Quick Hits

Quick Hits!

8 minute read

June 3, 2019

Are interest rates staying put for another 18 months?

I briefly alluded to this in Wednesday’s blog post, but it bears mentioning again.

After all, how many people out there have been using the old, “the market is going to crash because interest rates will go up” argument for a decade?

Here’s the article that appeared in the Financial Post, for those of you who didn’t click on Wednesday:

“Bank Of Canada Done Raising Rates Until End Of 2020, With 40% Chance Of Cut, Poll Says”

This article came out ahead of last Wednesday’s interest rate announcement by the Bank of Canada, and predicted, as everybody did, that rates would stay the same.

Rates did stay the same.

And the article, as you can assume from the title, goes on to explain why rates will continue to stay the same for the rest of the year, and into next year as well.

I find this to be incredibly ironic, given all the doomsdayers suggesting that rates were going to rise, and the market was going to fall as a result.  Which doomsdayers?  Um, all of them.

I don’t normally do this, but in this case, I will.

I’d like to pay myself on the back for my early-January prediction, which you can read HERE, whereby I said that rates wouldn’t be raised in 2019, in fact, they would more likely be cut.

I took some flak for that, both on TRB and outside of it.  Many suggested that this was real estate cheerleading more than anything, and my comments weren’t based on anything substantive.  But does it matter what my prediction was based on?  No, I didn’t have a computer simulation test out a billion different real estate scenarios, but rather I felt, based on my view of the real estate market, the economy, and the government, that rates would not increase.

And they won’t.

do believe, however, that they will actually drop, perhaps at the end of the year, and perhaps into early 2020.   But I don’t see a rate hike coming.

From the Financial Post article above:

All 40 economists in the latest poll taken May 21-23 said Governor Stephen Poloz and fellow policymakers would hold rates at 1.75 per cent at the May 29 meeting.

While median forecasts show rates unchanged from here on, forecasters were split in three directions starting from the fourth quarter of this year. By end-2020, about two-thirds who provided a view said rates would be either unchanged or lower.

And from Morgan Stanley:

“We see little impetus for policymakers to resume rate hikes over our forecast horizon, as sluggish growth and lingering slack in the economy will continue to warrant leaving some policy accommodation in place,” wrote Morgan Stanley economists in a note.

“If growth fails to show any convincing signs of a rebound in 2019, we think the risks of rate cuts will increase, and given our sluggish outlook, we place a subjective 40 per cent probability that the BoC will deliver at least one 25 basis point rate cut over the next 12 months.”

And last but not least, just to include something depressing:

Chances of a recession in Canada in 12 months were 20 per cent, rising to 27.5 per cent in the next two years, a Reuters poll taken in April found.

We can debate why rates should increase, or decrease, until the end of time.  We all have our opinions

Real estate “firsts” are always interesting…

Yet another story about a lockbox, I know, I know.  You’ve heard it all!

But this one is different, let me explain.

You’ve heard everything there is to hear by now – lockbox “railings” that contain 200 boxes, many with no identifiers; lockboxes freezing in winter; agents who use old and broken lockboxes that don’t work, rather than spend $40 on a new one; lockbox locations that send buyers and buyer-agents on scavenger hunts, etc.

But what about when you need to get a lockbox off, but can’t?

I have a listing where a buyer-agent, in his or her infinite wisdom, put the FOB and the key back in the box in a way that wouldn’t allow the face of the box to close.  But this agent pushed really, really hard, and was able to essentially force or bend the face until he or she heard “click,” and then figured that the box was closed.

The box was closed.

Forever.

I use this one, which I think is the best one on the market for a host of reasons:

There is no “dial” to jam.

There is a cover (not shown) that protects it from the elements.

It doesn’t freeze.

Bush-buttons are the best.

And the inside compartment is the largest.

However, there’s a small metal bar on the inside, and I suppose the agent in my story put the FOB and the key at the bottom of the box, on top of the bar, and with a lot of elbow-grease was able to shut the box so it’ll never shut again.

After the sellers and I figured this out, we set up a second lockbox, with another unit key.

But what about the first lockbox?  The one with my client’s $100 FOB?

It would have been there forever, if not for…..

…….bolt cutters.

Yes, bolt cutters.  The only way to get that lockbox off, since I’m sure (eventually?) management would have wanted it removed.

The most interesting part of this story (since it’s kind of lame so far…) is that my colleague and I came through the lobby with a pair of bolt cutters, walked right past concierge, and nobody said a thing.

Just a couple of guys, walking into the condo with bolt cutters.

Then, SNAP!

And still nobody said a thing.

Perhaps we just looked trustworthy?  Or maybe I’m over-stating the level of fear that a pair of 3-foot-long bolt cutters actually musters up…

Are real estate brokerage mergers good, bad, or inconsequential for the real estate market?

There was a great article by Globe & Mail columnist Shane Dingman two weeks ago that, personally, I missed.

It was about real estate brokerage mergers, buyouts, or take-overs; whatever you want to call them.

This might be inconsequential for anybody outside of real estate, but I know that a slew of Toronto agents read my blog.

Here’s the article:

“Wave of Buyouts Changing Toronto Brokerage Landscape”

The first buyout on the list might have the most agents, but the last one has the biggest names:

On April 10, independent brokerage Right at Home Realty Inc. announced it had purchased Your Choice Realty, adding to its existing 4,500 sales representative workforce another 450 realtors and branches in Barrie, Ont., Burlington, Ont., Hamilton and Ottawa.

On March 27, fellow indie brokerage iPro Realty Ltd. announced the acquisition of three offices for Kingsway Real Estate Brokerage, which could add close to 600 agents.

And just last week Peerage Realty announced it was buying Sotheby’s International Realty Canada and its 540 realtors.

Maybe I should be looking to buy out some real estate blogs in South America or something…

What’s the etiquette on cancellations?

Here’s a bad one.  This really, really got my blood boiling…

An appointment was booked on one of my listings for 9:30pm on a Friday night, and what’s more is that it wasn’t a 30-minute appointment; the agent requested the full hour.

Many buyer agents won’t bother stating whether they are booking for a half-hour or an hour, and to be fair, many listing agents don’t instruct their front desks to ask.

I do, however, and this agent wanted an hour.

My clients have a newborn baby, and rather than cancel the viewing and risk this buyer not rescheduling, they figured, “Why not?” and left for an hour.

Before my client left, however, he set the lockbox code to 0-0-0-0.  Maybe he was skeptical that nobody would show up?

But what’s more, is he forgot to lock the front door.

So when he came home with his wife and child, at 10:35pm, to find the door unlocked, and the code still at 0-0-0-0, he was certain the agent never showed up.

And the agent never cancelled either.

I think we’ve all been in this position before, haven’t we?

For whatever reason, you’re no longer going to show a property.  House or condo, expensive or cheap, night or day, it doesn’t matter – you still call the agent or the brokerage and cancel.

In fact, one of the fines that Tim Hudak and the folks at the Ontario Real Estate Association have recommended be increased is for agents who fail to show up for scheduled viewings, and do not cancel them.

While a case of “right and wrong” shoudln’t have a grey area, I think if this was 1:00pm and the unit was described as “vacant” on the listing, failing to cancel wouldn’t be viewed in the same light.  But many of you would argue, and you would be correct, that it doesn’t matter.  The rule is the rule.

In this case, I felt sick to my stomach.

The audacity of that agent.

I looked him up, and according to my third-party program that tracks the transactions of all registered agents in the GTA, this agent has never sold a property.

Maybe he’s brand-new, or maybe he’s a bum.  Either way, I emailed him to ask what happened.

He did email back, so there’s something.  Many agents, for many email inquiries, don’t ever respond.

But he gave me a hollow excuse and then I caught him in a lie when he said that he called my brokerage, but it was 9pm, and my brokerage was already closed.

Except that my brokerage has a 24-hour call centre, so that would never happen.

I wrote him back, which is something I rarely do.  I don’t take the bait.  I don’t fling mud.  I don’t have the last word.  I never do this, but in this particular case, I decided I wanted to see this through.

I told him that I didn’t accept his canned attempt at an “I’m sorry you’re upset, but not apologizing” type apology, and that my clients had a small child, left for an hour, and that I was tired of agents acting this way.  I told him that he should have called the brokerage, or called me, since my number was on the listing, and that I knew he was a young, newer agent in the business, and he should really give some thought to what he did.

Amazingly, he wrote back, said he didn’t want to hear me “lecture him like I was his parent,” and told me off.

Folks, I’m getting old.

I never thought I’d say this, but honestly – “kids today.”

What the hell?

Is this the future of real estate?  Are these the young “go-getters” that we’re licensing?

I’ve said it before, and I’ll say it again – so many people out there today refuse to take responsibility for their actions, and this is a trend I’m seeing among new agents.  Honestly, I’ve only been in this business for 15 years; it’s not an eternity, but it’s enough to know just how spoiled rotten some of these damn kids coming into the business are.

So my clients will be filing a RECO complaint, and I will be supporting them.

No diggity?

Last, but not least, threre’s a fun read by a Toronto Star columnist about the “east side vs. west side” debate in Toronto.

I’ve had people on my blog suggest I have an “east side bias” before, which I find ironic, since I sell more properties west of Yonge than east of Yonge.

do often use E01, E02, and E03 as a “go to” area for real estate analysis, but that’s more because it’s such a defined area with a ton of activity.

Here’s the article from Sunday’s Toronto Star:

“In The East Vs. West Toronto In Debate, West Wins The Snob Contest Hands Down”

Tell me: is she right?  Is the west snobbier?

Living down in the St. Lawrence Market area, I always felt like the east side of downtown was calmer, quieter, and just more “low-key.”  King East was not King West, that’s for sure.

But if you’re comparing Riverdale to Bloor West Village, what’s the major difference?

They both have great schools, are great family areas with solid senses of community, they both have the Bloor/Danforth shopping and retail strips, and both are on subway lines.  Both have fantastic schools, and ample parks.

So is one snobbier than the other?  Are they different in any way?

I’d love to know what you think.

Also, let me know if you got my really, really random “no diggity” reference.

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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11 Comments

  1. A Grant

    at 6:32 am

    re: lock removal

    It’s not your level of trustworthiness. The fact of the matter is no one wants to get involved.

    As someone who rides his bike everywhere, I am only too aware that even the strongest lock will buy me 2-3 minutes max. I just have to hope that if a thief does try to cut my lock, someone will intervene.

    1. Dave

      at 11:22 am

      A strong lock will also encourage the thief to look at the almost-as-nice bike with the cable lock that will be snipped in 2 seconds.

      1. A Grant

        at 12:05 pm

        Yes. I know. My comment was directed more towards David’s surprised reaction that no one stopped him from cutting off a lock box with a pair of bolt cutters. There are videos throughout YouTube that show thieves using bolt cutters and angle grinders to steal bikes in broad daylight without anyone batting an eye…

  2. Jay

    at 10:39 am

    East is the hidden secret that the general population do not know about unless you live there.
    I find the West generally younger thus requiring the need to validate themselves by posting higher reviews of restaurants, stores, etc.

    East, being more mature don’t need to tell the world – they just know it is better.

  3. Kyle

    at 10:57 am

    I think the E v W debate is becoming less and less relevant over time and more and more played out. Toronto’s matured to the point, where there aren’t really any bad neighbourhoods anymore. I think each of Toronto’s neighbourhoods has its own feel, especially in the core. It really is just about finding the one that suits you. I’ve lived on both East and the West sides of the City, and i can think of many neighbourhoods on either side of Yonge that i’d be perfectly happy living in.

    1. Geoffrey

      at 8:48 am

      There are definitely some bad neighbourhoods. Flemingdon park, Malvern, Oakwood are not the parts of town I’d feel comfortable in after 9pm. (I know, call me names, blah blah blah but it’s true). PS West side is definitely snobbier. Compare Danforth to Bloorwest village and compare the number of hipster joints. It’ll be 5:1 in favour of BWV.

  4. JG

    at 11:30 am

    “No Diggity, No Doubt!”
    West Side all the way!!
    But that’s just my bias as I was born and raised in the West. I had quite a few friends in the East side, and they equally claimed East was best!
    So I guess it really just comes down to what side you grew up on.
    But I find it funny, as we are all humans, and humans are a creature of habit – we instinctively stick to what we know. Born in the West, stay in the west. And vice-versa.

  5. Housing Bear

    at 6:49 pm

    BOC can cut rates but mortgage rates can still move higher. This is happening in Australia right now. Increased risk, increased rates. Also, the reason CBs are backing off is because global growth is looking a lot worse. Not necessarily bullish for housing.

    That being said, I am becoming more convinced that Poloz is willing to sacrifice the purchasing power of our currency to ease the debt overhang. Consequences will be everything else households buy will get more expensive instead of their debt payments. Squeeze still happens…. if it’s not done careful inflation could spike which will force them to raise rates……… I think that’s why groups like the CMHC are still adamant about keeping b20 in place

  6. فیلم

    at 9:53 pm

    tanks

  7. Peggy

    at 9:35 am

    East versus West. I spent and equal amount of time in both areas, It all depends on what’s important and what stage of your life you are at. In my opinion, East end is more family friendly, lower density, more sunny, quieter. On the other hand, the west end is definitely more alive. At this stage in my life, I prefer the East end. When I was younger I would have been horrified at the prospect of moving to this end of town.

Pick5 is a weekly series comparing and analyzing five residential properties based on price, style, location, and neighbourhood.

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