In the 1940’s it was a regular sight to see grandma or grandpa living with the family; grandma would help cook and babysit or grandpa would do work around the house. More than half a century later, this type of household is on the rise once more. The multigenerational households of today look different though – it is not only grandma or grandpa moving in, but also adult children returning back home or never leaving in the first place.
Multigenerational households are on the rise for many reasons. For some it is out of necessity, maybe a family member is unable to afford living alone, or grandma/grandpa needs to move in for health reasons. For many, though, these types of households are less a necessity, and more a conscious choice:
A Few Statistics:
- The highest number of Canadian multigenerational households are in Ontario, this is due to a combination of economic realities including increased housing costs and cultural norms as well as different ethnocultural compositions.
- There are currently over 400,000 multigenerational households in Canada (those housing three or more generations), with about 50 per cent of them in Ontario.
- There has been a 37.5 per cent increase in these types of households since 2001.
- The boomerang effect (adult children returning home after living on their own), has increased dramatically. 34.7 per cent of young adults between the ages of 20 and 34 are living with at least one parent, this is up from 30.6 per cent in 2001. It was previously assumed that these young adults would move back out after landing on their feet, but the latest data shows that many continue to live with their parents even after forming unions or having children of their own.
- First and second–generation immigrants (compared to those whose parents were born in Canada) are more likely to live in multigenerational households.
The Pros and Cons of Multigenerational Households
- Pros – Saving money, sharing resources and household tasks, childcare and support.
- Saving money seems to be the biggest catalyst for family members moving in together. Sharing a space means that costs can be divided and significantly cut.
- Having a parent or relative at home means that you may have built-in childcare or help with other household tasks.
- Money is saved on groceries, bills and energy is saved when dividing household tasks.
- Living with family members can help to form strong family bonds, and being able to care for family members under one roof can be helpful.
- One study found that teens living with a single mother and at least one grandparent in the home performed better in school than a teen living with two parents and no grandparent. There is emotional support; an Oxford study found that teens with a high level of involvement with their grandparents had fewer emotional and behavioural problems.
- Cons – Sacrificing privacy, having to compromise on certain things, needing to consult others when making decisions.
- The more people living in your household – the more opinions, preferences, needs and desires need to be taken into consideration. Compromise is the name of the game.
- Without proper communication, living with others can cause a strain on relationships and possibly cause issues.
- Depending on the layout of the house, some degree of privacy will most likely be sacrificed.
New Developments have Multigenerational Households in Mind
Some American builders are creating homes with multigenerational families in mind. Large houses are being built with private apartments, separate entrances and separate garages. The unique thing that sets these homes apart from say, an income property, is that there is an interior door linking the two units together. The layout of these homes ensures privacy when it is needed, and a communal living space when it is wanted. These types of homes offer privacy and convenience. With multigenerational homes on the rise, it would not be surprising to find Canadian builders following suit.
Things to Consider when Planning for a Multigenerational Household
Whether it is due to necessity or convenience, making the change to a multigenerational household can have its challenges. The key is to have the conversation early and plan ahead instead of reacting to a time of crisis. Take the time to set boundaries, figure out budgets and have honest conversations about expectations. With proper planning and communication, it can be an amazing change that benefits everyone involved.
Location Helps Drive Up Price of Danforth Home
Special to The Globe and Mail
Published Thursday, Aug. 10, 2017
153 MILVERTON BLVD., TORONTO
ASKING PRICE: $788,000
SELLING PRICE: $840,000
PREVIOUS SELLING PRICES: $540,000 (2009); $367,000 (2006); $202,000 (1998)
TAXES: $3,206 (2016)
DAYS ON THE MARKET: Seven
LISTING AGENT: Elli Davis, Royal LePage Real Estate Services Ltd.
The Action: There were a number of listings available earlier this summer for homes around the Danforth, but few were in the price bracket of this semi-detached house. It received 20 requests for tours and an $840,000 offer.
“There was another one that was down the street that was a brand-new renovation, but it was priced quite a bit higher, so the price point of this was very attractive to a lot of first-time buyers,” agent Elli Davis says.
“Anything under $1-milion in a nice area in Toronto is certainly in demand, even now.”
What They Got: Few details reveal the age of this two-storey house built circa 1920 as it now bears open living and dining areas and a rear eat-in kitchen. The latter was updated about a decade ago with custom cabinetry, hardwood floors, exposed brick walls and a door to a south-facing deck and backyard.
The are three bedrooms on the second floor and a single bathroom. There’s another bathroom in the lower-level recreation room.
Parking is available on a mutual driveway on the 18-by-115-foot grounds.
The Agent’s Take: “It’s a good starter home,” Ms. Davis notes. “It showed very well and appealed to younger professionals who loved the Danforth Village area.”
Sometimes, we need to make large purchases. Whether it is a home renovation project or a new car, creating a smart savings plan is important. Follow these steps to ensure you will be financially ready for your next ‘big ticket’ item:
Decide How Much Money You Need To Save
Consider the cost of your purchase. Will you have to save for 100 per cent of it or do you already have money put aside that you can dip into? Will you be putting a certain amount on your credit card or using money from a loan? Decide on a dollar amount that you need (all things considered), and this will be your goal.
When Do You Want To Be Able To Purchase This Item?
Depending on what your ‘big ticket’ item is, you may already have a date in mind. Your purchase may be time-sensitive, like roof repairs or a summer vacation, or arbitrary, like an item you hope to afford in the near future. Whatever the purchase may be, having a timeline for saving is important. The best goals are ones that are actionable and time-sensitive; come up with an end-date (however arbitrary it may seem), and create daily, weekly and monthly goals working up to this time.
Start a Plan
Since you know how much you want to save, and when you want to save it by, it is time to come up with a plan to make it happen. First things first: do the math! How much do you need to save per week to arrive at your goal? For example, if you hope to save $7,500 in 3 months, assuming there are 13 weeks in these 3 months, you would need to put aside $576.92 per week. Now look at the numbers for your own goal – do you need to extend your end date to make it work? Perhaps you might be able to save quicker than you thought? Make sure you are comfortable with your numbers.
Now here comes the hard part, figuring out where this extra money will come from:
Look at Spending Habits – The Easiest Way to Save is to Reduce Unnecessary Costs
Use an app, or simply grab a pen to paper, and analyze your current weekly and monthly spending. Is there something you can do without, or cut back on?
Monthly Bills – Are there services you are paying for that you no longer use? Maybe you have two Netflix accounts in your household, or your phone plan is outdated and you are overpaying. Write down all your monthly expenses and see what you can cut down on. Call your phone and TV service providers and see if you are eligible for a better deal.
Food and Drink – Ah, one of our biggest expenses. If you are like most people, you find yourself grabbing a latte from a café daily or going out for lunch during your break. Look back at the past two weeks: how much did you spend on food and drink? The amount will probably surprise you! Cooking at home and bringing a coffee to-go is one of the easiest ways to save some extra cash. It may be a hard habit to break but every time you skip on the café, consider how much money you would have spent and put that amount into a savings box…then watch your savings grow!
Make Extra Money – Adding Lump Sums to Your Savings is the Easiest Way to Watch Your Funds Grow
There are many ways to make some extra cash. Whether it is putting in some overtime at work, taking on a side job or selling items online, any extra funds will bring you another step closer to making your goal a reality.
Take a Break From Other Savings Goals – Focus On What is Most Important to You Right Now
Are you currently saving money for reasons other than this goal? Consider taking a break from these contributions to have extra funds for your big purchase. Having multiple goals to save for can feel overwhelming; stick with one at a time.
Saving takes a lot of discipline, and it is not always fun to do, but we can feel good about making these choices knowing that the end result will be worth the small sacrifices and extra work.
If buying a home is on your list of ‘big ticket’ purchases and you are looking for some help, feel free to contact me at 416.921.1112 or send me an e-mail at firstname.lastname@example.org – I am always happy to help!
Toronto Real Estate Market Picks Up After Lull
The Globe and Mail spoke with several top GTA Realtors about the current market and I was happy to share my experience.
The Globe and Mail
Published Thursday, Aug. 03, 2017
Home buyers in Toronto and some of the surrounding areas appear to be testing their mettle again after spending a few weeks on the sidelines.
It’s too soon to tell if a flurry of sales signals a trend with staying power or if some buyers simply need to move on with their lives, but the action – especially at the high end – suggests some resilience in an uncertain real estate market.
Janet Lindsay, a real estate agent with Chestnut Park Real Estate Ltd., recently listed for sale 253 Russell Hill Rd., a six-bedroom house in the posh central enclave of South Hill. Within three days the first offer landed, Ms. Lindsay says. Two days after that, the second and prevailing offer arrived and the house sold for $100,000 above the asking price of $3.65-million.
“More appointments were being booked as we waited for the certified cheque,” Ms. Lindsay said. About 30 potential buyers attended showings during the few days the house was on the market.
July and August typically offer a bit of a lull between the more vigorous spring and fall markets, says Matthew Regan, a real estate agent with Royal LePage Real Estate Services, but he has noticed a recent bounce in Mississauga and Oakville, where he does most of his business.
“In the past couple of weeks, I’m seeing life.”
Mr. Regan has been keeping an eye on a house listed in the coveted Lorne Park area of Mississauga in the fall of 2016 with an asking price of $3.5-million. The property rode the fall market into an even better spring market and into the summer without selling, Mr. Regan says. Last week, the property sold – without the owners ever cutting their asking price, he says.
Mr. Regan says sellers have mainly been falling into two camps – those who have a reason to sell and those who are just testing the market. The former have tended to sit and wait while the latter have been pulling their houses off the market if they don’t get the amount they’re looking for.
“The other kind of seller was the kind who just went fishing – cast a line and said, ‘I’ll see if I get my fish.’ They got tired.”
Mr. Regan cites another example, where a house was listed in the late spring in the popular River Oaks neighbourhood of Oakville with an agent in Mr. Regan’s office. The asking price of $1.198-million tends to draw buyers to the coveted school district.
“That’s a sweet spot because $1.2-million is affordable for a lot of buyers in Oakville,” Mr. Regan says.
In the middle of June, about 32 properties were listed for sale in the pocket.
“Nothing was moving.”
Recently, the house sold for $1.1-million. The sellers were happy, Mr. Regan says, because they still received more than they would have if they had listed last summer. When Mr. Regan looked at the house in the fall, he estimated it might sell for $950,000 or $975,000.
The homeowners may have received more in the early spring, he says, but it’s very difficult to time the market perfectly.
“In February or March, they might have sold it for more money, but that would have been luck – pure luck.”
In April, the Ontario government announced new measures aimed at cooling an overheated market in the Greater Toronto Area and beyond. Jittery buyers became fearful about buying in an uncertain market while listings surged as some sellers rushed to cash out.
In May, the market stalled as players on both sides tried to figure out the impact the rule changes would have.
Mr. Regan says listings in River Oaks are still sitting, but one sale may lead to others because the pocket now has a new benchmark price. Also, prospective buyers can see that other house hunters are stepping forward.
“They’ve elected to buy a house where no one was buying a house for a month or two months,” he says.
Mr. Regan says the sellers who were just fishing for a high price were diluting the market. As they drop out and buyers return, he hopes to see a healthy market balance.
“What isn’t a healthy market is a pool of sellers just sitting and buyers scratching their heads.”
He expects inventory to rise in the fall as usual at that time of year, but he doesn’t predict a surge.
“The people who got tired of trying for an unrealistic number, it’s unlikely they’ll go back in the fall,” he says.
He also doesn’t expect a repeat of the zaniness of the spring, with prices climbing at warp speed. Buyers became fed up with bidding wars, he says, and few agents are still setting artificially low asking prices in the hopes of sparking one.
“That strategy is gone.”
He predicts that most agents will list houses with an asking price close to the market value and accept offers any time.
For buyers, he expects that “old school” way of negotiating a purchase to come as a relief.
“You don’t have to panic,” he tells buyers, “like in the spring, when a half-decent house would have been gone in 48 hours.”
Elli Davis of Royal LePage Real Estate Services Ltd. says she has fewer listings than normal at the moment and she is encouraging potential sellers to list after this weekend’s holiday.
“After the long weekend in August, I almost find like that’s the turn,” she says. “The buyers are there anyway.”
She recommends that homeowners set a reasonable asking price for their location and style of house. In midtown Toronto, she rarely holds back offers now, but on occasion a house merits that approach.
“Sellers have to be realistic. It’s a one-by-one conversation. No two listings are the same.”
Ms. Davis recently sold a small, one-bedroom condo unit in the Distillery District. The condo, in the $350,000 range, sold for $25,000 above asking.
She listed the unit on a Thursday without an offer date, but when she saw the demand, she set a deadline for the following Monday. The sellers received four offers.
“It was the right move because they certainly got more on the Monday than they would have on the Friday.”
She says the condo needs updating, but a lot of people are looking for an older unit to renovate.
After the long weekend, she plans to list a three-bedroom condo unit at 110 Bloor St. W. with an asking price just under $2-million. The 2,600-square-foot unit is in original condition, which is rare in a 35-year-old building.
“People like that. If it’s going to be renovated, just do it all at once and make it to their own taste.”
Ms. Davis does know of some houses that have been sitting on the market, but she believes some sellers are too optimistic. If they refuse to budge from their asking price or plan to retreat and list again in the fall, she predicts they will have less success. She would do the opposite – stay on the market and trim the price, she says.
“I wouldn’t wait until after Labour Day. I’m putting properties on now because there’s not much.”
Market Continued to Adjust in July
August 3, 2017 — Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 5,921 residential transactions through TREB’s MLS® System in July 2017. This result was down by 40.4 per cent on a year-over- year basis, led by the detached market segment – both in the City of Toronto and surrounding regions. While sales were down, the number of new listings reported were only slightly (+5.1 per cent) above last year’s level.
“A recent release from the Ontario government confirmed TREB’s own research which found that foreign buyers represented a small proportion of overall home buying activity in the GTA. Clearly, the year-over-year decline we experienced in July had more to do with psychology, with would-be home buyers on the sidelines waiting to see how market conditions evolve,” said Mr. Syrianos.
“Summer market statistics are often not the best indicators of housing market conditions. We generally see an uptick in sales following Labour Day, as a greater cross-section of would-be buyers and sellers start to consider listing and/or purchasing a home. As we move through the fall, we should start to get a better sense of the impacts of the Fair Housing Plan and higher borrowing costs,” said TREB CEO John DiMichele.
The MLS® Home Price Index (HPI) Composite Benchmark price was up by 18 per cent on a year-over-year basis. However, the Composite Benchmark was down by 4.6 per cent relative to June. Monthly MLS® HPI declines were driven more so by single-family home types. The average selling price for all home types combined was up by five per cent year-over-year to $746,218.
“Home buyers benefitted from more choice in the market this July compared to the same time last year. This was reflected in home prices and home price growth. Looking forward, if we do see some would-be home buyers move off the sidelines and back into the market without a similar increase in new listings, we could see some of this newfound choice erode. The recent changes in the sales and price trends have masked the fact that housing supply remains an issue in the GTA,” said Jason Mercer, TREB’s Director of Market Analysis.
The itch to retire comes to everyone at a different time in their life – but how do you really know when it is the *right* time? Retirement readiness is more than checking things off a list, here are a few things to consider:
Part Time Work – For some, the initial bliss of retiring quickly fades. For others, the need to have an income, however modest it may be, is still present. Whatever the reason may be, consider whether the next phase in your life includes part-time work.
Health Care – It is startling to report that less than 50% of the population retires at the time they planned. Make sure that whether you choose to retire or not, your health is prioritised such that your future plans ensure more positive than negative impacts on your physical and mental health.
Retirement Budget – For most of us, the budget we live on whilst working will not be the same as when we are retired. Create a more restrictive budget for the following six months and test out how financially sound this plan is for you.
Bandwagon Mentality – It can be all too easy to fall into a mindset that you are ready to retire, simply because you are of a certain age or because all your co-workers and friends are retiring. Sit down and ask yourself why you feel the way you do and what is more important to you right now. Do what is right for yourself, and not what everyone else is doing.
Dependents – We live in an economy where it is common for many parents to still be financially stabilising their children or other dependents. If you are in this position, create a plan that either allows you to continue to help your dependents once you are retired or slowly cut back how much you are assisting your dependents through a transitional phase.
Assets – If your home is paid off, you luckily have no worries about paying for accommodation on a month-to-month basis. Rather, it might become a worry to pay maintenance, taxes, or repair fees for a property that you could easily carry while working. Consider whether it is financially worth keeping the property or renting out part of the property, or even downsizing altogether to live off the proceeds.
Strength of Your Portfolio – The younger you are, the more likely you can withstand risks in a market downturn. When you are older, it becomes more difficult to withstand long periods of financial loss on your return to investment. Diversify your portfolio and invest as many tax-deferred or tax-free investments as you can.
While this guide can lead you down the correct direction in knowing whether you are ready to retire, ultimately only you can arrive to this conclusion.
Summer is in full swing and with temperatures climbing in the city, now is a good a time to remind ourselves of sun safety to ensure we have a happy and healthy summer. Here are 6 things to remember while enjoying the summer’s heat:
1. Hydrate. Dehydration happens when we lose more fluid than we take in. When this happens, our bodies doe not have enough water or other fluids to carry out their normal functions. Summer heat can cause excessive sweating, especially when being physically active. Drink additional water in hot or humid weather to help lower your body temperature and replace lost fluids.
2. Protect your skin. Skin cancer is the most commonly diagnosed form of cancer in Canada. If it is caught early, it can usually be easily treated. Higher risk is involved if you have light skin, eyes or hair, skin that burns or freckles easily, unusual moles or a family history of melanoma. Protect yourself by having regular skin screenings and wearing appropriate sunscreen. For extra protection, ensure your head is covered at all times and that you cover as much skin as possible in layers of light clothing. Remember that the sun’s peak hours are between 10 am and 4 pm. The key is moderation!
3. Protect your eyes. Long term exposure to UV rays can contribute to cataracts and age-related macular degeneration. Bright light can damage your retina, be sure to protect your eyes by wearing sunglasses that filter out 100 per cent of UV light – especially around water. Water can reflect a tremendous amount of light to your eyes. Always have a hat and pair of sunglasses handy wherever you go.
4. Prevent heatstroke. Heatstroke is one of the most serious heat-related problems. It results from exercise or heavy work in hot environments combined with inadequate fluid intake. The main symptom of heatstroke is a significantly elevated body temperature. Ensure you limit your exposure to the sun and keep physical activity to a minimum during extremely hot days.
5. Boost your diet. With higher temperatures, we sweat more and burn more calories. Certain foods are great at keeping us cool like watermelon, coconut water, yogurt, cucumber and mint. Ensure you are getting your vitamins and antioxidants wherever you can. Certain vitamins are extra important during the summer months. For example, Vitamin E helps to protect the cells from damage caused by free radicals and it contributes to healthy skin, eyes and immune system. Always consult your doctor before introducing any new vitamins or supplements to your diet.
6. Use caution when exercising in the heat. If you are planning on going for a run or hike, opt to go early in the morning or in the evening when the temperature is lower. Stay away from strenuous workouts if there are heat or smog warnings. If you are used to exercising indoors or in cooler weather, take it easy at first when exercising in the heat. Make sure you drink plenty of water and wear appropriate clothing. Swimming is also a great, cool, outdoor activity to try!
This is the time for vacations, relaxation and adventure, but we also we need to take extra precautions and protect ourselves from the sun’s rays. Wishing everyone a happy and healthy rest of the summer!
Done Deals: Renovated home in midtown Toronto an alternative to pricey new builds
Special to The Globe and Mail
Published Thursday, Jul. 20, 2017
686 Oriole Parkway, Toronto
ASKING PRICE: $1.785-million
SELLING PRICE: $2-million
PREVIOUS SELLING PRICE: $760,000 (2001)
TAXES: $8,613 (2016)
DAYS ON THE MARKET: Two
LISTING AGENT: Elli Davis, Royal LePage Real Estate Services Ltd.
The Action: Midtown properties were in short supply this May, so this two-storey house on a 27-by-187-foot lot only had eight visitors before one tabled a pre-emptive offer.
“Brand-new homes would be quite a bit more money, but because this was a little older and in excellent condition, it offered better value,” said agent Elli Davis, who explained that newly built houses can command up to $3-million. “[Plus] Allenby school is a big draw in that area.”
What They Got: A portion of a short street north of Eglinton Avenue has houses that back onto Eglinton Park and Marshall McLuhan Catholic Secondary School to the east and west respectively. In the latter category is this 32-year-old house with a garage accessible from a lower-level recreation room with a wet sauna and gas fireplace.
High-traffic quarters encompass an eat-in kitchen with an island and an open entertaining area with a second fireplace and a pair of French garden doors.
Upstairs are three bedrooms and two of four bathrooms.
The Agent’s Take: “The best parts of the house were that it was detached, has a very spacious main floor and an open concept living/dining area that walked out to a very deep and beautiful tiered garden,” Ms. Davis said.
“It also had very pretty street presence and beautiful landscaping, front and rear, which enhanced the home.”
I had the pleasure of being interviewed by Andrew Khouri of the LA Times about the reasons why Canadians are investing in American real estate. Read the full article below:
Foreigners Buy Record Numbers of US Homes Despite Fears of Immigration Crackdown
Published: July 18, 2017
Foreign home buyers scooped up a record number of residential properties in the United States in the last year, despite a rising dollar and political uncertainty, according to a survey released Tuesday.
The National Assn. of Realtors said foreigners bought 284,455 properties in the 12 months that ended March 31, about a third more than a year earlier. Dollar volume surged nearly 50% to $153 billion, also a record for the survey first taken in 2009.
Chinese nationals were the biggest buyers, purchasing $31.7 billion worth of property, up from $27.3 billion a year earlier and more than ever before, the Realtors said.
But the largest increase came from a surge in buyers from Canada, where prices have skyrocketed in recent years, partially due to Chinese investment there.
Canadians purchased $19 billion worth of residential property, compared with $8.9 billion in the 12 months ended March 2016, the Realtors said in their annual report on international investment.
Lawrence Yun, the association’s chief economist, said sky-high home prices in Canada, especially in the big cities of Toronto and Vancouver, were behind the surge.
The provincial governments overseeing those two cities have even instituted additional property taxes on foreign buyers, after complaints Chinese investors there caused the market to spiral out of control.
Toronto real estate agent Elli Davis said buyers are cashing out and using the money to buy smaller homes in Canada and second houses to vacation in the United States, usually in Florida.
“The Canadians love your weather,” Davis said. “And we have more money because of our real estate market here — that’s really the answer.”
The dramatic jumps come despite a higher U.S. dollar that has made properties more expensive for many foreigners.
In addition, the survey period includes the U.S. presidential campaign and the beginning of the administration of President Trump, who has a history of divisive rhetoric against immigrants and has called for restricting both legal and illegal immigration.
“The political and economic uncertainty both here and abroad did not deter foreigners from exponentially ramping up their purchases of U.S. property over the past year,” Yun said. “Foreigners increasingly acted on their beliefs that the U.S. is a safe and secure place to live, work and invest.”
Yun said buyers may have been motivated because of a rising dollar, eager to get into the U.S. market before their own currencies could buy even less.
Still, even with all that growth, foreign buyers only accounted for 5% of all previously owned home sales during the 12-month period, up from 4% in the prior survey.
California made up 12% of foreign-purchased homes by dollar volume, tied with Texas and second only to Florida, which accounted for 22% and where most foreign buyers are from Latin America and Europe.
Foreign buyers in California purchased $35 billion worth of properties, up from $27 billion a year earlier.
The national association could not provide data on the number of foreign sales in the state. But the increase in dollar value far exceeds gains in the median home price, which would indicate there were more sales as well.
Buyers from Asia and Oceania represented 71% of foreign buyers in California compared with 51% a year earlier, the Realtors said in their report.
The survey results run counter to observations from real estate agents in Southern California, who said they have noticed a slowdown in Chinese buyers.
Agents have said luxury properties in the San Gabriel Valley marketed toward Chinese buyers are taking longer to sell, as Beijing has cracked down on the amount of capital that can taken out of the country for foreign investments.
“It’s not easy to move funds from China,” said Helen Chen Marston, a San Gabriel Valley real estate agent. “The luxury home market stopped.”
She said there are far more Chinese buyers for properties under $1 million, but even that market is a bit slower than last year.
“You are facing the same problem” of stricter controls, she said.
However, William Yu, an economist with the UCLA Anderson Forecast, wasn’t particularly surprised over the increase in Asian buyers in California.
He said the most restrictive measure to stem outflows from China came at the end of 2016, meaning a good portion of the survey covered a time with less-strict regulations. As home prices have risen in California and capital restrictions increased, he said buyers from China might simply be casting a wider net for cheaper properties.
“California is big, and Los Angeles is big,” said Yu, who studies the effect of the Chinese economy on the U.S. “We are probably seeing more and more Chinese buying across the region than in the past.”
Still others were surprised over the report.
Leslie Appleton-Young, chief economist with the California Assn. of Realtors, said in addition to reports over fewer Chinese buyers, some agents in the Palm Springs area had Canadian clients looking to sell after the election, given the uncertainty over U.S. immigration policy.
“I was expecting to see the numbers about the same or a little less,” she said.
Yun, in a news release, acknowledged Realtors in some markets have seen less interest from Chinese buyers this year and that foreign investment overall may not keep increasing.
“Stricter foreign government regulations and the current uncertainty on policy surrounding U.S. immigration and international trade policy could very well lead to a slowdown in foreign investment,” he said.
Nearly 6,000 Realtors responded to the survey, which the association said has a margin of error of plus or minus 1 percentage point. The number of homes sold and dollar volume are extrapolated from those answers.
The survey defines foreign buyers to be non-U.S. citizens with permanent residences outside the country, as well as noncitizens who have lived here for more than six months on temporary visas or immigrants who have lived here less than two years.
The majority of properties purchased, 64%, were single-family houses, followed by condos, town homes, other miscellaneous properties and other residential land.
The median price of homes purchased by foreign buyers was $302,290, compared with $235,792 for all homes sales. The difference is in part because foreign buyers tend to purchase in large, pricey metropolitan areas.
I was interviewed by Diana Olick of CNBC about what makes American real estate so popular for Canadians. Read the full article below:
Foreigners Snap Up Record Number of US Homes
Diana Olick, CNBC Real Estate
Tuesday, 18 July 2017
Foreign purchases of U.S. residential real estate surged to the highest level ever in terms of number of homes sold and dollar volume.
Foreign buyers closed on $153 billion worth of U.S. residential properties between April 2016 and March 2017, a 49 percent jump from the period a year earlier, according to the National Association of Realtors. That surpasses the previous high, set in 2015.
The jump follows a year-earlier retreat and comes as a surprise, given the current strength of the U.S. dollar against most foreign currencies, which makes U.S. housing even more expensive. Apparently, the value of a financial safe-haven is outweighing the rising costs.
Foreign sales accounted for 10 percent of all existing home sales by dollar volume and 5 percent by number of properties. In total, foreign buyers purchased 284,455 homes, up 32 percent from the previous year.
Half of all foreign sales were in just three states: Florida, California and Texas.
Chinese buyers led the pack for the fourth straight year, followed by buyers from Canada, the United Kingdom, Mexico and India. Russian buyers made up barely 1 percent of the purchases.
But the biggest overall surge in sales in the last year came from Canadian buyers, who scooped up $19 billion worth of properties, mostly in Florida. They are also spending more, with the average price of a Canadian-bought home nearly doubling to $561,000.
“There are more [baby] boomers now than ever before. It’s the demographic,” said Elli Davis, a real estate agent in Toronto who said she is seeing more older buyers downsize their primary home and purchase a second or third home in Florida. “The real estate here is worth so much more money. They all have more money. They’re selling the big city houses that are now $2 million-plus, where they went up so much in the last 10 to 15 years, so they’re cashing in.“
Despite the anti-immigrant rhetoric from the Trump administration, especially about building a wall between the U.S. and Mexico, nonresident buyers from Mexico were undeterred. Mexican buyers nearly doubled their purchases by dollar volume from a year earlier, coming in third behind China and Canada.
“You could easily make the point that perhaps their uptick was wanting to buy now before new immigration policy was in place,” said Adam DeSanctis, economic issues media manager at the National Association of Realtors.
In general, though, Mexicans have been buying less expensive homes. The average purchase price of buyers from Mexico came in at about $327,000, compared with the $782,000 average among Chinese buyers and $522,000 for Indian buyers. Mexicans overwhelmingly favored homes in Texas, while Chinese buyers opted more for California and, increasingly, Texas.
“The environment is much more Asian-friendly than it used to be with churches, grocery stores and schools that cater to their tastes,” said Laura Barnett, a Dallas-Fort Worth area Re/Max agent. “I have been told they target good schools and newer homes. Yards are not a high priority, but rather community parks.”
It’s also possible that Chinese buyers are being priced out of California. The average price of a home purchased by a buyer from China fell from about $937,000 to $782,000, even as the number of properties purchased jumped to nearly 41,000 from 29,000. The drop in purchasing power likely stems from tightened regulations in China with regards to capital outflow.
While international interest was quite strong in the second half of last year, it may now be weakening due to tighter regulations in China and weakening currencies in some international markets.
“Stricter foreign government regulations and the current uncertainty on policy surrounding U.S. immigration and international trade policy could very well lead to a slowdown in foreign investment,” said Lawrence Yun, chief economist for the NAR.