Strong reSultS poSted in February

A total of 7,291 single family homes were sold in the GTA in February, representing a 77% increase versus February 2009 when only 4,120 sales were recorded. Since last year’s performance was mired by the impact of the economic recession, a more valid comparison would be to the February average for the five years preceding 2009. By that yardstick, February sales are still up a substantial 15%, revealing that we are indeed in the midst of a very robust market. Rock bottom interest rates and increased consumer confidence are still powering the market; buyers are also being motivated by the knowledge that rates will soon increase and there is a strong desire to lock-in rates now. Buyers are also being motivated by a

desire to avoid the impact of HST on closing and other costs relating to resale transactions (the new 13% HST will become effective on July 1, 2010).

The average home selling price in February jumped to $431,509 which is up a whopping 19% versus February 2009. In fact, this price establishes a new all-time high average selling price for the GTA. Market supply remains tight with only 14,514 active listings on the market at month-end (decline of 32% versus year ago). Days on market is down to just 22 days, a far cry from the year ago number of 45 days.

GTA RESALE HOME SALES (UNITS SOLD) - FEBRUARY

4,000 5,000 6,000 7,000 8,000

2010

2009

2008

2007

GTA RESALE HOME SALES (AVERAGE PRICE) - FEBRUARY

$350,000 $375,000 $400,000 $425,000 $450,000

2010

2009

2008

2007

MarketViews

Magda Mo Sales Representative

416-483-8000

sales@magdamo.com | www.magdamo.com

MAGDA MO’S PREFERRED CLIENT NEWSLETTER MAR/APR 2010

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It is somewhat strange that the organized real estate community in Ontario is still highly concerned about urea formaldehyde foam insulation (UFFI) in houses, years after it was proved that it carries no health risks, and yet radon gas and other environmental contaminants – which exist in many homes and can be fatal – are hardly ever mentioned in residential purchase agreements.

For several decades, the standard Ontario Real Estate Association agreement of purchase and sale has contained a warranty that the seller has not insulated the house with UFFI. This, despite the fact that 15 years ago a Quebec court ruled, after an eight-year trial, that there was no basis for fear of health risks and no justification for removing UFFI from houses.

Radon, on the other hand, has one known health risk – exposure above certain levels increases the risk of developing lung cancer.

A detailed guide on the Web site of Canada Mortgage and Housing Corp. (CMHC), explains that radon is a radioactive gas that is colourless, odourless and tasteless. It is formed by the breakdown of uranium, a natural radioactive material found in soil, rock and ground water.

When radon escapes from the ground into the outdoor air, it gets diluted and is not a concern. But when it seeps from the ground into an enclosed, unventilated space like a house, it can sometimes accumulate to high levels and contaminate the inside air.

Back in the 1970s, Health Canada surveyed the radon levels of 14,000 homes in 18 cities across Canada. A small but significant minority of homes in some locations were found to have high levels of radon gas. In Canada, the Radiation Safety Institute says that long-term exposure to radon causes about 2,000 deaths per year and is the leading cause of lung cancer among non-smokers.

In addition, it can greatly increase the chances that a smoker living in a contaminated house will acquire lung cancer.

Radon is measured in units called “becquerels per cubic

meter (Bq/m3),” and the government of Canada’s guideline limit for radon in indoor air is 200 Bq/m3. Even this figure is too high for the World Health Organization, which last year published a handbook proposing a maximum indoor level of 100 Bq/m3.

The City of Toronto Web site advises residents that the only way to find out if a home contains radon is to have it tested. A do-it-yourself radon gas test kit by Pro-Lab is available at Canadian Tire at a cost of $9.99 plus a $30 lab fee. The City of Toronto Web site suggests that kits may also be available from smaller retailers and online for about $50 (Google: “radon test kit Canada”). As an alternative to the do-it-yourself kits, the City of Toronto also suggests that a trained environmental technician can conduct a test for indoor radon levels. This type of test may be more expensive than a passive kit, but the results would be available much faster.

If excess radon is detected in a house, Health Canada recommends that steps be taken to reduce radon levels. The cost is estimated at about $2,500.

As more and more Canadians become aware of the dangers of radon in homes, it may become an important factor in sales transactions.

The typical home inspection does not test for environmental issues such as mould, asbestos, urea formaldehyde, or the telltale signs of a marijuana grow-op or meth lab.

Sooner or later – hopefully sooner – an indoor air quality test will become a standard part of real estate purchases, and the standard form agreements will contain warranties as to air quality.

This article was contributed by Bob Aaron, a prominent Toronto-based real estate lawyer. Visit him online at www.aaron.ca

Legally SpeakingThe perils of radon gas

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Trendy Corner

The right colour of paint in the right place can often add more perceived value to your home than investing in a new furnace or roof. An urban myth exists that, for the purposes of resale, it’s best to paint your home pale and neutral. You don’t want to offend anyone, right?

You walk a fine line while playing it safe because pale and neutral could very well bore a prospective buyer. If a buyer looks at several homes, yours might be forgotten because it’s neutral.

Real colour will evoke emotional responses. Usually, buying a home is an emotional decision made within ten minutes of entering the home. It’s not just the listed features that clinch the deal. It’s how a person feels about the space.

Although it’s not possible to second-guess a potential buyer’s taste in colour – everyone has different tastes – a good balance of neutral and dramatic, pale and saturated, or warm and cool colours will set the stage and market your home, even if the buyer plans to change it when they move in.

Your paint colours must be in accord with your furniture. For example, if you have a big red sofa bought on impulse, help it fit in by putting the same red on an accent wall nearby. If you have an expanse of green carpet, don’t fight it. Try muted green tones on the walls in that room. The end result will flow much better.

A Case StudyOne traditional three-bedroom home had plenty of natural light with ivory and celery green furnishings and off white walls throughout. It appeared very washed out and slightly clinical.

To update the look, the foyer was painted with a strong welcoming shade of muted raspberry. Next, the living room, with its pale floor, ivory upholstery and celery green cushions and drapes, received a mocha brown on the walls. Because there was a lot of light, the mocha brown created a wonderful backdrop without closing in the room.

The opening from the living room to the dining room was an open double doorway; so it was critical the next colour flowed from the mocha. A rich, mid-tone salmon colour was selected and it fit perfectly. The depth of this colour enhanced the pale wood, creating the intimate feel a dining room should have. For flow, the salmon tone was carried into the kitchen as well where it revamped the look of what had been an all-white kitchen.

Next for the central hall and stairwell, the three warm colours were tied together with a pale, cool green-based stone colour. The balance of warm and cool colours gave a harmonious feeling to the space.

Finally the upstairs of the house was transformed. The living room mocha was repeated in the bathroom which updated the look of a once very basic bath. The walls of the master bedroom which had white furniture were painted a sage gray-green. The walls of the teenager’s room which had pine furniture became denim blue. And the nursery was painted a pale lavender.

Overall the new paint effects made the house dramatic; it showed well and sold quickly with strong colour playing a major role.

This article was contributed by Sylvia O’Brien, a Toronto-based colour consultant. Visit her online at www.colourtheory.net

Challenging the urban painting myth

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Finally some definitions that really make sense:

Cannibal: Someone who is fed up with people.Egotist: Someone who is usually me-deep in conversation.Flabbergasted: Appalled over how much weight you have gained.Abdicate: To give up all hope of ever having a flat stomach.Coffee: A person who is coughed upon

Economic growth surged by 5% on an annualized basis in the 4th Quarter of 2009, which is the clearest sign yet that a broad-based recovery has taken hold in Canada. The surge was fuelled by everything from a strong housing sector and healthy consumer spending, to a surprise turnaround for net trade. In fact, our exports grew at almost double the pace of imports.

While this is certainly welcome news, it does potentially increase the risk of interest rates rising a bit sooner than previously expected as well as interest rates rising on a greater scale than previously expected. While the Bank of Canada decided to hold the trend-setting central bank rate at the record low 0.25% in its March 2nd announcement, it is becoming increasingly likely that the widely anticipated rate increases will start occurring sometime around June of this year.

Widely expected summertime interest rate increases

combined with the July 1st introduction of the HST in Ontario will almost certainly result in a “perfect storm” for the resale housing market over the next few months. Buyers will be out in full force to mitigate against both of these increased cost factors. In fact, it may be a very long time before we will ever see a “perfect storm” like this again.

So if you were planning a move over the next 1-2 years anyway, you may want to give serious consideration to advancing your timetable. Prices have been increasing but more so toward the bottom end of the scale than the mid to upper end, meaning that this is also an ideal time to “trade up” in the housing market.

As usual, your client referrals are both highly valued and much appreciated. Until next time, take care!

In accordance with PIPEDA, to be removed from this mailing list please e-mail or phone this request to the REALTOR® Not intended to solicit buyers or sellers currently under contract with a broker. The information and opinions contained in this newsletter are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for damages resulting from using the published information. This newsletter is provided with the understanding that it does not render legal, accounting or other professional advice. Statistics are courtesy of the Toronto Real Estate Board. Copyright © 2010 Mission Response Inc. 416.236.0543 All Rights Reserved. D114

Magda Mo Sales Representative

416-483-8000

sales@magdamo.com | www.magdamo.com

Sutton Group Bayview Realty Inc., Brokerage 1820 Bayview Avenue, Toronto, ON M4G 4G7

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