Mistakes When Buying Real Estate

When you are looking at a home to buy in the type of real estate market that is today, (a market where there isn't a lot of homes for sale and the price of those homes has risen with the market demand) don't start projecting your dream home on to it.

What do I mean by "projecting your dream home" on a resale home? It means that you look at a home and you start envisioning all the renovations that you would do to it to make it your own.

Now this is a common practice with home buyers, to envision what a home could look like with some changes, but what starts to happen in a tight market (with limited homes for sale) is people start changing everything about the house.

Recently I have been asked for prices from people that wanted to buy homes that wanted me to give them a budget price on renovation work on older homes in the area. The problem is that its not just renovation work that people want they also want to add square footage so the budget price includes an addition. Additions are far and away a lot more money then most of the renovations that are asked for by the potential buyers.
In the end the budget ends up being almost as much as some of the houses that are for sale. These budgets run well into the hundreds of thousands and it ends up throwing a monkey wrench into the deal.

When you are looking to buy a home and you ask a contractor to work up a budget for you be careful what you tell them. If you tell them an endless stream of changes that you want to the house because that is what your dream is then they (the contractor) will work out the cost based on what you have asked for and that can end up being a lot of money all at once.

What you should be doing is putting them into 3 categories;

1. Immediate repairs. These are things that need to be fixed before you can move in or fairly quickly after you move in, these would be leaky roofs, leaky foundations, broken furnaces, broken windows, etc.
2. Updates and making the home functional. People are pretty resilient, they will adapt to pretty much anything but it doesn't make life easier or more functional. These things are new room layouts, moving the laundry room, new kitchen, new plumbing, new electrical, new bathrooms, updating insulation, refinishing floors, painting. Houses should be updated and renovated every 15 to 20 years, that's not just for resale but also because everything wears out and will need to be replaced. So unless you bought a house that had just been renovated then you have to figure on renovating the major areas in the house within so many years of moving in. 
3. Long term Plans. These are plans that will cost a lot more money then you are willing to spend, these plans can change overtime with your life. Examples of this are adding more square footage to the home (an addition). Or building a garage or carport on the property, also demolishing part of the house to rebuild it is a longer term plan. These big ticket items should always be considered part of the longer term, it allows you to save money and properly design something so that you get the most bang for your buck when you fully commit. Additions can a lot of times be added to your home while you still live there, to a certain extent.

If you were to take the rather large budget that you were given by your contractor about the house you want to buy and break it down into those three categories then you can see if spreading out the spending overtime makes sense when buying the home. After decades of spending money on it will you get your money out of it at the end when you sell it? Does spreading the money around for years mean that you can actually afford to spend that money? Do you want to spend that much money over a longer period of time or do you want to spend your money all at once to get it over with?

Deciding on what you want to do renovation wise will help clarify if you can afford to buy the home and also if the house actually will work for you now and in the long term.

Rob
Village Builders Inc.

Village Builders is Baeumler Approved

Village Builders is now Baeumler Approved!

Village Builders is proud to announce that they are part of the Baeumler approved team.

You can find us now on the website www.baeumlerapproved.ca

This is a great honour for Village Builders as Baeumler approved only picks the very best and trusted contractors in any area that they service.

Please feel free to email us about your next renovation, addition or custom home build at info@villagebuilders.ca

Or checkout our website at www.villagebuilders.ca

Construction Forecast 2019 for Collingwood, Blue Mountain, Wasaga Beach, Creemore, Meaford

Residential Construction Forecast 2019 for Creemore, Meaford, Blue Mountains, Collingwood and Wasaga Beach

As I write this the same thing that was driving the construction industry in 2018 is driving the industry around here in 2019, that would be the real estate market.

The real estate market pushed the cost of used homes even higher then ever before with the price of used homes climbing even steeper then we thought it would in one calendar year. That price increase came about from several things;

1. A large number of people from other parts of Ontario where the real estate market is even higher wanting to move here to work or retire. They like the area and also liked the fact that they could buy something around here that was nicer and larger then their current home for a cheaper price. With more and more people working from home this allows people to move farther from the larger city centres.
2. A complete lack of inventory of houses that were for sale on the market. The selling season started really early in 2018 in February instead of the traditional spring real estate push. This early start removed a large portion of the houses that were for sale before the spring rush arrived. Thus all houses that were listed in the spring were listed at a much higher number and sold throughout the summer. This kept the prices high and also kept the amount of houses on the market at a minimum.
3. The lack of development in the past decades. The townships in this area have been slow to embrace development of any kind, especially new home sub-divisions. The result has been that they are now approving developments that are already not enough to satisfy the demand. As they play catch-up this does nothing to lower the demand for houses.

Because of the lack of choice and the lack of houses to buy and the pressure to actually buy homes, people are buying homes that aren't really what they want. What they do once they have them is spend the money (that they saved from selling homes in one area to buy in this area) on renovating their new home and also usually adding square footage thru additions. This has created a lot of construction work as most people don't want to wait long after they have already purchased the home to start renovating it. A lot people try to renovate before they even move in.

Residential Construction Forecast 2019

Collingwood

In Collingwood which is the centre of the real estate spike in the area and the place that people look to live first, this has made the price of century homes a premium. Renovations and additions of these homes can be seen on every street. This will continue well into the future as the older homes are resold to people who have the  means to repair and expand them. Small houses and every vacant lot that remains are being removed and built on with new custom homes. These homes vary in shape and size but the homes that are being built are of a very high quality.

There are sub-divisions being constructed but they are slow to get going and even slower to be finished. This is keeping the cost of used homes at an all time home and also bringing people that want to buy and renovate extensively to the market. Construction in Collingwood does not show any signs of slowing down any time soon.

Town Of The Blue Mountains

The Town of The Blue Mountains is the one place were there is still a lot of custom homes being constructed. This is because there is still vacant land to buy and build upon. There are also many very old ski chalets that are small and ill maintained that are being bought and torn down so that larger homes can be constructed. The Blue Mountains is were you will find most of the very large custom homes being constructed with no expense spared in their design and construction.

Because of the cost of land being extremely high in the town of the Blue Mountains and the fact that waterfront is at a premium renovations and additions are also very popular. A lot of the homes that are being bought up are still being used as second and third homes for people wanting to enjoy the area when they have the time and don't wish to make it their permanent home. This is fueling the renovation and additions that we see being built and planned as people are unwilling to spend so much money on a new custom home when it is only to be used on the weekends.

Both the custom home and renovation/addition market in the town of the Blue Mountains shows no signs of slowing down as it is suffering from both sides of people who want to move here to live and people that want to own something to stay while they play. This area also has the ability to grow as there is still more land available to build on that is untouched.

Meaford

Meaford has seen a lot of changes and will have a lot more to come, the push from people wanting to live in the area has come to Meaford driving the cost of used homes up and also bringing the cost of vacant land up along with it.

There is a change in Meaford from an older population that is there to retire to younger people with families wanting to live and grow. This is bringing more custom homes being built along with renovations and additions.

The value of these projects is not what you usually see in Collingwood and the Town Of The Blue Mountains but there are a lot of them and more demand for it all the time.

Meaford could be on the cusp of a large building boom in the coming years.

Town Of Wasaga Beach

Wasaga Beach has been probably the fastest growing area for several years. The cost of housing in Wasaga Beach has always been less then in the surrounding areas but that has changed with the overall demand for people wanting to live in the area. As real estate has risen so has the demand for renovations and additions to existing homes.

Custom Homes have grown in value as property near the water can only be built upon now if you are removing an existing building. People with the means to do this usually have the means also to spend large amount of money on their new homes. High End custom homes are becoming more the norm near the water in Wasaga Beach.

The town of Wasaga Beach is very large and there are still places in the beach that can be had for less and these area's still see the normal amount of renovations and additions that are of normal value.

The demand to live in Wasaga Beach will probably not go down any times soon as you still have retirees that want to live there along with a lot of families (because of the amenities) and the tourists that still come for the beach in the summer wanting a place to stay on the weekends.

 Creemore (Clearview Township)

There is more custom homes and renovations going on in the Creemore/Clearview Township area then normal. That doesn't mean that there is a boom in the residential construction industry in the area. The amount of residential construction that actually happens in a township as large as this one is usually not a lot. Decades of suppressing development has driven the cost of used houses up and vacant land even higher. There are finally some sub-divisions being built that might alleviate the pressure but they are slow to come aboard.

With the amount of turnover in used homes there will continue to be a strong renovation industry with the custom homes being weaker.

In Conclusion

Overall there is plenty of work in new custom homes, additions and renovations. More additions and renovations in most of these area's then new homes just because of the lack of vacant land that you are able to buy and build on.

If you are planning to build, add on or renovate then I suggest that you start calling around now to find your contractor because the good contractors will be booked up early this year and possible even into next year with the way the demand is shaping up for used and new homes.

Rob Abbott
Village Builders Inc.