My Agent Mike

Hi! I'm Mike Rapkoski.

Sales Representative, Keller Williams Referred Urban Realty Inc., Brokerage

I have spent the past 18 years assisting clients build their wealth through making wise choices with their real estate buying and selling. I am passionate, dedicated and committed to providing world class service to my real estate clients.

18 May 2018 ~ 0 Comments

The Spring Market is here! Or is it?

Often real estate salespeople are asked, when is the best time to put your home up for sale? Well, Springtime (March thru May, and sometimes June) on the east coast has traditionally been the most active time for sales.

Ideally, there would be busloads of qualified, motivated buyers coming out of winters hibernation anxious to be out looking at houses and condominium apartments. Plenty of happy buyers typically means happy sellers.

Anyone who has been following the real estate market in the GTA (Great Toronto Area) over the past 18 months has known the start of 2017 sales prices started to defy any sense of logic, and prices were escalating fast.

Average sales for detached homes in the 416 area code went from $1,336,640 in January 2017  to $1,573,622 in February 2017.    In the 905 areas it went from $999,102 to $1,106,201. March averages were roughly the same and then in April, two things happened. One, the provincial government announced their “fair” housing initiative (meant to cool off the hot real estate market in the GTA) and the second thing was, Sellers started to flood the market with new listings. The combination of the two killed the party.

Now it’s spring 2018 and the housing market is slowly seeing active listings start to pile up (which is great if you are a first time buyer or move up buyer especially!) Sales prices are healthy, but way off the craziness of what we witnessed in the spring of 2017. Which, for the record is a good thing.

Buyers have been crying for years that there is no supply of houses for them to buy, and that when they do find a home they like, they are competing with dozens of others! Well, now you aren’t. Right now there is a great selection of property throughout the GTA that only a mere 15 months ago, many would have seen multiple offers being placed on them if they were up for sale back then.

Seize this opportunity and get into the market, or take advantage of a market that makes sense to move up in and one of which we haven’t sen the likes of for awhile. It might not last long. Play the long game as that’s what owning a home is meant to be. A place to provide life long memories, shelter, pride of ownership, sense of community and safety and security.

 

 

19 April 2018 ~ 0 Comments

Reminder. You must report the sale of your principal residence on your income tax return

With tax season upon us, if you moved in the calendar year of 2017, you must report your sale on your 2017 tax return. The government refers to this change as an “administrative change” but what it really is, is a pain in the butt and another way for big brother to see if they can squeeze any more tax out of you.

For example, if you write off part of your home for commercial purposes, this could trigger a partial capital gain on the sale. Consult with a professional accountant or tax lawyer to ensure you are on the safe side if you have any doubt. In our government created debt ridden budgets, they are looking into all areas to collect tax where possible, plus penalties. Remember, being uninformed is not a viable excuse in CRA’s eyes!

For more information follow this link to the government of Canada website

13 April 2018 ~ 0 Comments

Buyer Beware. What the heck are the bank’s thinking?

I’m going to cut right to the chase and say that it seems these days, the bank and their appraisers are not your friend.

If you are actively searching for a house or condo and working with a qualified Realtor™ (I’ll leave it up to you as a Buyer to do your due diligence on what ‘qualified’ looks like) then you will most likely know that in many pockets of Toronto, the real estate market is still actively hot.

I, along with a network of experienced and active Realtors™ across the city, continuously network frequently on the goings on “behind the scenes” in our real estate markets. The things we discuss you most likely won’t ever come across in the main stream media (and before you ask, no, I will not share what they are, with the exception of one) but let’s just say that they allow for a competitive advantage to be had on behalf of our clients.

One trend that seems to be surfacing more often than we’ve seen in the past many years, is a difference between the price paid for a property, and what the bank is appraising the value at. And yes, make no mistake,  the appraiser works entirely in the interest of the bank, even when you are the one paying their fee!

As an agent who works with both buyer and seller clients, I will speak from the selling side (list side) and say that, when I provide a value range for a client on what to expect from the sale of their property, it’s always based on what I believe will be a reasonable expectation of that value and one that shouldn’t stand out come appraisal time. Now, the property may sell for more than this range and that’s when I revisit the conversation on sale price verse appraised value (and let’s face it, we ALL would enjoy receiving more money than reasonably expected) and what this may mean come closing time. Personally I don’t believe a bank is responsible for taking on the added risk on what an overly motivated buyer might end up paying.

Where a big part of the problem lies is when the bank does their appraisal. Often it is days before the scheduled close date (some argue this isn’t by accident!) leaving little time to scramble to deal with other options if the paid value doesn’t come through.

On top of this they can use moving parameters and logistics that can make even the most grizzled veteran mortgage broker lose sleep. (Pro tip: Always, always, always use a professional mortgage broker for your borrowing needs and this is not the time to use your cousin who is a full time firefighter and amateur mortgage person).

As a buyer, if you are working alongside a competent professional Realtor™ then you should have a “feel” for what’s right on the price you are paying when you buy. It may take time to get there, or you may have complete trust and faith in the Realtor™ representing you. One of the signs I know that I’ve done a great job when representing a buyer, is when they can confidently feel or say to me, “Mike, we feel we paid a fair price” for the property they just purchased. Educated Buyer. Check!

My hope is that one day the appraisal process will be more transparent along with added protection for buyers (and potentially the seller.) Until then, proceed with optimistic caution and be prepared with a plan B. And if you take my advice on using a competent Realtor™ and mortgage broker (this all applies to the real estate Lawyer you use), you heighten your chances of a smooth process come closing day.

12 March 2018 ~ 1 Comment

In 10 Years Toronto Could Be a City of Renters

I recently attended a housing market forecast on the Toronto Real Estate Market put on by the Welbanks mortgage group in conjunction with Genworth Canada.

Now I typically attend 2-3 of these type of information sessions annually but this was the first where I could recall the statement being said that, “Toronto could become a housing market of renters” in ten years’ time!

My ears perked up, and for a moment I was asking myself, did I hear that correctly?

Yes!! It was correct. Real estate would be so expensive only the rich could buy and most would be renting!

Based on recent comments by two housing economists (Will Dunning and Benjamin Tal) it seems a comment was made along the lines of, “if you think house prices are expensive now, wait and see what it will be like in 5-10 years’ time.”

Now to be fair, I did not hear this quote directly from the source, or, what it’s intended context was. It was repeated by the presenter from Genworth from a presentation she had recently  attended. But the sheer thought of this had my heart palpitating. I mean, already it is incredibly expensive and difficult to purchase and own a property in Toronto. We keep hearing about over leveraged consumers, a housing bubble, a lot of high risk in our housing markets.

And it’s going to get worse?

Well, I’ve heard a lot of over the past 10 years on unstainable housing values that have proven to be untrue. And I also once recall Craig Alexander who was an economist at TD Bank at the time, say, about Toronto’s unexplainable increasing house values…”that even in the story of Little Red Riding Hood. Eventually the Wolf does show up.” This was said in context that “for the past few years he stood before us saying house prices would correct by at least 10% and then he would show up the next year and they were higher.” This would have been about 5-6 years ago.

So it seems no one really knows what will happen? But if this statement holds true about a city of renters, all of the current problems we have experienced over the past many years is about to become a lot worse. For the sake of many, I hope this too turns out to be false.

 

 

17 February 2018 ~ 0 Comments

Really…the real estate market is slowing down?

A few days ago the Toronto Real Estate Board posted it’s January sales numbers and surprise surprise, sales volume was down drastically year over year in comparison to January 2017. This came as no shock to me.

For those who remember last January (and February and March) sales prices were defying logic and it didn’t come back down to earth until April, which then cooled right through late fall in most neighbourhoods.

Also important to note, this January was the second lowest sales activity over the past ten years, only to be bested by the recession sales of 2009.

If you are thinking the housing market has corrected…it hasn’t, well at least not yet. and it doesn’t look to be doing so anytime soon.

Prices for the most part are still rising, which can be confirmed by speaking with any Buyer who has bought over the past 30 days.

With the exception of the uber-expensivce detached home market which saw a small price decline of 3.9%, the rest of the housing types continue to increase in price. Semi-detached homes were 3.7% more expensive, Town Homes 8.2% and the sizzling hot condo market is up 15.1%!!

As the gap narrows between detached home values and the rest of the market don’t be surprised if there’s a turnaround in average prices for detached homes in a few months time. Below are end of January 2018 housing type prices.

  • Detached sales average $1,283,981
  • Semi detached average $936,623
  • Town houses average $712,186
  • Condo average $543,279

Supply is STILL the issue and there are many financially well armed buyers out there snapping up the limited amount of good listings to hit the market. This past week I sold two listings and both deposits were for a minimum of $100,000! These Buyers aren’t messing around!

Will this pace keep up? It’s really become difficult to tell.  Well funded Buyers and those benefiting from being in the market with property to sell are very confident for the time being. But it will be interesting to see what’s next from the government as they’ve pretty much thrown multiple grenades over the past few years which look to be not working (although side note: it is pricing an entire class out of owning real estate in Toronto, which sucks!) much in cooling the demand.

My advice is to proceed with caution while having a trusted (and I emphasize trusted) real estate agent by your side who is dialled into the market who can help guide you through this incredibly tricky market. The downside it too risky, and too expensive to misstep.

 

11 January 2018 ~ 0 Comments

What’s in store for Toronto’s Housing market in 2018

Well for starters, it must be said that we are living through interesting times in that with all of the changes brought into play over the past three years to cool the GTA’s hot housing market, changes which many forecasted would knock the sails out of sales (I couldn’t resist), we are still witnessing an overall strong resale market in Toronto! This can’t be ignored and we should actually take caution in this.

We always have to keep in mind that real estate is uber local with secondary factors that contribute to the overall makeup of Toronto’s diverse housing market. Why is it that condos for instance, in Toronto’s east end neighbourhood such as Leslieville, are selling like hot cakes and for more money per square foot than traditional established condominium neighbourhoods, such as mid town?

Or that a semi-detached home deemed a complete fixer upper in the central neighbourhood of Seaton Village, will sell for a similar price of a brand new detached home in East York? Oh yeah, that semi detached in Seaton Village only has street parking as well.

These are real life examples of how local real estate and their values must be understood and then applied to the neighbourhood you will want to buy, sell or invest in. So here we go with what to expect in 2018.

Throughout Toronto proper, supply of good properties that are well priced for their condition are still in relative short supply. All of the changes over the past few years have been aimed at the demand side – buyers, and the supply side continues to be in short supply. The same can be said and apply to larger sized condominiums (850 sq.ft.+). The demand for both of these will remain strong in the first half of the year, as pent up demand is still in play.

Interest rates have been forecast to rise and if we see rate hikes over the course of the year of 50 to 75 basis points as have been predicted, this could help balance demand even more.

Over the past few years the “selling seasons” throughout the course of the year seem to be shrinking. Remember, this may not be the case in your neighbourhood, but needs to be considered of you are buying and selling in different neighbourhoods. Remember what the second half of 2017 looked like…

Demand for entry level condos will continue to be very strong and this price point coupled with a strong and increasingly expensive rental market will continue put upward pressure on prices. I’ve been saying for at least the past eight years that the first time buyer home is a condo. Well, it’s here, embrace it, and starting building equity so that you can compete when it comes to wanting to move into that semi or detached house that has 10 offers on it. Put the benefits of a rising markets money to use and you will be ahead of the game financially and thankful that you did.

Overall I think a modest drop in overall annual sales volume will happen as the combination of government changes to the housing market, rising interest rates, affordability and buyer fatigue all come together.

Prices will continue to rise in Toronto albeit at rate closer to inflation than the double digit rate growth that has been the norm over the past decade.  As more buyers come back into the market this could push values even higher in the most desirable Toronto neighbourhoods.

 

 

 

08 January 2018 ~ 0 Comments

Brief recap of Toronto’s Real Estate Market in 2017

In brief, 2017 saw an impressive 92,394 sales across the Toronto Real Estate Board which clocks in as the 4th best year ever re: sales volume. Average prices across the board rose as a whole to $822,681 (almost a 13% increase over 2016). Almost all of the growth was seen over the first 4 months of the year. Things to note: in the second half of the year sales volume was the lowest over the past 5 years by a longshot, as well as average prices declined during this time frame. Affordability in the very expensive detached market is declining with sales in the more affordable semi detached and condo market pushed up 11.5% and 14.1% respectively. As the price gap narrows between a detached house and a semi-detached house, and between semi-detached and a condo, this will be an area to keep an eye on in 2018.

05 January 2018 ~ 0 Comments

Two Big Changes Geared Towards Real Estate

The Ontario government recently passed changes to the Ontario Consumers Act which strengthens consumers with regard to large purchases made. Two of the changes have affect on the real estate industry, and are long overdue and more than welcomed in my opinion.

One change is to how “multiple representation” is handled in a real estate transaction. For anyone who has bought or sold real estate in Ontario over the past 20 years, you would know that your chosen real estate agent could represent both the seller and buyer in the same sales transaction, with certain disclosures being needed.

In theory, this can work and keeping in mind that working under rules that govern all of Ontario, some regions this scenario not only works out well, but is actually necessary. But in a city the size of Toronto (and across the GTA), I still don’t think the changes go far enough.

It’s too complex of a topic to cover here completely but why the changes don’t go far enough in my opinion is that there is enough abuse throughout the GTA with multiple representation that it warrants stricter rules and changes. Yes, fines have risen dramatically for offenders convicted (now up to $50,000 for an agent and $100,000 for a brokerage) but getting someone convicted is always the challenge.

The stakes are high and competition is rampant throughout the GTA. It’s still fairly easy to obtain a real estate license and there is little to no accountability from most brokerages. Of course there are many ethical brokers (agents) and I have dealt with many of them. But poll most experienced agents (who’ve been in the industry 12+ years) and almost all I’m sure will tell you this is a huge problem. I don’t see this problem going away based on the recent changes, but only time will tell.

The second change has to do with the Tarion Home Warranty program. Anyone who has been involved with actually dealing with Tarion, knows how frustrating and stupid this organization is in it’s current setup.

The concept is one of value and importance, but it almost seems more like a rubber stamp in the new home buying process, rather than a consumer protection agency. The board of directors is better balanced these days (it used to be heavily made up of developers) but going through the claim process is expensive and the onus still falls mostly onto the consumer, who pays a very large fee for the insurance in the beginning.

Better transparency and consumer protection is better for all of us, especially those of us who work in relation to the real estate industry. Let’s hope 2018 brings better coverage for all.

14 November 2017 ~ 0 Comments

Market Update: Good, Bad and some Ugly

With annual average price gains up 8.25% in October 2017 over the same month last year, the 416 area of Toronto continues to be on fire with healthy increases in value. But if we dig down and take a closer look into the numbers, a different story starts to appear.

Detached values are actually off a very nominal -1.1% year over year. Semi-detached prices are up a healthy 5.2%, Townhouses are up 8% and the condo market in Toronto is on fire, up a whopping 20.9% year-over-year!

Number of Sales are down about -21%, new listings are up almost 12%, active listings are up 78.5% and the days on market has increased upwards of about 38%. These statistics take into account the entire TREB coverage area (416+905) and there certainly is a bigger slowdown happening in most of the 905 area which skews the 416 a bit.

For the first time since I can recall, monthly transactions of resale condo units out totalled those of detached, semi-detached houses and townhouses, combined!

Total sales are down, inventory is up and days on market have increased, albeit with more condo sales this could add to the total as many condos take more time to firm up a sale. But this is a more accurate reflection of the overall market pulse.

The market is more balanced (Buyers, this is what you’ve been whining about for years, where are you?!) and in some neighbourhoods and streets, demand still trumps supply. This means that multiple offers for some are still extremely commonplace. But for most, plan your strategy on both the sale side and the buy side carefully, because the times are a changing.

I still think we have a supply issue more pronounced than the demand side. The Federal government has increased their target for immigrants from 2017’s 300,000 and we all know that a strong majority end up in Vancouver and the GTA. These people need places to live. As long as the supply isn’t adequately addressed, then it will continue to put pressure on rising values and rental rates in the housing market.

Conflicting information it seems and I should add that some analysts think the drop in activity (down 19,000 YTD) from last years record pace is mostly due to caution around the numerous government changes of late. Could be? But it’s crucial to know what is going on when you are in the market to buy or sell.

18 October 2017 ~ 0 Comments

OSFI Unveils New Stress-Test Rules

The much talked about “Stress-Test” rules talked about over the summer by OSFI have been made official, and will take effect January 1st, 2018.

Many suspect this will have an almost immediate impact in the Toronto housing market which Government’s of all levels have been trying to cool with limited effect on fast increasing house prices.

In case you aren’t interested in reading this entire blog, I would suggest anybody even considering buying a piece of real estate (and this includes new construction condos as well) to immediately reach out to a mortgage broker and get your application and pre approval done NOW, to help protect against the changes to come.

So, what are the changes and what impact will they have?

The main change will be the setting of a new minimum qualifying rate, or “stress test,” for borrowers making a down payment of more than 20% of the home’s value. In the past, stress test requirements only applied to insured mortgages (those with down payments of less than 20%,) most variable mortgages and mortgages with terms less than five years.

Is it needed. In a nutshell I would say yes, it is. Brining financial stability to the housing market is a good thing for almost everyone. Is it overkill with what’s happening in the housing market in Toronto of late where interest rate increases over the past 6 month’s, and rumours of another on its way, have already helped play into a slowing of the market alongside other government implemented changes?

This is the part we will have to wait and see. None of the changes we are seeing of late address the supply side of our housing crisis. It seems only the demand side is consistently been targeted. Our city and our country continues to grow, the multiple levels of government through legislation such as the Greenbelt Protection Act and other municipal restrictions on development, are curbing the ease to build.

This is why areas such as Hamilton, Guelph, St Catherines and Kitchener/Waterloo have been booming on housing as many buyers are being pushed out due to affordability. In many of these regions housing is now considered unaffordable as well!

You have government who are opening the doors aggressively through immigration and refugee to bolster our ranks in numbers, also restricting the volume of housing to meet the demand of a rapidly growing population, also implementing aggressive rules on rental restrictions. Draw your own conclusions but much of this doesn’t seem to add up?

Reach out to me if you have any questions on how this might impact you on a personal level, I’m always happy to be of help!