As I write this, we are quickly approaching the end of the summer! I've had the opportunity to speak with many of you over the past few months, bringing good news for most and not so good news for a few. A couple of weeks ago I sent many of my listing clients a written market update which I've also copied below as I believe it best summarizes what has been happening in the local real estate industry. For a national perspective, be sure to read the TD Bank's recent forecast regarding Canadian real estate pricing. Please let me know if you have any questions or comments and I will be happy to talk with you in more detail. As always, if you know of anyone looking for complimentary real estate advice, we would be glad to assist!

David Weir BA, CD

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Earlier this year I, along with others, predicted that the second half of 2010 would see a slowing in the local and national real estate markets. It would appear that this prediction is now a reality.

Fearing the extra costs associated with the HST, as well as forecasts of mortgage rate increases and tougher mortgage qualifications, it was inevitable that buyers would get into the game earlier rather than later in 2010. As a result, there are now fewer buyers in the market and consequently there are more homes listed for sale for longer periods of time. Inevitably, this combination of increased supply and reduced demand will cause prices to drop or, at best, to stabilize.

If you don’t need to sell in 2010 but think the prices will be better next year, remember that prices don’t always go up in the short term. For those of us who have seen the ups and downs of the real estate cycle over the years, we know that the next upswing may be more than a year away. For example, when the boom of the late 1980s and early 1990s ended, it took more than 5 years for local real estate prices to come ‘off the bottom’.

There may also be some who believe that the influx of additional personnel to CFB Trenton will force prices up in the short term. However, keep in mind that there are always other variables at work that influence the market and affect the value of your most important investment. These could include mortgage rates, the US economy, a change in government, or another unforeseen factor. Just ask the folks on the coast of Louisiana if they could have predicted the downturn in their real estate prices!

So how much has the market slipped? Here are some national and local statistics.

The Canadian Real Estate Association (CREA), representing 99,000 REALTORS® nationwide, reported that in June 2010 national home sales via the Multiple Listing Service receded 8.2 percent from May 2010. Furthermore, sales activity was down 19.7 percent in June 2010 compared to June 2009. The President of the CREA suggested sellers should consult their REALTOR® on how to price and present their homes in these more challenging times.

The Quinte & District Real Estate Board reported more than a 12 percent drop in residential sales in June 2010 when compared to the same period in 2009. Furthermore, year to date, there are now almost 8 percent more homes on the market than there were in the first 6 months of 2009. Theoretically, you could also argue that the 5 percent drop in the number of local REALTORS® over the last year is another indicator of a turn in the market.

Are you a buyer looking to jump into the market this year? The interest rates are up slightly but the prices are coming down. Now may just be the time to jump!

Due to a previous obligation, for the first time in 13 years Donna and I are unable to host our annual open house this September. Alternatively, and in keeping with our commitment to 'give back', we are offering all our clients, regardless of where you currently reside, the opportunity to also 'give back'.

If you would like us to donate $500 to the registered charity you support, simply send Donna an email telling us the name of your charity and why it is important to you. One entry will be selected by impartial judging to receive the $500 donation. In addition, everyone who enters is eligible to win a $100 prepaid VISA gift card to spend as you wish.

Deadline for submissions is 24 September 2010 and the winners will be notified by 30 September and announced in our next newsletter. One entry per family please. Good luck and thanks to everyone for supporting our business and allowing us to 'give back'!

David & Donna

On 31 May, Howie MacKenzie, a long-standing member of Team David Weir, hung up his REALTOR® hat for the last time and took the plunge into 'retirement'. Howie spent 34 years in the military before entering the Real Estate profession 15 years ago. Without fail, Howie fostered relationships based on trust, respect, and outstanding client service which the Team will gladly continue to provide in Howie's absence. Although Howie will be missed by all his colleagues and clients, he and his family will undoubtedly be enjoying the new digs at the lake! Happy trails Howie!!

Howie & his grandson cut the retirement cake!	The gang celebrating at Howie's retirement pad!

Buying a home is a major purchase. Some new homes in Ontario will cost more because of higher taxes resulting from the introduction of HST. Others will not. It will depend on the value of the home.

HST applies to the sale price of all new homes in Ontario. For homes that are priced up to $400,000, 75% of the provincial portion of the HST is rebated to the builders, lowering the provincial portion of the HST to 2%. As a result, new homes valued at $400,000 or less are not subject to higher taxes under HST.

However, buyers of higher priced new homes are paying more in taxes. This is because there was no change to the GST portion of the HST. Prior to 1 July, the GST was rebated in full on homes costing less than $350,000 and then partially rebated in decreasing amounts on homes selling for up to $400,000. But buyers of new homes valued at $400,000 paid the full 5% GST and will continue to do so under the HST rules.

So what does this mean for buyers of homes costing more than $400,000? They are now charged provincial tax at two rates: 2% on the first $400,000 they pay for a new home and 8% on any amount above that.

There is no HST on the resale of existing homes; but renovations are taxable. The HST also increases the cost of moving house and of living in a condominium. It applies to monthly maintenance fees for condos, as well as to the cost of services utilized when buying and selling a home, such as legal advice, packing and moving household items, home inspection and professional real estate services (including closing costs and real estate agent commissions).

Information Courtesy of Investor Education Fund

You've just made the biggest purchase of your life: a new home for you and your family. What's the best way to protect your investment if you die? Insurance is the answer. But what kind: mortgage insurance or term life insurance?

Currently, if you want to receive CPP benefits earlier than age 65, you're required to stop working or have a reduced income two months before receiving benefits. One proposed change by the federal government eliminates this two-month waiting period.

Starting in 2012, the average earnings calculation used to determine your benefits will change from 15 percent to 16 percent and then 17 percent by 2014. This proposed change will increase the amount of lower earinings from your average earnings calculation resulting in a higher CPP benefit amount.

Currently, early CPP payments get reduced by 0.5 percent until a pensioner turns 65. Under the proposed changes, these payments would get reduced further, by 0.6 percent in 2012. Starting in 2011, payments that begin after a pensioner has turned 65 will increase by 0.7 percent monthly.

For greater detail, check out this Department of Finance Information Paper or consult with your financial advisor.

A good investment in a renovation should increase the value of your home by at least the amount of money you spent, or close to it. A bad one doesn’t get you much of your money back. Don’t assume you will get all your money back from a renovation. The key to renovating is to keep the house in good repair and do the renovations you want to enjoy.

Ontario recently announced legislation that will give consumers more choice and flexibility in their automobile insurance protection. More than 40 revisions to auto regulations have been proposed that give consumers options.

The proposed reforms will help keep insurance premiums affordable by letting Ontario drivers buy coverage that best meets their individual protection needs and budgets. Drivers could opt for a new standard level of auto insurance coverage that could help reduce their auto insurance premiums, or choose additional levelsof medical and rehabilitation coverage includinga wider range of attendant care, housekeeping expenses, death and funeral expenses. Here are a few of the proposed highlights:

• Reduction of Medical and Rehabilitation (non-catastrophic) from $100,000 to $50,000
• Attendant Care Benefit (non-catastrophic) from $72,000 to $36,000
• Housekeeping, home maintenance and caregiver benefits would be optional
• The option to buy additional coverage to effectively reduce the Bodily Injury Deductible from $30,000 to $20,000.

A complete list of changes is available at www.fin.gov.on.ca/en/consultations/auto.

In addition, 17 new consumer protection measures have been proposed including one that prohibits using a driver’s credit score to determine whether a driver is insurable or how much to charge for automobile insurance. Check with your Broker for more information about how you can benefit from these changes!

Information Courtesy of Whitley Insurance & Financial Services