Walk Score and the Value of Your Home: It Makes a Difference!

Walking is good for us. We all know that. We're been told over and over to get off the couch and go for a brisk, healthy walk.  It keeps the blood flowing, reduced stress and it if you have a dog, that dog would be thrilled with more walkies. BUT here's some thing you may not have known: Walking is good for the value of your home.

Huh?  I know. Sounds pretty nuts, but there are some convincing theories gaining in popularity around some thing called a walk score. So far, this research have been done mostly in the States. It suggests that there is a direct relationship between the value of a given property and if the people who live in these homes are able to walk to where they want to go. So, if you live in a neighbhourhood where locals walk to the park, the schools, the coffee shops, and nearby restaurants or transit routes, then you are more likely to own a property that will increase in value or hold its value in a down market compared to other homes with lower walk scores. Not only that, but you will likely live in a neighbourhood with a lower crime rate. With more human traffic around, there seems to be less criminals willing to commit crimes. In many cities, like Toronto, you can find out your walk score. All you need to do is go to www.walkscore.com and type in your address. Then you can find out just how well your home, or maybe the home you would like to purchase some day, stacks up against other homes. You'll find out just how walkable your property is, and in turn, get a sense of its value. 

In some ways, there's not much new here.  Suburbs score less in walkability and therefore increase less in value. And historically, prices generally seem to reflect this. This is why many new urban planner are trying to build new communities that are real communities, where people can walk to their local stores, and get to know each other a little better. 

As suspected, the cities with the highest walkability scores - New York and San Francisco - are the two most expensive cities in the U.S. to buy property.

In Toronto, if you live in a place like Leslieville, West Bend or any other neighbhourhood that is emerging in the city, you will likely live in a place where the walk score will improve over time. And in turn, up goes the value of your house. 

As a real estate salesperson, I drive every where. So, I'm not here to say you should personally walk to where you need to go. But you should take note: If you could walk to where you need to go or if your neigbhours are walking, it can have a some bearing on where you buy your next place or how much your current home is worth. 

What the Improving American Housing Market Could Mean for Canada

I don' think it's official yet. BUT it looks like the American housing market may have stopped hemorrhaging. How do I know? Well, I don't know for sure, but in some of the worst hit areas in the States, there has been a turnaround with prices in places like long-suffering Florida and sucker-punched Arizona. We know it's not the same all over the U.S. The sunniest states, with the most secondary properties, were hit the hardest whereas places like New York City remain a pricey place to live.  

Wherever they live, most Americans are good and ready for any sign that their real estate market may be improving. There has been roughly 9 million Americans who have defaulted on their mortgages. Properties in some locations are now worth less than half of what they were at the peak of the housing market. So we all know how the Yanks have suffered.  

But it's not just about stats on the States. I just returned from a trip to Europe, where the Americans I met while I was there, were downright giddy about their real estate market. I have not seen giddy Americans in a long time. I don't think they had any illusions that things will become robust and return to the heights they were at in 2006 and 2007 any time soon. After all, the banks still have quite a bit of foreclosed homes in their possession and unemployment in the U.S. is stubbornly high. Still, it's nice to see some warm and fuzzy feelings about real estate for our southern friends. 

As Canadians, who have not suffered like Americans, you might think it really doesn't matter what happens down there -whether the news is good or bad. You may believe that our housing markets and mortgage rules are so different that Canadian and American real estate really don't effect one another. After all, our housing market didn't take a nosedive when theirs did. So, what effect does an improving American housing market have on Canadians and their housing market? The truth is, quite a bit. 

We Canadians are buying up a lot of the property in those sunny American states. And who can blame us? Our strong dollar makes American homes much more affordable and prices are at an all time low. So, we invest there and not here on vacation homes. We are some of the foreign buyers who are gobbling up U.S properties and helping their housing market recover while not overheating our own vacation property market. 

But we are not the only ones. Other nations from Europe, Asia and the Middle East are now also looking to the the U.S. to buy property. There is a feeling that things are stabilizing there and ready to appreciate. So foreign investors who have invested heavily in Canada over the past 4 years, because we had one of the few stable housing markets in the world, are now looking to the Americans for deals. 

Is that such a bad thing for Canada? I would say no. Quite the opposite. There has been some concern that there is too much foreign investment in Canada in the past 4 or 5 years. Canada does not keep track of foreign investment in the housing market at the moment. They should. But they don't. The worry is that if there is too much foreign investment in one city or country, then if some thing goes wrong, those investors will pull out all at once and cause the housing market to become unstable. So, the fact that more foreign investors are considering the States means that there could be fewer in Canada. So, in turn, the worry of foreign investment overwhelming the Canadian housing market becomes less of a concern. 

Now, if you don't really buy any thing I'm saying here, fair enough.  These are not all foregone conclusions. These are just a few educated ( or maybe whimsical) predictions. But I can see the early buds of an American recover that I think will help to keep our our own housing market healthy and steady. 

 

To Rent or Not to Rent - Is That the Question?

To rent or not to rent? No, it's not Hamlet, but that is the question for many people. For some renters, they haven't saved up enough money to buy some thing just yet, or they simply prefer a lifestyle where the flexibility of renting feels like a better fit. Sure, you don't build equity, but you have less responsibility. Then there are those renters who follow the sales of real estate market more closely than most homeowners. They are waiting for that magical moment they believe will come, any day now, where the market tanks. Then they can rush in, snap up the deals, and laugh at all those foolish buyers who bought at the peak. Mwaaa ha ha ha! Some of these renters have been waiting for the past 20 years when a pleasant home in Toronto could be bought for a couple of nickels. Well, maybe not that cheap, but you get the idea.

Believe it or not, though, this latest blog really isn't about whether renters should buy or rent. I'm a real estate salesperson. So,  I am admittedly biased on the subject. But I do think so much attention has been given to the buying side of things and the cost of buying a home, that the residential rental market and how it works has been largely ignored. Too often, renting is considered a safe practice while you wait to buy. But here are a few things that you may want to consider when renting in Toronto:

1. SHIFTING STANDARDS: The standard for rentals are shifting. Most of Toronto's rental stock is old. We don't build very many new residential rental properties any longer. Most new rental properties are individual condo owners who rent out their unit. So, the desire for nice things like granite counter tops and front load washers and dryers have increased.  In turn, those crustier, older rentals are more and more in a rush to upgrade their facilities and throw around a little fairy dust to pretty up the lobby. Renters want nicer places with stainless steel appliances and a tub that is not 40 years old. Of course if enough renovations and upgrades take place, there usually is a big increase in the rental price as well, if the renos happen between tenants.

2.  GOVERNMENT INTERVENTION. Because the new rules from the federal government makes it more difficult to qualify for a mortgage, there are fewer first time buyers and more people staying in the rental pool longer. And this adds more renters to the the rental pool in Toronto. So, more renters means a tighter rental market and a tougher time finding a place. To be honest, I'm not sure if this government intervention has that much influence, but even the rising prices of buying property have left some renters in the rental market longer than they would like to be in it.

3. RENTS ARE GOING UP TOO. It's not just home prices that are going up. Rent is too. Maybe not quite as fast, but at a pretty healthy clip, as far as I'm concerned.  The vacancy rate is about 1% in most of Toronto. 1% is considered too low. It causes landlord to raise rents and even leads to bidding wars. Yes, I said bidding wars. They are not the sole terrain of real estate purchasers any more. Luckily, there will be a lot of newly built condo units coming to the market in the next two years. So, for your renters who believe you simply won't be able to find a rentable place in Toronto, relax, there is more supply on the way!