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 September 2018 ~ 0 Comments

Buying or Selling soon? This is a must read.

2018 is on pace to go down as the lowest amount of property sale transactions (annual total) since the recession year of 2008. What does this mean?

Year-to-date we have had a total of 53,634 sales through the Toronto Real Estate Boards MLS system. If the final 4 months of 2018 match the final 4 months of sales of 2017, our yearly total will be 79,241. My prediction is that this total will be lower.

Wow!!

With rising property values and tougher bank regulations on qualifying and lending, these numbers were more or less expected. But I’m not sure anyone expected a rollback to the early 2000’s on sales activity? The changes were put into place to cool the market, and that seems exactly to be what’s happening.

The impact of this will be far reaching. Expect to see less people calling themselves Realtors. Same goes for Mortgage Brokers, Real Estate Lawyers, and pretty much anyone else tied to the housing market.

But what does this mean if you are Buyer?

If you are currently looking you most likely already know, that in many cases, days on market has risen. Excluding the hot pockets throughout the city, Buyer’s are taking a more cautious approach when it comes to offering on properties. The reasons vary but are long overdue in my opinion.

If you are a Seller in this current market or about to be one, a thorough understanding of which pricing strategy to take, and what’s to be expected when selling a property in this current market should be discussed before you start the Buying process on your next home.

Fully understanding what’s happening in the market is crucial. A lot has changed over the past ten years of rising property sales. Chances are you may have purchased your current home during this period? The peak in sales actually happened in mid- 2016, and being on the downward trend in activity it’s important to understand what this can mean to you? Doing so ensures as positive and stress free of a process for all involved.

18 September 2018 ~ 0 Comments

You have to Buy now! Prices are only going to rise.

Let me ask you a question. Do think the values of Toronto condominiums will only rise in the future? I want to keep the question vague for now and only apply it to investment condos, so answer to yourself with a simple Yes or No.

Yes you say?

Well some might say (myself included) that you’ve possibly been bitten by the scarcity bug. You know, the one where developers and well intended friends (albeit often mildly informed on the topic) are convincing anyone who will listen, that now is a great time to buy that investment condo. Prices are only going up you are told, but also that the rental market is super strong so giddy-up, what are you waiting for?

Maybe it will, Maybe it won’t?

Ignoring facts like the one that has been well documented earlier this year, that almost half of all new investment condos purchased are losing the average of $1,000 per month. Does that make buying a new condo now sound like a good deal?Note: You can read the links at the bottom of the page for more information on this.

This is not to say that everyone shouldn’t look at new condos as an investment option. Individuals looking at wealth preservation, those suddenly flush with cash from an inheritance, high income earners, all can still benefit in the current market alongside some small investors even with sky high price per square foot costs. All I’m saying is that not everyone should put their hard earned money at risk, without giving thought to what the costs (purchase) verse income (rental income) will be.

But before I continue and address the No side of the equation, let me get it on the record that I do believe in the long term (10-15 years+), some or most condominiums will be highly valued and sought after in the Toronto region. Not all condos are created equally and if you’ve being paying attention to past blog posts from me you will know why I believe this is.

So that being said let’s tackle the No side of the equation. This is where me keeping the question vague ties in. Above I noted that I believe longer term values will be higher than today’s costs. Hard and soft costs that go into condo development are only going to go up. What can happen when they do is it creates a “pause” in the selling of new projects while the economics catch up. This pause can last a short amount of time or stretch out over years.

If you bought pre construction today for example and in five years time (pretty much the Toronto average for delivery of  pre con condos) you took occupancy, and we happen to be in a “pause”  with the market, you might have some serious issues on your hand. And don’t count on being bailed out with an assignment sale of your unit even if your builder tells you there are okay with it.  Assignment sales are tricky things, and even the most experienced of agents and lawyers don’t love them. Even the Canada Revenue agency has ramped up their attack on assignment sales.

Yes the rental market is extremely hot right now. But will it be the same in five years when you get your new condo?

If you want to get into the condo investment market, and after going through a consultation to determine if it’s the right fit for you, maybe consider an already built unit? The pros are huge:

  • Property can be had for less than what developers are charging (you pay less for more.) win
  • You can buy with confidence knowing what interest rates are like now. win
  • You can capitalize on the current hot rental market rent wise. win
  • You can benefit from a five years head start in having your mortgage paid down. Did you know, with a $400,000 mortgage balance amortized over 25 years with a rate of 3.75%, you would have your mortgage paid down by over $53,000!!! win

I hope you can see my point in that buying something because everyone says it’s a no brainer, or that it will only continue to rise in value, is not entirely true. As with all investments proceed with caution and take the time to educate yourself in advance, and when ready, align yourself with competent professionals.

CIBC: Over 44% of Toronto Condo Investors Don’t Get Enough Rent …
Many Toronto condo investors struggling to cover costs — and it’s going to get worse: Study
Toronto Real Estate’s Harsh New Reality: Buyer Beware

 

 

23 August 2018 ~ 0 Comments

Sold Prices Can Now Be Posted Online

It’s official! The Supreme court of Canada has refused to hear an appeal from TREB (Toronto Real Estate Board) regarding the publishing of sold information on properties. This currently applies only to property sold through TREB’s MLS listing service. But look for it to be rolled out nation wide once the dust settles around how this in practicality will work.

For years TREB has been lobbying against releasing the sold data (and allowing member agents or brokerages to do so as well) under the basis of it being a privacy issue. And to a degree, I can understand their reasoning behind it. Not everyone wants this information public.

The fight was taken up by TREB and where confusion lies, is that all, most or even some Realtors were 100% in support of this. This is not true. Actual individual real estate agents (the common term used for those who do the bulk of the work in the buying and selling of property) actually have very little to NO say in what the Board pursues. Pretty much all we can do is place a vote for what are pretty much “token” positions like Region Directors or the board President. Pretty boring stuff and no disrespect intended to anyone who runs or wins in these roles. But by virtue, they impact very little overall and this is why voter turnout is so dismal, I won’t even publish the turnout numbers. But it’s small.

This is why most likely you will see today and over the next little while, the high majority of Agents shouting from the rooftops that we as Realtors are fine with the posting of sold data. With a few exceptions I would like to see put in place, I’ve always been all for it. I would also like to see other privacy initiatives scrapped as well, but that opinion is for another day.

Today we celebrate that in a world that is moving to being more transparent, TREB members are no longer going to stand out like Unicorns in an evolving world. Very little information has been released as of yet and the official media release to its members is as follows:

The Toronto Real Estate Board respects the Supreme Court of Canada’s decision to not grant leave to hear TREB’s appeal. The Order of the Tribunal will come into effect in 60 days time, unless it is modified. As noted by the Supreme Court of Canada, of the approximately 600 leave applications submitted to the Court each year, only about 80 are granted. The possibility of succeeding in getting an appeal heard is in general remote. The Court’s role is not to correct errors that may have been made in the courts below. Rather it grants leave only where its decision is likely to have an impact on society as a whole. TREB believes personal financial information of home buyers and sellers must continue to be safely used and disclosed in a manner that respects privacy interests and will be studying the required next steps to ensure such information will be protected in compliance with the Tribunal Order once that comes into effect. —John DiMichele, CEO, Toronto Real Estate Board

The part that sums it up in TREB’s release well is: “The Court’s role is not to correct errors that may have been made in the courts below. Rather it grants leave only where its decision is likely to have an impact on society as a whole”

Exactly!  Little impact on society as a whole. Let’s move along and let me get back to doing what I do best. Helping a select group of clients navigate through the complex process of buying and selling real property. Saving in time, convenience and money.

18 July 2018 ~ 0 Comments

Why is the condo market so hot?

Across Toronto if you have been a buyer or investor looking for a condo in 2018, you surely have noticed that the condo market has been on fire.

Multiple offers sometimes hitting double digits in quantity, properties being sold within hours of hitting the market, and even some of the ugly duckling units being snapped up by desperate buyers. (NOTE: you should never resort to desperation when purchasing real estate of any sort!)

What gives? Why is the condo market so frenzied? Well for starters, believe or not, there is actually a fairly low amount of inventory available.

In the second quarter of 2018, condo sales are off about 16% from Q2 2017. New listings are off roughly the same percent though, and existing inventory of condos for sale have increased moderately at 2.5%. Most of this is likely due to the strong price gains in the lower side (entry level and investor condo units) of the market.

The overall picture is pointing to a moderation on the condo side, but only slightly. We are going from a super strong sellers market to a strong sellers market. Slightly noticeable difference. The surge in rental prices has also played into the increase in this price point.

A little surprising is the increase in demand for rental units in the $3000-$6000 range. In these price points you can own a pretty nice tw0-bedroom condo in the city. Yes prices have increased in this segment as well, but are we starting to buy into the ideal of Toronto becoming a city of renters?

It’s too early to say but for now, if you have already been a condo owner and have recently cashed out, you’ve done quite well. Of course those choosing to hold on are fairing just fine, but what the future holds on the price and demand side still remain to be seen. We have a glut of new condo development in the pipeline that will be coming into the market over the next 3-5 years.

What will these mean for condo values as well as rental prices? Of course we will have to wait and see.

18 July 2018 ~ 0 Comments

Some Positive Housing Numbers in June

The Toronto Real Estate Board has released the month of June sales figures and at first glance, it’s pretty positive looking.

Sales prices are up 2% over June 2017, and more importantly up 3.3% over May 2018. New listings tailed off slightly at 18% but overall inventory increased slightly.

Sales activity and average prices were up slightly, inventory of existing properties for sale has increased, and the days on market is up. All this bodes well for a steady market.

Toronto average prices are as follows: detached houses $1,354,429, semi-detached $999,754, townhouse $736,963 and condo $605,503.

On the detached home side, the year started at $1,283,981. That’s about a $70,000 increase on average to where it’s sitting today. Not many people can save $70,000 after taxes and once again it looks like Toronto’s housing market is becoming attainable for select groups.

The condo market has been getting much of the positive attention in 2018 and in January the average price was $543,279. Today you would be paying on average $61,000 more.

The second half of the year looks to be positive on the demand side. If we can maintain a healthy amount of supply, then prices should continue at a modest increase. But if the supply drops, like it has in the past, then expect this year to end up with a stronger second half on average values.

22 June 2018 ~ 0 Comments

Toronto’s East End Continues To Be On Fire!

Would you believe that with all of the talk of a cooling real estate market across the GTA, the average sale-to-list price ratios in Toronto’s East End last month, were above 100%?

Sales-to-list price ratio reflects the asking price of a property, and what it’s sale price is. For example, if a property were listed for $800,000 and sold for $864,000 it’s ratio would be 108%.

Eo3 with boundaries roughly north of the Danforth, Broadview in the east, Victoria Park in the west, and roughly O’connor Avenue to the north, had a ratio of 110%!

E01 was sizzling hot with a ratio 0f 113% (Broadview south of Danforth, to Coxwell down to the lake).

E02’s ratio was a very respectable 105% (Coxwell south of Danforth, to Victoria park down to the lake).

The entire Toronto East average 104%.

Leslieville, the Beach, East York, Danforth Village, Playter Estates. For those who call Toronto’s east end home, you’re well aware of the perks and benefits of being east of the DVP.  Others are awakening to the call and the demand is high to get into the diverse neighbourhoods that surround you.

The rest of Toronto proper is doing pretty good as well.

In Toronto Central and Toronto West, both ratios were a very good 101%.

Some neighbourhoods that are more in demand in all areas will pull the averages higher. But overall, the news is good for Toronto in that demand is strong. Condos are still a major factor in the downtown cores strength, with sales activity declining but average prices rising 6.5%.

Semi-detached and townhouse/attached home prices were flat (which isn’t necessarily a bad thing in the short term), and detached home prices continue to level of and are down 5.6%.

Affordability is the overwhelming factor at play which the numbers above reflect. The Ontario government’s plan last year to cool the housing market by pricing first time buyers out, is working. Without a first time buyer you get limited move-up sellers/buyers as some who can afford it, will hold onto their first time property and turn it into a rental, and then make a more modest move upward.

If you have any questions about your specific neighbourhood let me know?

 

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.