!  I put on my superhero cape and stretched my fingers.

10 minutes later on Photoshop … ta da …

My Rider

It’s not the most fantastic piece of work, but I’m sending this off to the printers!  Not bad right?

I had also asked for another sign rider to be done.  The rider is to display the website address for the property a.k.a. single property websites.  Here’s the sign:

Single Property Website Rider

I was fine with the white print on the bright red substrate but I dispise the font and the spacing.  Seriously, am I just too nitpicky?   It seems that I can’t work with any templates offered by companies.  From postcards, websites and now sign riders, I recreate the wheel for everything!  Bad business decision or good business decision?

Anyway I’m off to giving a makeover for this single property website rider!

Have a safe and fantastic long weekend!

I walked into a downtown condo unit for a showing recently and instantly it gave off a familiar odor.  It wasn’t BO or the scent of smoke, but turtles.  I had a pet turtle name ”Id” (last part of my name … very unimaginative I know ) once and if you’ve ever had turtles as pets you probably know the smell I’m describing.  It’s the smell they give off when you don’t change their water after a while.  The unit has never been lived in; it was brand spanking new.  I doubt a turtle somehow crawled into the unit and died, but I supposed it was the lake.  At first it struck me as odd.  Once in a while, the lake would give off a fish stench but never one of turtles.

So after a long day of showings, as you’ve probably experience before, the buyer asks to use the bathroom.  “Sure go on ahead,” I say “but first check to see if it flushes.”  After a while, she comes out looking a lot better and mentions “it doesn’t flush.”  Great, I see where the turtle smell is coming from now … the fluids of prospective buyers who couldn’t hold it any longer … and now she’s added hers!

Please, if you’re going to turn off the main water valve, tape a sign on the seat stating in bold “please do not use the toilet!“  No way should a buyer ever have to leave your property remembering only the foul smell it gave off.  It will obviously improve your chances of selling the property, but honestly what listing agent expects the toilet to be the most popular feature of an empty home.

Oh no … oh yes!  Doesn’t it sound like the most absurd thing?  Multiple offers on leases don’t happen very often throughout the year but I suppose September is a special month and the 1st is a special day.  Usually, it only takes one offer to seal the deal, but when properties are getting 2-5 offers (for a lease!) it’s pushing my average to three offers. 

It’s interesting to see the difference between, let’s say, leasing for April and leasing for September.  In April, tenants are casually looking at units and “ok this one”.  We wait a while and they get the place.  Simple.  For September, it’s like “Holy crap, I just lost out on property A, property B just got leased before I had the chance to see it and property C the landlord has decided to rent it to their dog! Forget it, throw my preferences away.  Give me what you can, I don’t have much time.  I don’t care if it’s a tad rundown, has no balcony or faces east.  Send the listing to me and let’s sign asap!”  Ok perhaps the difference is not that drastic but I think you get the picture.  It’s very frustrating – not just for me but especially for my clients.  As their agent, you want to give them the best, not leftovers.

In this sitution it’s tough, but here’s some advice:

• Ask yourself whether it is worth negotiating down the price by $25-50.  If the unit is reasonably priced and you try to reduce the price, you run the risk that the landlord simply brushes your offer aside as others may be lining up to give the landlord what s/he wants.  $300-600 a year may seem like a lot, but trust me when your offer doesn’t get accepted 2-3 times you’ll likely regret not coughing it up.
• Agree to a longer term e.g. 18-24 months.  You’ll have a good chance at reducing the price and securing the lease.  None of the “Let’s keep it at one year, I’ll move in and if I like it I’ll extend the term” talk.  Landlords treat it as BS.  Needs to be in writing.
• If you are an existing tenant and your landlord hasn’t found a new tenant yet, ask to stay for an additional month.  In October, you’ll find the units coming to you and not vice-versa.
• Offer an earlier closing date e.g. 2 weeks.  On a $2000 lease, it’s approximately $1000 that you’re “offering” the landlord.  Most tenants think this way.  I’m not saying it’s wrong to think this way.  It could hurt the wallet especially when no one will be moving in within those weeks.  But be aware that this is usually more attractive than an increase in price.  Over the long-run it could be beneficial as well.  Let’s say in 2009 you’re in the market for another unit, you’ll be looking for a lease for August 15 instead of the dreaded September 1st.  You’ll be in a much better position to get what you want without paying a higher price.
• Oh yeah … don’t forget to have your paperwork prepared and be ready to act … be decisive!

I’m sure once I’ve secured places for all my tenants and look back at the struggles, it will feel like enormous accomplishment!  I don’t know why, but I know it will.