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.

07 February 2019 ~ 0 Comments

Why looking for a home right NOW will save you money

Snowstorms, ice storms and even rain, all make for a good time to be a smart buyer and out looking at homes. The problem is, most buyers want to hibernate during bad weather times.

What makes it a good time? January and February tend to be two of the slower months sales activity wise for starters. Yes, there may be fewer choice listings to choose from, but there are also fewer buyers competing, and pushing up the sales price as well.

You also tend to get better motivated sellers. As a seller coming out against less competition on the sale side might be an advantage. But when bad weather hits, and buyers slip into hibernation mode, and fewer showings are happening, maybe that motivation gets a tad higher. Maybe?

We often follow the herd mentality which is why springtime often brings out both a peak of sellers and buyers. But when all it takes is one buyer in competition to pony up a higher price, potential savings are wasted.

Take for instance an actual savings of twenty thousand dollars ($20,000) in a purchase price. With many houses hovering around the million dollar mark ($1,000,000) and if you were using a down payment of 20%, you would actually be saving the equivalent of one (1) years worth of equity pay down by paying a paltry $20k less. The return to you the buyer is huge!

So if purchasing a house or condo is on the horizon for you this year, become a smart buyer and get out there now and buy something. The savings are worth any inconvenience of being out looking at properties in the inclement weather.

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Toronto Mayor Tory NOW ready to tackle city affordable housing

A few days back I came across some tweets that Toronto Mayor John Tory had been retweeting (from his own tweets from December 2018) regarding our city wide affordable housing problems.

Shortly after, the Toronto Real Estate Board backed him in support of the cities ten year housing plan, which if you had asked anyone buying or renting in Toronto, is oh, about maybe ten years too late!

So we have a two-term Mayor, whose been around Toronto city politics for the past fifteen years, and also former Leader of the Ontario Provincial Conservative party, now saying, let’s fast track surplus city land for affordable housing. We need it now!

And then you have largest real estate board in the country, TREB, who have political clout and access to the housing data, agreeing, let’s do this. The time is now. Or at least it is over the next ten years.

I realize that better late than never can be applied here, but it pisses me off that politicians play politics too often, even when there is a real live affordability crisis going on in front of them.

Why act now? Because one-bedroom condo rentals are nearing $2500/month to rent? Why didn’t you act two years, three, four years ago even? Rent was increasing like mad then as well. And you were the Mayor then! And yes Mr. Mayor, I voted for you both times. So I don’t hate you.

Rising rental rates have helped push up the cost of entry level condos, making it impossible for first time buyers to own, and then force them into renting what should have been their rite of passage into their cities housing market.

Instead, rich foreigners and well to-do locals (full disclosure, I was one of them) were able to snap up multiple properties due to restrictions that were brought in and that made it almost next to impossible for the average twenty and early thirty year old, to become a home owner.

Now we have a housing affordability endemic on our hands, and those entrusted to look out for the greater good of us, got drunk behind the good times of condo development, political donations, and all the excesses of money that’s been pocketed from the rise in GTA development.

I’m frustrated, even angry at times, that playing politics at the expense of so many, for the profit and benefit of the few, is something tolerated by us all? It’s even a wonder we shake our heads and look despairingly at close friends thinking, how did such and such become Mayor? Or President?

As a city we need to unite. To ensure that all the people in Toronto are looked out for, and not just the ones deemed politically attractive. Let’s have transparency and a real long term commitment to making sure this great city of ours, is a place our kids can afford to grow up and live in, and not just a place for the wealthy.

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Warm Start to 2019

We all know that the weather in Toronto since the New Year has been pleasantly warm with above seasonal temperatures and then downright freezing!

With a balmy plus 9 degrees on January 8th, to the wind adjusted minus 25 on January 20th, It’s been a month of adjusting wardrobes and dreams of vacations in warm, climates for some.

What hasn’t been cooling off it seems is house prices throughout the city. Removing condos from the equation, and only looking at detached, semi-detached and townhouses, average prices seem to be on the rise.

As of January 25, 2019, sales posted through the Toronto Real Estate Board it looks like prices are up 5% on average when compared to that of last year at the same time.

Metrics such as days on market and sales-to-list price are fairly even except once you get above the $2.3 million dollar point. Average prices are up but when you factor in the highest sale of $11,250.000 which outpaced the next sale by far, this will certainly make the averages look better.

Also in the higher end market there is a big drop in sale-to-list ratio and days on market have almost doubled.

In another two weeks we will get the official report but it looks like 2019 is off to a warm start, and one I wish would apply to warmer temperatures as well!

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What’s going on in Toronto’s rental market?

Well for starters, in many parts of the city over the past two years, the demand for quality rentals has been high. So high in fact, that often you would expect multiple applicants on available units.

The baffling part is that most of the small mom and pop rental housing being provided is through the glass towers in the sky. Yes, those same glass towers that people kept screaming were being overbuilt!

Demand is high, supply is low (obvious from multiple applicants placing offers) which has led to many very happy landlords. But the party may be coming to an end.

Just like trying to purchase a home or condo, affordability is starting to hit the rental market. Yikes!!

According to Urbanation, who are a real estate consultancy whom mainly advise the development industry, we have some financial challenges rearing its head on the rental side.

With an average income of $65,000, today’s renters after taxes, deductions etc is spending on average 58% of their pay. Ouch.

Okay seriously, when do we start to wake the f&*@ up and realize that an entire generation(s), are being royally screwed when it comes to housing?!

I don’t care where you lean politically, but if people cannot afford to buy or rent, in the places they work and play, they will find somewhere else to do so. No wonder those young ladies that solicited two police officers to act as Uber drivers and take them from one bar to another did so. Who can afford a Lyft with the high cost of housing these days?! Read all about it here

With average rents hovering around $2400/month, how does one pay for housing, and with the remaining 42% of their earned income, set aside money for retirement, living expenses, charity donations etc? The simple answer is they can’t.

Maybe it’s time we turn the notion of senior discounting on it’s head? Eliminate some of the subsidies and discounts that apply to anyone above the age 40, and allow anyone aged 22-39 discounts on pretty much everything. Because they need it. And we need them. And trust me, you need them more than you think.

It looks like more supply is about to come to market and curb rental rate growth in 2019. Will it be too late? I for one have seen the first time buyer market almost come to a halt in my real estate practice. Renting is the only option, and one that is increasingly becoming a non guaranteed second option.

Maybe we will start to see downtown tiny condos with multiple roommates like Manhattan has been known for? Or a push back to rental apartment building living on the outskirts of downtown and trendy neighbourhoods? This is assuming our young people stay, and work and play where we need them. Which is right here, in Toronto.

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What should we expect in 2019 for Toronto real estate activity?

Ah, the crispness of winters air jolts you awake, as your feet hits the pavement on your brisk walk to work.

Sub-freezing temperatures combined with the on again/off again sprinkling of snow, have you pulling your toque down tightly over your ears, protecting you from Mother Nature’s bitter cold.

If you profession is aligned to the real estate industry, your thoughts drift off to the countless reports, forecasts, podcasts, webinars and info sessions that have been crossing your path and feeding your brain since November ’18 on what to expect for housing sales in 2019!

Before I dive in and give my two cents on what to expect in the coming year in the Toronto real estate market, let me take you back a bit, to the beginning of the preceding fall market.

In September 2018 I had written that the total number of property sales expected for 2018 throughout the GTA, would come in lower than what some forecasters were predicting at the time . See post here

The fall market was just starting and looking back over the first three quarters of sales activity, signs were clearly showing that a slow down was in place.

I had made mention that this would reflect in the lowest amount of sales activity we had seen in while, actually a long while, the year 2008. Everything the government had been doing of late to ‘cool’ the hot housing market, well, it was working.

Toronto and Vancouver are almost always hot topics on house prices and housing activity. Other markets were equally hot in their own right (Ottawa, Montreal, Calgary) but in Toronto it was clear that the condo market appreciation was puffing up the overall averages into the positive.

So, the surrounding areas and Toronto detached, semi-detached and townhouse values were slightly cooling, to which is being referred to as a soft landing rather than a bursting bubble. Of course, real estate can be national but is locally driven, meaning there are neighbourhoods where prices of the above housing types were increasing, and a few areas, were downright hot.

Some controversy surrounds if the term soft landing, even exists when it comes to housing prices, but that debate is left for another time. Now what does this mean for Toronto and GTA house prices over the coming year you ask?

In my humble opinion, if the government does nothing to interfere with the current rules in place, we’ll continue to see downward pressure on pricing. To what extent, well, nobody really knows? At best it would be an educated guess as the government has proven it will mingle when it feels its needed, even against popular opinion or on the long term affects it might have.

A close eye will be paid by me to the actual housing numbers changing hands, as this is a good indicator to what is happening in a market. People can be out looking at property, and this can look like a positive indicator, but if the activity in sales is low, then a shift could be underway?

I’ve made mention in earlier posts about the ‘depth’ of buyers, especially when it comes to multiple offer situations. A property gets listed for sale with an minimum expectation of $500,000 as the valued price. You have 5 buyers interested, and 4 of the 5 have offers are between $480,000-$500,000 with the 5th offer blowing the rest away with an offer of $550,000, is this the sign of a healthy or strong market? Some would say it is.

I guess for starters you could point out that there were 5 interested buyers, and 4 with reasonably priced offers. But the $550,000 is what gets recorded, and this number can at times be deceptive to what’s really going on. I won’t get started on some pricing practices of agents who list extremely low, just so they can “pad” their stats, but I will say that this method when used as the norm, is not constructive for any of the parties involved. I’ll tackle this topic further in a future post.

I also think long term thinking should always prevail when it comes to buying real estate. Waves come and go, and timing them is tricky at best, even for the worlds most prolific surfers.

Building a home is what most people are after. Somewhere to feel safe and secure. To raise a family, to live and grow in and entertain both family and friends. To benefit from the pride of home ownership and, whatever else they may dream up. When property is looked at purely as a commodity, it can blur even the most seasoned of us.

My hope is that with less sales activity the real estate pros rise to the top, and better eduction and transparency abides, our housing market will remain healthy and strong. That’s what 2019 will look like for me. My wishes are it does for you as well.

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It’s All Rainbows and Puppies

Sales prices are up 3.5% In October 2018. Sales activity up a healthy 6%. Active listings available for sale have dropped 2.7%.

What does this mean?

Well for starters, the real estate market is doing just fine, thank you very much.

That housing crash we’ve all been hearing and talking about, well Bloomberg thinks we’ve avoided it. For now at least. (see Bloomberg article here)

One sign that may support this in the GTA, is that housing sales over the past five months have outstripped new listings. This is good.

The condominium market continues to be very strong as price appreciation led all housing categories at 8.6%. Much stronger gains than we are seeing in the stock market of late.

Actually, all housing types are in the positive, across the entire GTA. The 905 region which had taken a beating early in the year was healthy in all categories.

So it looks like heading into the holidays as my good friend Henry Lee like’s to say,  it’s all rainbows and puppies regarding the housing market. Unless of course you are a renter, as most rental units (condos, houses and town homes) are in very high demand.

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Changes to rent control hopeful in addressing affordability

I don’t know about you, but me, I’m starting to get really confused about what falls under rent control and what doesn’t?

The Ontario government recently released their 2018 Ontario Economic Outlook and Fiscal Review. In it, there were modest attempts to address the shortage of affordable housing.

This government is bringing back exemptions for new rental housing development to encourage developers to build rental buildings and they will not fall under rent control laws. Existing buildings will continue to have rent control. The previous government put in stringent rental regulations which has already had a strong impact on rental affordability in the Toronto region.

Now I’m no fan of rent control and have made that point clear.

Earlier this year I wrote about Toronto becoming a city of renters in the next ten years. (read post here)

Maybe this is good news on the affordability front and our government is being responsible and forward thinking looking to ensure there will be adequate rental options in place to house those in need? Though the skeptic in me thinks not.

Rather, cheap political points are the more likely cause as this seems to be the way politics is played these days. The rules seem to change frequently, or are at least altered, causing confusion in the process.

We don’t have rental housing affordability any more than when we have housing affordability in Toronto.

Gone are the days of the $650/month basement apartment. Enter the $1100/month basement rental and climbing upwards. Basement apartments were the ‘foot-in-the-door’ option for many looking to step out on their own. Independent over the slightly more affordable option of a room in a shared house, the basement apartment was your typical starter rental. I’ve seen many in the $1500-$2000/month range in parts of Toronto. Affordable? Not really.

The government needs to either shit or get off the pot on affordability in the rental housing market. Pick a plan and stick with it. Ex-premier Wynne’s fair housing policy is a joke and actually made it worse for tenants, as many of the starter rental condos  geared towards investors and affordable housing, have gone through the roof since her changes were enacted. It was the hottest real estate market in Toronto until recently. Thanks Kathleen Wynne! said nobody.

Simple plan. No rent control anywhere. Encourage developers to build rental housing and let the economies of supply and demand take place. Maybe have a rental housing department that oversees rental affordability and provide subsidies or rebates to those struggling to afford living within the GTA? Get creative on helping citizens live in neighbourhoods they work and play in and stay clear of regulation that only seems to hamper development.

 

 

16 October 2018 ~ 0 Comments

How sold data will be used is the elephant in the room.

Now that sold data will be available for the public to access in Ontario, when and how should this information be used?

The most likely scenario for its use would entail what I playfully have called, N.N. or the nosy neighbour.

The N.N. takes place when a property is up for sale and a public open house is in process. Your friendly, nice neighbour saunters by and innocently knocks on the door and when answered, responds “is there an open house going on today?” They are coy in revealing their identity but an agent worth their salt will soon get it out of them, and that they actually live two doors down or across the street.

I won’t go into too much detail on this topic (see my previous post N.N. Friend or Foe?) but my point is, many of you have played the role of the N.N. at one point or another. Some of you may even make a weekend hobby out of it like others do geocaching. Whatever. Point being, most home owners are curious about what the neighbours are getting for their home, and what their soon to be neighbours have paid. I don’t see anything wrong in that.

Where I see potential real danger is when individuals may rely on this information alone in either justifying or determining what a piece of property may be currently worth. Red flag number one let’s call it. Thousands of dollars could either be lost or someone else’s gain when misinterpreting the data.

Throw in non-licensed Realtors to the mix –  banks, mortgage agents, lawyers, insurance agents etc…who may want to play “realtor” and give opinions on value without any of them ever stepping inside the subject property, let alone comparable properties. Red flag number two.

Distress sale? Divorce? Estate Sale? “I’m only selling if some sucker pays my way above market value price” person? And yes, they all exist. Red flag number three

You see where I’m going with this. Now, some of you might be thinking… all good points but maybe slightly biased coming from a Realtor who is looking to protect his/her livelihood? Well, you’re entitled to your thoughts. All I’m going to say about that is, for those who know and work with me, they are well versed in my intentions, beliefs and principles I live and work by. For those of you who don’t know me, let’s just say it’s not my focus or concern. I consider your thoughts and insights more as a guest, and I really like guests. I’m truly quite hospitable. But they are not my honoured attendees. That is saved for my past clients, friends and family whom I serve. This is where my focus lies.

Keeping in touch with the values going on in your neighbourhood can be a good thing when it comes time to making a move. Privacy issues aside (new rules will be written as we go along I’m certain), Having access to sold information is a good thing.

While I was thinking about this article I was calculating how many properties have I personally physically been in over my career? I peg that number at approximately 18,000 houses and condos. Sometimes, even the same property that has sold two or three times.

I work both sides of the real estate sales business, the listing of homes and the buyer side. I work multiple pockets and neighbourhoods, as well as price points. This gives me incredible insight into the goings on of what is happening in the real estate market. Yet, I still spend countless time networking and masterminding with top minded agents throughout North America. Yes! North America. We don’t live in a bubble, so I don’t operate like I do.

I also spend the equivalent dollar amount of multiple MBA’s on training, coaching and education. I get asked often by those closest to me (and actually some Realtors who spend the bare minimum or nothing on investing in themselves) why I continue to do so? Humbly, I will tell you that I’ve been in the top percentile of my profession for most of the past twenty years. I’m a very active agent consistently year in and year out.

And my reply often goes like this: I invest so that I can be the best version of myself not only yesterday, but today and god willing, tomorrow also. This is to the benefit of the clients I serve. And then a funny thing happens along the way. You have a very active business year in and year out. Funny how that is. But not really.

So even after 22 years of being a full time estate agent, approximately 18,000 properties viewed, six figures plus invested in training, education, networking and coaching, I need to keep the saw sharp so to speak, to stay on top of values. I actually think the public having access will make my job slightly easier when working with Buyer clients. And in a balanced market, even Seller clients should be more informed.

Having access to information and having wisdom or knowledge on a topic, are very different. No threat here to those who are worried. Finally we can move forward with a more educated consumer and that’s always a good thing.

 

 

 

14 October 2018 ~ 0 Comments

The Nosy Neighbour (N.N.), Friend or Foe?

For anyone who has walked through an open house of a property listed for sale, you may have encountered directly or overheard a conversation between what you thought was a potential buyer for the property and that of the host real estate agent, which in reality turns out to be that of a curious neighbour.

Yes, nosy neighbours exist, and no, it’s not rude of me (and others in my industry) to label them as such.

A lot of time, effort and expense goes in to prepping a property for sale these days. Way more time than the average person can fathom, which is why the N.N. coming through your open house can be bad for business.

Most neighbours are well intended snoops whom keep to themselves, respectfully identify themselves when asked, and walk through the open house satisfying their curiosity on what their neighbours have kept hidden behind the blinds all those years you’ve lived side by side.

But, there can be problems when a chatty neighbour is walking through and asking the host agent questions about the property, that taken out of context, might reflect badly on the eventual selling price of the home.

Comments even innocent in nature such as the amount of prep and work that went into getting the home ready for sale can slant how a prospective buyer views the value of the property. More damaging comments like…”really, they are asking a million dollars for this place? They’ve only been here five years and haven’t done a thing!”

Years ago that happened to me at an open house I was hosting and the neighbour followed it up by stating “well, I really hope they get it (the million dollars). I mean, it’s good for us I guess, but it’s not like we are moving anytime soon. Who could afford anything at these prices!”

Yikes!

There are so many more examples I could share (maybe one day I will write a book or comedy sketch on this topic?) but the N.N. and the damage that can be caused is very real. There are some neighbours who can help sell the home and area, especially those that mention how much the sellers of the home are going to be missed. Nice people and a close sense of community are good for neighbourhood values.

My parting words are this, and ones in which I often coach my buyer clients on when we are out looking at property. When you are entering someone’s home that is up for sale, whether we come in via a public open house, or private showing, please remember we are guests. Let’s treat the home with respect and let’s save any negative comments that may be had for when we are outside and away from the home. If you’ve never had your home up for sale, you truly don’t know how stressful of a process it can be.

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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.