2013-06-18T22:35:32-04:00 Brennan Aguanno and Anna Kemp http://www.huffingtonpost.ca/author/index.php?author=brennan-aguanno-and-anna-kemp Copyright 2008, HuffingtonPost.com, Inc. HuffingtonPost Blogger Feed for Brennan Aguanno and Anna Kemp Good old fashioned elbow grease. tag:www.huffingtonpost.com,2013:/theblog//3.3184817 2013-04-30T17:00:17-04:00 2013-04-30T17:30:39-04:00

Brennan Aguanno and Anna Kemp http://www.huffingtonpost.com/brennan-aguanno-and-anna-kemp/
Despite the best intentions of our provincial government to provide a balanced and equal public education system to all, regardless of one's household income or neighbourhood, vast differences in student performance exist. Not surprisingly, and for numerous reasons beyond the scope of this article, neighbourhoods with the highest student achievement levels are also our most expensive neighbourhoods.

The two graphics below illustrate this quite clearly. The top image shows student achievement levels in EQAO math tests, with the darker colours representing higher achievement levels.

The bottom image show housing prices, again with the darker colours representing higher assessments. Notice any similarities between the two maps?

Now as I mentioned earlier, there are myriad reasons why Toronto's wealthiest neighbourhoods perform better on standardized tests, such as English being more commonly the first language spoken in the home and families having more money to spend on enrichment activities, healthy food, tutors, and so on. One thing however is apparent, if you're basing your decision on where to buy your family home on what neighbourhoods do well on standardized testing, it's almost certainly going to cost you.




]]> tag:www.huffingtonpost.com,2013:/theblog//3.2948596 2013-03-25T12:02:35-04:00 2013-05-25T05:12:01-04:00

Brennan Aguanno and Anna Kemp http://www.huffingtonpost.com/brennan-aguanno-and-anna-kemp/
We constantly hear headlines proclaiming the 'Toronto Housing Market' is this or that, but in fact, each neighbourhood within the city has its own housing market, as unique as its culture. And like the vast differences of cultures, the differences in housing markets, or more particularly, the cost of housing is very broad. While $500,000 may buy you a grand four bedroom detached home in one corner of the city, that same $500,000 would barely get you a tiny one bedroom condo in another.

Understanding the many factors that shape housing prices in each of these markets, as well as knowing where prices are trending, is an important part of a successful home purchase.

This past month I was fortunate enough to represent clients in two diametrically opposed Toronto neighbourhoods. One in Yorkville, a chic playground for the rich and famous, and the other in Crescent Town, possibly Toronto's poorest neighbourhood. If you've ever wondered just how much location can affect cost, take a look at this comparison table. Can you tell which one is the Yorkville condo?



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Brennan Aguanno and Anna Kemp http://www.huffingtonpost.com/brennan-aguanno-and-anna-kemp/
Recently, for instance, the Toronto Real Estate Board blamed the drop in September home sales on the fact that this September had fewer working days than most. I can't help but ask myself why the heck I've been working so many weekends, if those sales don't even count!

The Canadian Real Estate Association is, in fact, no better. A recent headline of theirs proclaims 'Home sales up 2.5 per cent from August to September.' Kind of gives you the impression that things are moving in a positive direction, doesn't it? The only problem is that September, the official kick-off month to the busy fall market, is usually up much more than 2.5 per cent compared to August, which is consistently amongst the slowest months in the Canadian real estate market, as that's when so many of us take our vacations.

In light of all of the nonsense out there, when it comes to real estate maybe it's best to stick to the acronym KISS, which most of us know stands for Keep It Simple, Stupid! In the spirit of KISS, I've included two very basic graphs below, but as you'll see, sometimes not even the simplest of graphs is as straightforward as it appears.

The first graph, for instance, is a popular one that I got off of the Toronto Real Estate Board's web site. It shows the average prices of Toronto homes from January 1995 to the present, and paints a picture that real estate prices, with a few minor exceptions, just keep going up and up. It seems that it couldn't possibly be any more clear or obvious, and for those reasons has contributed to countless first-time buyers coming to the decision that if they want to make money, then all they need to do is buy a property. After all, according to the graph, regardless of when you buy property prices will certainly rise in the coming years. Well yes, I suppose that's true, as long as you don't consider inflation or a more reasonable time-line.

The second graph, the one which I prefer, was produced by the Canadian Real Estate Association. Not only does it span all the way back to 1980, it includes an adjustment for inflation. After all, if your home's price doubles but your money is worth half as much as it used to be, has your home really gained any value? This graph also illustrates that home values do not, in fact, always go up. People who bought properties in late 1981 had to wait all the way until 1993 to be able to sell it for the same value they bought at and even then they only had a short window to do so until prices dropped again. Buyers making decisions based on this graph would certainly be less convinced that now is a great time to buy.

Maybe keeping it simple is not so simple after all.


Graph #1 - via the Toronto Real Estate Board



Graph #2 - via the Canadian Real Estate Association]]> tag:www.huffingtonpost.com,2012:/theblog//3.1799147 2012-08-21T08:42:15-04:00 2012-10-21T05:12:12-04:00

Brennan Aguanno and Anna Kemp http://www.huffingtonpost.com/brennan-aguanno-and-anna-kemp/ The Atlantic entitled "The 11 Ways That Consumers Are Hopeless at Math" discusses how businesses use fact and psychology to persuade us into purchases we ordinarily wouldn't have made. For example, slow sales of a $279 bread maker at Williams-Sonoma doubled when they placed $429 model beside it. The theory being that once the more expensive machine was placed beside the original, the original appeared to be a bargain.

Though the article deals primarily with in-store sales, as I read through the list, I couldn't help but notice how many points also related to the real estate world. When you're thinking of buying or selling a property, consider the following:

1. The 99 Cents Gimmick

Retailers have learned that putting prices on items that end with nine, such as $4.99, communicates to consumers that the item is discounted and or cheap. Though we all know $4.99 is essentially no different than $5, the perception of these two numbers by the consumer is very different. The same is true of pricing homes. At the time I wrote this article, there were 42 homes listed in Toronto for sale at exactly $499,900, but only two at $500,000. When trying to buy a property, versus sell one, you want to do the opposite and avoid the use of 9s. I always chuckle when I get on offer for a home that ends in a 9, like $699,999, as if that would be more appealing to my buyer than $700,000.

2. It's All Relative

We are heavily influenced by the first number. If we walk into a store and notice a pair of shoes priced at $2,000, the next pair, a similar shoe priced at $200 will seem like a deal. These same $200 shoes next to a $50 pair will seem like a rip-off. I see a similar phenomenon in real estate all the time, particularly with condos. Often, I'll see an overpriced condo sit on the market for weeks, until all of a sudden a similar, yet more overpriced unit hits the market. As soon as that happens, the first one all of a sudden seems a good deal and more often than not quickly gets sold.

3. You Often Want What You Can't Have

This third point is not actually related to math, but it's certainly a popular way in which stores persuade consumers into wanting something and is even more evident in the world of real estate. It's the old adage that people want what others have. If there's one thing I've learned about human behaviour in this business, it's that people also want what others 'want' and don't want something if no one else seems to want it. This has a lot to with why bidding wars get so out of hand. It's also why it's so important to not allow a property to sit on the market very long. Once people start thinking that no one wants a house, the house inevitably becomes unwanted.

The lesson to be learned here is to keep emotions out of your decision to buy or a sell a home. Consider the price in relation to what all other comparable homes have been selling for, not just the most recent. Don't assume that there's necessarily something wrong with a house that's been on the market for more than a few weeks. That's often where I find the greatest opportunities to get a deal.

Finally, have a concrete game plan whenever you're involved in a bidding war. Know what is the maximum amount you're willing to pay for the home and walk away if the price moves above it. It may seem to you like the perfect home at that moment, and that you'll regret not buying it for the rest of your life, but I promise you, another 'perfect' home will turn up soon. They always do.]]> tag:www.huffingtonpost.com,2012:/theblog//3.1698108 2012-08-09T11:58:32-04:00 2012-10-09T05:12:04-04:00

Brennan Aguanno and Anna Kemp http://www.huffingtonpost.com/brennan-aguanno-and-anna-kemp/ shortage of debate about the Toronto condo market lately, so let's take a break from the usual disagreements, such as whether there's a bubble that's about to burst or just exactly how many of these condos are being purchased by foreign investors.

Instead, I'd like to discuss something a little more black and white, or I suppose in this case, completely black and white, let's take a look at the subject of floor plans. After all, the easiest way to ensure you make a good investment when buying a condo is to ensure you've chosen a great floor plan.

Recently I toured the sales office of a new condo development, 88 Scott, just before it opened its doors to the public. It's a great new project nestled between the Financial District and the St. Lawrence Market neighbourhood and boasts a greater variety of suites than I have seen in some time. Insiders know that being amongst the first to purchase a unit in a pre-construction development isn't so much about the lower prices, as it is about getting first pick of the best layouts. But what exactly should one be looking for when choosing a floor plan? To help answer that, I've selected three plans from 88 Scott, each with a different feature you may want to avoid. Can you spot the potential issue with each of these?

Floor Plan A: Though for many reasons this is a great layout, you'll notice the two bedrooms are side-by-side and share a long thin wall. If you're looking for privacy, you may want to consider a layout where the bedrooms are at opposite ends of the unit.

Floor Plan B: This layout is a good example of a "split-plan," where the bedrooms are not joined. The drawback of this floor plan is that a fair bit of space is lost in the long hallway. But 88 Scott does a good job at avoiding this type of issue, but I've seen cases where as much as 200 square feet of a condo is wasted on hallway.

Floor Plan C: The problem with this layout is the lack of natural light, not to mention the lack of a balcony. The combination of facing North and having only two small windows (not wall to wall windows) would leave much of this space in the dark.

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Brennan Aguanno and Anna Kemp http://www.huffingtonpost.com/brennan-aguanno-and-anna-kemp/
Buying a property in a neighbourhood that is in the early stages of such a process is generally considered one of the best ways to build equity in terms of real estate investments. Clients of mine who purchased homes a decade ago in neighbourhoods that have undergone tremendous gentrification, such as Leslieville, have benefitted from extraordinary gains in value. The media is constantly running stories about Toronto's next hot neighbourhoods, knowing a large and eager audience is searching for future opportunities to reap the rewards of gentrification. The concept has become so ingrained in us that buyers often believe it's safe to assume that any dilapidated part of the city will eventually become gentrified, so long as you're willing to wait. Unfortunately, they couldn't be farther from the truth. The sad reality is that most neighbourhoods in this city are actually in decline.

The Toronto Star recently re-ran a graphic illustrating the changes of social classes throughout the city over a 35 year span. The key point and title of the graphic is the shrinking middle class, but the maps help us understand gentrification as well. If gentrification is defined as "the influx of middle-class or affluent people" into poorer and deteriorating areas, then this graphic should quite clearly indicate which areas have become gentrified over the last 35 years, as it in fact does.

Using the example again of Leslieville, you can see that is has gone from being predominantly low income to mostly middle income. King West, another neighbourhood that has become famous for the gentrification it has experienced, went from very low income all the way to very high income. Investors who bought land in that part of the city during '70s have literally made fortunes. In fact, the maps do quite accurately illustrate neighbourhoods that have been gentrified, but what's more startling is the number of neighbourhoods where quite the opposite has taken place.

Neighbourhood decay, the opposite of gentrification, where middle-class and affluent people migrate from a neighbourhood, is actually the most common process seen in Toronto over the last 35 years. Even pockets of the city such as Parkdale, which is often marketed as being on the cusp of gentrification (as it has been since I can remember), has actually moved in the opposite direction.

As the middle class continues to shrink, being replaced for the most part by low income earners, neighbourhoods that actually experience gentrification will become fewer and fewer. So if you're planning on buying a home in a more affordable part of the city in hopes that it will eventually become gentrified, be sure to do your homework.



The graphics have been borrowed from a report called "The Three Cities of Toronto," by J. David Hulchanski at the University Of Toronto.]]> tag:www.huffingtonpost.com,2011:/theblog//3.1126700 2011-12-07T15:36:39-05:00 2012-02-06T05:12:02-05:00

Brennan Aguanno and Anna Kemp http://www.huffingtonpost.com/brennan-aguanno-and-anna-kemp/
Today Toronto leads all cities in North America with 132 high-rise buildings currently under construction. To put that in perspective, Mexico city is a distant second with 88, New York captures third place with 86, and Chicago is a very distant fourth with just 17. The vast majority of those buildings in Toronto are condos and that doesn't count the hundreds of condo buildings already built. If you're like me and own a unit downtown, you can't help but be a little nervous about where all of this is heading. It's the luxury condo market, however, where nerves are really getting frayed.

Though the condo boom has been going on in this city for a decade, the luxury condo market is just now coming into its own. This year has been like nothing ever seen before in Toronto, with the "big four" all either just completed or very near completion. I'm referring to the Ritz Carlton, Shangri-La, Four Seasons, and Trump Tower. It's one thing to imagine buyers for all the $300,000 units at City Place, but it's another to imagine enough people able and willing to pay for all of these luxury units and sales are starting to back that up.

According to Truecondos.com, since the Ritz Carlton was registered on the MLS in the summer, there have been five sales. The first three to sell, all during the summer, averaged about $914/sq. ft. The fourth unit, which didn't sell until September, dropped to $865/ sq ft. More recently, just last week in fact, the fifth unit sold for just $728/sq. ft. That is a remarkable figure, considering the developer was marketing these units at over $1,200/sq. ft. during construction.

No one knows for sure where prices are going in the future, but one thing is certain, Toronto's skyline will be continuing to change for years to come. The recent announcement of a 70-plus story condo at 10 York St. is proof of that.

"I think 100 storeys is completely doable in Toronto; that's sort of the next generation of height," said Rudy Wallman, whose firm Wallman Architects designed the development.

So considering how fast the skyline is changing and growing, I can imagine my daughter Zoey amazing her grandchildren with stories of how the CN Tower used to be the tallest building in the city. And then it will be their turn to be open-mouthed in disbelief!
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