01 Dec The Top 3 Rules of Real Estate
The Top 3 Rules of Real Estate
The top 3 rules of real estate held true years before I got my realtors license and still ring true today!
Those 3 rules are:
and by now you can guess the 3rd ….that’s right,
When working with my clients, it’s always my humble advice for them to buy the best location their dollars can afford. Unless you’re a professional flipper, real estate is a long game. When analyzing the prices of properties over longer time spans of five, ten, fifteen years, etc., real estate prices have only gone in one direction, and that’s up!
Real estate will generally appreciate over time no matter where area purchase but how much it appreciates varies greatly depending on the neighborhood. If we take Westmount for example, we can see by this graph by Andy Dodge & Associates, the level of home price appreciation from 2015 to 2020.
While the median for Quebec is $252,450 , which means that Westmount’s median price is $1,830,000 considerably better than the rest of the province. From our data, it appears that neighbourhood is number 243th when comparing neighbourhoods by the number of properties available to investors across the nation, putting it in the top 10.
In my humble opinion, if you’re looking to invest in property for your own use and enjoyment over many years, it’s all about the neighborhood. I would rather have less house in a better neighborhood than a bigger house in a not so great neighborhood. When you’re buying a home, you’re also buying into a neighborhood with all it’s features, demographics and amenities, such as transportation, proximity to schools, safety, local restaurants and shops etc.
And now for some recent market stats according to Royal Lepage’s Real Estate Report:
“Pandemic-shift: spike in savings diverted into housing driving national median home prices up 8.6%
- Delayed spring market extends through Q3 as pent up demand fuels prices and sales
- 97% of regions surveyed post price appreciation in third quarter despite economic shock of COVID-19
- Ontario and Quebec real estate markets dominate list of highest appreciating regions, with Windsor in the top spot at 17.0%
- The aggregate1 price of a home in Canada increased 8.6 per cent year-over-year to $692,964 in the third quarter, as high demand and low inventory continued to fuel a seller’s market.
- “Typical consumption patterns have been disrupted in 2020 as the pandemic has driven the household savings rate to levels not seen in decades,” said Phil Soper, president and CEO of Royal LePage. “Most Canadians have sharply reduced spending on discretionary goods and services involving a great deal of human interaction, and with mortgage rates at record lows, many have refocused on housing investments, be it renovations to accommodate work-from-home needs, a recreational property or a new property better suited for the times.”
- “In urban centres across Canada, housing inventory has failed to keep up with household formation. Chronic under-supply has created a robust pipeline of potential buyers that currently far outsizes the number of homeowners who may need to sell as a result of COVID-19 related job loss.”
- “The price of condominiums, the sector hardest hit by the pandemic, has risen 5.3 per cent nationally compared to last year. According to the national survey, 89.4 per cent of agents had to place at least two offers on behalf of their clients to purchase a home during the third quarter. Sixteen per cent had to place more than 5 offers. In Quebec, the proportion of agents that had to place more than 5 offers rose to 19.1 per cent, the highest in the country.”
- “Nationally, real estate markets in Ontario and Quebec posted the highest price appreciation. In Quebec, the fastest appreciating regions were in the Greater Montreal Area, where the aggregate price of a home rose 12.5 per cent year-over-year in the third quarter driven by gains made in Montreal Northshore (13.4%), Montreal East (12.3%) and Montreal Centre (12.2%).
- City of Montreal posts highest luxury house price appreciation across Canada rising 15.9% year-over-year
- Since the onset of the pandemic, the median price of a luxury house in the City of Montreal rose 15.9 per cent year-over-year to $1,975,000, while the median price of a luxury condominium decreased slightly by 1.5 per cent year-over-year to $1,254,000. The double digit price increase in the city’s luxury house segment was the largest gain of both property types across all regions surveyed.
According to the Royal Lepage report: “Home price gains realized this quarter are forecast to be sustained through December, While the pace of price growth is expected to slow considerably in the final weeks of this most unusual year, it is highly unlikely we will see housing values back up.”