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The Pros and Cons of renting an appliance for your home

Let’s take a look at renting appliances such as a water heater, a water softener, a furnace and an A/C. Personally, I like to buy and own my appliances as I found that, with care and regular maintenance, they last much longer than the conventional wisdom indicates. For instance, I have an A/C unit that runs like a charm and is 29 yrs. old.

Water heaters are to most common appliance rented. The rent runs at about 30/35 dollar per month. If you were to purchase one, you can get a 227L/50-gal heater for $930.00.
Should you need to buy out a water heater, my most recent client’s experience was $895.00 for a unit that was 9 years old, perhaps even 11. Let’s go with what we know for sure and call it 9 yrs. old. The rent was $34/mth so the rent paid was $3,672. Add to that $895 buy-out, the heater cost a whopping $4,567. That’s equivalent to you purchasing 5 water heaters over 9 years.

What about water softeners. Purchasing a reasonable quality softener that is estimated to have a life of 20 years will cost you about $670.00 (keep in mind that the usual problem with a softener is that the beds in the brine tank get clocked over time but can be replaced for a reasonable fee). You can rent them for about $10 per month, $120/year, renting over 20 years you paid $2,400.00 for your softener.

A furnace and A/C units are even crazier, let’s leave them out for now.
The Pro of renting: no cash outlay, low monthly cost, convenience, many come with a service contract, not all. Your choice. You can purchase on your Line of Credit if you don’t have cash and you will pay it off twice as fast, I believe.

Yes buy or No? You will save a great deal of money by owning.
Please not the above prices do not include installation and HST.

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The lie of the averages

I found this article by N. Falcomer interesting and eye opening. I hope you find it too and more. She speaks volumes on false expectations and misguided ideas about the market if one does not search out in full what is going on in the real-estate market. -dP

By Natalka Falcomer July 31, 2018

Real estate pundits point to the average sale price to conclude whether the market is crashing or hyper-inflating. Some go as far as to use the average sale price as an indicator of a recession or a healthy economy. The problem is that averages don’t tell much of a story.

For example, Canada has experienced five recessions of varying degrees between 1972 and 2018, yet the average sale price never dipped below the previous year, except between 1995 to 1996.

The odd thing is that there was no recession in 1995 to 1996, but there were recessions in the mid 1970s, early ’80s, early ’90s and 2008; yet, the average sale price didn’t dramatically crash during these times. Rather, it increased. To put it another way, if you relied upon “the average”, you’d be led to believe that: (a) we never had a recession until 1995; (b) recessions last only a year and (c) you’ll always make a profit house flipping if you simply just wait a year.

If you bought a home right before the 1974 crash, the early 80s or 90s crash, you know this is not the case. You also know that house flipping isn’t always a guaranteed success – costs in maintaining the property, construction, changing zoning bylaws and even changes in demographic tastes can certainly make a flip a financial disaster.

When you peel back the layers of the “average” provided, you discover a more complex story. Averages mislead when a distribution is heavily stacked at one end, with a small number of unusual outliers weighing the average in their favour. It also misleads if you don’t know the story behind how that number came to be.

Consider the example provided by New York Times guest columnist Stephanie Coontz, When numbers mislead: “In 2011…the average income of the 7,878 households in Steubenville, Ohio, was $46,341. But if just two people, Warren Buffett and Oprah Winfrey, relocated to that city, the average household income in Steubenville would rise 62 per cent overnight, to $75,263 per household.”

The same logic can be applied to our housing market. Take, for example, the GTA’s average sale price to date in 2018 ($805,230) versus 2017 ($862,149). Some people conclude that the average price has decreased because we are in the throes of a housing crash. Nobody wants to buy. And, if they buy, they’re buying it for less than what they would’ve paid for the same property last year because there’s no demand and because last year’s prices were completely unsubstantiated.

Any millennial trying to buy a condo in South Riverdale, Mount Pleasant or Little Italy, however, would beg to differ. Condos in these areas saw an increase in sale price and most condos have sold above asking. Dig deeper and you find an even more complex story.

Those who want to buy larger homes in Toronto – young families or couples – cannot afford the millions that such homes command. And those who can afford it already live in those homes and aren’t interested in buying another multi-million-dollar home.

This more affluent (and older) demographic doesn’t want to sell because they know that demand for their properties isn’t as great as it was in our anomalous record setting-market of 2017 (the multi-million-dollar homes are still selling, it’s just taking slightly longer than it did during the hype of the market; nonetheless, our market turnover is still much faster than in other high-demand markets such as London and Paris). And for those who are looking to downsize, they’re not necessarily selling their primary home. Rather, they’re holding onto their primary homes and buying a cheaper and smaller second home, putting more pressure on the same market in which the millennials are competing for some territory (literally). This has the obvious outcome of creating more competition in the cheaper market than in the multi-million-dollar market. The average is skewed because it is heavily stacked with lots of smaller rather than larger price points.

Purchasing power has further eroded not because of an economic crash or lack of demand, but because of changes in the law. Young families or young couples – the backbone of house purchases – were most affected by the changes in mortgage rules. This means that, due to bad luck, today’s buyers can afford less than they could’ve afforded last year. In turn, people are buying cheaper and smaller homes even if it isn’t the best fit for their lifestyle (large bedrooms for each child, play room). Again, it’s not that demand is down or that prices are plummeting, it’s that the type of demand has shifted because who is buying has changed and how much they can spend has changed.

Digging beyond the average shows that this is a supply problem, not a demand problem. Perhaps our government is focused too much on the average and should re-shift its focus from curtailing demand to increasing supply.

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K-W June Real Estate NEWS

After two consecutive years of extraordinary activity where we saw home sales exceeding 700 units in June, some normality has returned to the market,” says Tony Schmidt, KWAR President. “The approximately 600 units that sold last month is in line with the ten-year average for June.”

The average sale price of all residential properties sold in June increased 5.2% to $489,584 compared to the same month a year ago. Detached homes sold for an average price of $575,003 an increase of 7% compared to June of last year. During this same period, the average sale price for an apartment style condominium was $314,180, an increase of 13.2%. Townhomes and semis sold for an average of $378,562 up 10.8% and $391,830 up 2.9% respective

The median price of all residential properties sold last month was up 5.9 per cent compared to June of last year at $450,000, and the median price of a detached home during the same period increased 9.5 per cent to $520,000.

Buyers are wise to avail themselves of a REALTOR® to help them navigate local market conditions and ensure the most successful outcome.”  

 The average days it took to sell a home in June was 22 days, compared to 16 days in June 2017.

For more information on market trends or to trade in real-estate, call me at (519) 577-8181. Denis

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A cooler Market for February – Credits to the Government’s new rules

KITCHENER-WATERLOO, ON (Mar 5, 2018) –– In February, the 377 residential properties sold through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® (KWAR), were an increase of 40 per cent compared to last month and a decrease of 20.5 per cent compared to home sales a year ago. A typical February compared to the ten-year average.

The median price of all residential properties sold last month was practically on par with February of last year at $436,143, and the median price of a detached home during the same period increased 4.8 per cent to $524,000.

The average days it took to sell a home in February was 22 days, compared to 18 days in February 2017.

Not all is the same for properties to know what yours’s is worth, I can provide you with a comprehensive or short market valuation. Contact me, Denis Pellerin at or by phone at (519) 577-8181.

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NEW – details, reports and more

Follow the link and receive no obligation no charge info for sellers, buyers, those looking for tidbits on the Waterloo Region or a no cost property valuation.

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The Summer Market moving to the Exciting Fall Market

Residential sales for the month of August experienced a year-to-date total of 4,876 units, an increase of 3.7 per cent compared to 2016.

There is an indicator that stability is returning to the market.  I did not like the way the market had been going with record setting sales and prices that seemed unsustainable and created an unfavorable real estate market.

In August 2017, comparing August 2016, 286 detached homes were traded, down 18.8 per cent and 105 condominium units down 30.9 per cent which includes all properties regardless of style such as semis, townhomes, apartment, detached and so on.

The good news is that values were not lost. The average sales price of all residential sales increased 10.1 per cent to $441,992 year over year. Detached homes sold for an average price of $519,910 for an increase of 5.9 per cent, while the average sale price for an apartment style condominium was $294,787 for an increase of 26.5 per cent. Townhomes and semis sold for an average of $338,191 up 13.4% and $351,233 a 17.3%.

With a continuing low two-month inventory that benefits the seller, the signs seem to be trending to a more balanced market.

The savvy have said and continue to tell us that there is no best time to get involved. It’s always a good time keeping in mind that with the upwards pricing trends now seems to be the best time to shop for a home or an investment property.

Wishing more info or wish to shop, contact Denis at (519) 577-8181, Want to see “Hot New Listings” for nearly all of Ontario, visit