By Sandra Foster
The topic of real estate is a hot one in both Canada and the US, for entirely different reasons. As someone who has lived in each country for more than 20 years, and owned homes in both, I am fascinated by the differences, and dismayed by the ongoing problems in America. I moved from Toronto to California in the late 1980s. Prior to the move, I owned three homes over a period of ten years, but becoming a first time home owner in Canada was difficult. I bought my first home thanks to subsidies from the builder, and a balloon loan. I bought my second home, a wonderful condominium across the ravine from the Old Mill Restaurant, only because I was able to put down 50% – $120,000 hard earned dollars.
Buying a home in California was significantly easier – at least it was in 1988. But I see now how the industry, and along with the industry, millions of home owners, have managed to get themselves in such a horrible mess. The amount of down payment needed was much less, and my income leverage much more. Since mortgage interest is tax deductible, my ability to pay was judged not only on earnings, down payment and assets, but also by the tax implication. I was actually able to purchase a much more expensive home in California than I could afford in Toronto, on a similar gross income. I still own that home in California, mostly because unemployment is over 10%, prices are depressed, and I’m lucky enough to own a delightful century home in a high value neighborhood, Los Gatos – renting to premium tenants has so far proved easy.
I’m back in Toronto again, and I see that it’s much easier to buy one’s first home – that’s a good thing. But I respect the job that the Canadian government and financial institutions have done, and continue to do, to keep a little sanity in the process. Financing and refinancing to take out equity in the US were all too easy. Qualification for loans was much less stringent. People were comfortable taking more risks. The price the country is now paying in both financial and personal terms is not pleasant to watch.
While I have dual citizenship, I’m Canadian at heart. I like our less aggressive stance to finances. I approve of more government oversight. Our real estate market affirms that our more conservative approach is better in the long run. I have many close friends, however, back in the US and I hope for their sakes and for our overall long term economic outlook that the American market and the American people recover, and get back to business, albeit hopefully a little more cautious.
I do miss some things about California – my previous career was in high tech, so adoption of the latest and greatest tools was something I enjoyed and leveraged. Interestingly, homes often listed and sold on craigslist. In my neighborhood, for example, the most expensive home sold twice from a craigslist post…the first time to a Google millionaire, for $1.8m, in one day. When he and his family decided to move back east, the house went back on craigslist again, and sold in two days. So far, I haven’t seen craigslist or other public networks as having that kind of influence in the Toronto marketplace. My personal goal to be paperless was solidly in effect while I lived in California. I’m finding it harder here, for a variety of reasons. I’m optimistic, however, that this goal is achievable not only personally but also professionally, and I look forward to computer-based offer presentations, digital signatures, and other innovations over time. I’d love to start a dialog with other agents about this.
Sandra Foster is a Sales Representative with Royal LePage/Johnston & Daniel Division and a regular contributor to the Muddy York Real Estate Blog.
The powerful rebound in the Greater Toronto Area market carries on with a full head of steam. Very strong demand continues to dominate, lifting sales of existing homes to all-time highs in recent months, yet keen buyer interest haslargely failed to attract more sellers, resulting in a dearth of homes available for sale. The properties that are put on the market, however, move fast, frequentlybeing the object of bidding wars. This has contributed to prices in the area generally reaching record-high levels.
A Tale of Two Countries
By Sandra Foster
The topic of real estate is a hot one in both Canada and the US, for entirely different reasons. As someone who has lived in each country for more than 20 years, and owned homes in both, I am fascinated by the differences, and dismayed by the ongoing problems in America. I moved from Toronto to California in the late 1980s. Prior to the move, I owned three homes over a period of ten years, but becoming a first time home owner in Canada was difficult. I bought my first home thanks to subsidies from the builder, and a balloon loan. I bought my second home, a wonderful condominium across the ravine from the Old Mill Restaurant, only because I was able to put down 50% – $120,000 hard earned dollars.
Buying a home in California was significantly easier – at least it was in 1988. But I see now how the industry, and along with the industry, millions of home owners, have managed to get themselves in such a horrible mess. The amount of down payment needed was much less, and my income leverage much more. Since mortgage interest is tax deductible, my ability to pay was judged not only on earnings, down payment and assets, but also by the tax implication. I was actually able to purchase a much more expensive home in California than I could afford in Toronto, on a similar gross income. I still own that home in California, mostly because unemployment is over 10%, prices are depressed, and I’m lucky enough to own a delightful century home in a high value neighborhood, Los Gatos – renting to premium tenants has so far proved easy.
I’m back in Toronto again, and I see that it’s much easier to buy one’s first home – that’s a good thing. But I respect the job that the Canadian government and financial institutions have done, and continue to do, to keep a little sanity in the process. Financing and refinancing to take out equity in the US were all too easy. Qualification for loans was much less stringent. People were comfortable taking more risks. The price the country is now paying in both financial and personal terms is not pleasant to watch.
While I have dual citizenship, I’m Canadian at heart. I like our less aggressive stance to finances. I approve of more government oversight. Our real estate market affirms that our more conservative approach is better in the long run. I have many close friends, however, back in the US and I hope for their sakes and for our overall long term economic outlook that the American market and the American people recover, and get back to business, albeit hopefully a little more cautious.
I do miss some things about California – my previous career was in high tech, so adoption of the latest and greatest tools was something I enjoyed and leveraged. Interestingly, homes often listed and sold on craigslist. In my neighborhood, for example, the most expensive home sold twice from a craigslist post…the first time to a Google millionaire, for $1.8m, in one day. When he and his family decided to move back east, the house went back on craigslist again, and sold in two days. So far, I haven’t seen craigslist or other public networks as having that kind of influence in the Toronto marketplace. My personal goal to be paperless was solidly in effect while I lived in California. I’m finding it harder here, for a variety of reasons. I’m optimistic, however, that this goal is achievable not only personally but also professionally, and I look forward to computer-based offer presentations, digital signatures, and other innovations over time. I’d love to start a dialog with other agents about this.
Sandra Foster is a Sales Representative with Royal LePage/Johnston & Daniel Division and a regular contributor to the Muddy York Real Estate Blog.
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Posted in Commentary
Tagged California, Old Mill, Real Estate