Mattamy Homes to acquire U.S. homebuilder

Mattamy Homes is expecting that its acquisition of a Canadian division of a U.S. homebuilder will boost its presence in the Canadian high-rise market while providing new opportunities for investors.

Brian Johnston, chief operating officer of the Oakville-based building company, said the deal with the Monarch Corporation will put it in instant contention to compete with other builders to get a piece of the high-rise market.

“I would highlight that this acquisition, in one stroke, puts us in the high-rise business in a significant way," he said. "High-rise represents more than 50 per cent of new home sales in the Greater Toronto Area and so is a major positive to this transaction.

“The high-rise market is a big part of our housing plans and it’s integral to our future goals as we continue to develop and build in the GTA and elsewhere.”

The announcement of the acquisition comes fresh off the heels of a CMHC report that found foreign condo investment rests at seven per cent, with a strong contingent of immigrants buying into high-rise buildings in Toronto, Vancouver and Calgary, as well as eight other large urban centres in Canada.

And with demand for condos expected to rise as developers continue to accommodate homebuyers and investors who can’t afford homes, Mattamy Homes is taking advantage of the opportunity with this deal.

"Monarch is a leading builder in Ontario, with an exceptional reputation and portfolio of assets," said Peter Gilgan, founder and CEO of Mattamy Homes, in a release.

"The addition of the business to Mattamy Homes aligns well with our growth strategy, and we look forward to working with the talented Monarch team as we enhance our already significant footprint in Ontario and enter into the high-rise market."

For now, Mattamy Homes will take on Monarch’s existing profile and consider their future plans once the transaction closes. This is expected in the Q1 of 2015.

At that time, the two companies will evaluate how and to what extent the two organizations will be integrated.

The purchase price is currently estimated to be $330 million CAD, however the deal is subject to customary closing conditions, including approval by the Canadian Competition Bureau.

Johnston said that the intention is to have their operational plan solidified by the beginning of Mattamy’s 2016 fiscal year, which begins June 1, 2015.

by Jordan Maxwell

BCREA Housing Market Update (December 2014)

Vancouver and Hamilton lead the growth in new house prices

The latest New Housing Price Index shows that Vancouver and Hamilton outpaced the rest of Canada in October. The report from Statistics Canada reveals that nationally prices increased by a modest 0.1 per cent, the same as September. Vancouver saw a 0.4 per cent rise; the largest rise in the metropolitan area for more than 4 years; although this is largely down to higher construction costs. Hamilton prices were also up by 0.4 per cent on market conditions and city development charges. The city has seen 9 consecutive months of increases. Calgary’s new homes cost an extra 0.3 per cent with higher labour costs one of the factors. Prices were unchanged in around half of the areas surveyed and new housing was cheaper in St. Catharines-Niagara, Ottawa-Gatineau and Windsor partly due to builders offering deals.

Housing Market Ends Year in Balanced Conditions

Vancouver, BC – December 12, 2014. The British Columbia Real Estate Association (BCREA)

reports that a total of 5,972 residential unit sales were recorded by the Multiple Listing Service®

(MLS®) in November, up 8.8 per cent from November 2013. Total sales dollar volume was $3.4

illion, an increase of 12.1 per cent compared to a year ago. The average MLS® residential price

in the province rose to $574,694, up 3.1 per cent from the same month last year.

“BC home sales were robust in November,” said Cameron Muir, BCREA Chief Economist. “Improving economic conditions, strong consumer confidence and persistently low mortgage interest rates are providing a solid foundation for elevated consumer demand."

“Market conditions have improved province wide, with most regional markets now in the mid to high range of a balanced market,” added Muir.

Year-to-date, BC residential sales dollar volume was up 22.1 per cent to $44.8 billion, compared to the same period last year. Residential unit sales were up 15.3 per cent to 78,973 units, while the average MLS® residential price was up 6.0 per cent at $567,292.

Canadian Housing Starts - December 8, 2014

BCREA ECONOMICS NOW

New home construction in Canada rose 6.6 per cent in November to 195,620 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts of 195,792 units

SAAR was relatively unchanged and sits slightly in excess of Canadian household growth.

Housing starts in BC urban centers increased 26.7 per cent on a monthly basis to 29,565 units SAAR.  On a year-over-year basis, housing starts were 10 per cent higher compared to November 2013. Single-detached starts were up 11 per cent while multiple units were up 10 per cent compared to this time last year. Year-to-date, total BC housing starts are 6 per cent higher than 2013.

Looking at census metropolitan areas (CMA) in BC, total starts in the Vancouver CMA bounced back from a large decline in October, rising 10 per cent year-over-year on broad strength in both single detached and multiple starts. Year-to-date, Vancouver housing starts are up 3 per cent. In the Victoria CMA, new home construction fell 15 per cent year-over-year due to weaker starts of both single detached and multiple units. Year-to-date, housing starts in Victoria are down 16 per cent. Total housing starts in the Kelowna CMA were up 45 per cent year-over-year in November due to a large increase in starts of multiple units.  Year-to-date, housing starts in the Kelowna CMA are up 34 per cent . Housing starts in the Abbotsford-Mission CMA posted another steep decline in November, down 44 per cent year-over-year.  Year-to-date, new home construction in the Abbotsford-Mission CMA is down 28 per cent.

Canadian and US Employment - December 5, 2014

BCREA ECONOMICS NOW

 

Employment in Canada declined by 10,700 jobs in November after two months of large gains. The national unemployment rate ticked 0.1 points higher to 6.6 per cent. Total hours worked, which is closely associated with economic growth, rose just 0.1 per cent.

In BC, employment grew by 4,200 jobs in November. Both full-time and part time employment increased , and the provincial unemployment rate fell 0.3 points to 5.8 per cent. Year-to-date, total employment in BC is up just 0.7 per cent but has grown at an average annual rate of 1.6 per cent over the past 3 months.

The US economy added a robust 321,000 jobs in November while estimates of previous months job growth were revised higher by a combined 44,000 jobs. Over the past 3 month, US payroll growth has averaged a very healthy 278,000 jobs.  The US unemployment rate remained at 5.8 per cent.

4 Strategies for Scoring Sellers When Inventory is Low

Loads of agents know firsthand that an uptick in buyer activity and some loosening of lending purse-strings can result in a particular flavor of supply-demand imbalance we call “a seller’s market.” A recent Trulia study proved this market season is just that: 75 percent of surveyed consumers said it’s better to buy a home now than a year from now.

But the same study revealed that there’s also pressure from the other end of the market – only 1 in 3 consumers said it would be better to sell now than a year from now.

These patient would-be sellers have pushed inventory to a 12-year low.

Real estate decisions are highly personal financial, family and lifestyle decisions, so the fact that the market is strongly tilted pro-sellers doesn’t mean that it is the right time for every seller to list their home. That said, the long-frigid market offers abundant opportunities for agents who want to grow the listing side of their businesses by thawing out the selling, moving and lifestyle design plans so many sellers kept on ice for so long.

Here are a few strategic paths to go down if you want to build your seller-side business in today’s low-inventory market:

1. Go Back to the Farm

Just because something seems like it’s been done to death, doesn’t mean it shouldn’t be resurrected – and reinvented – when the situation calls for it. Farming is one such thing.

It’s been around forever, and that’s probably because it works. Sure, it takes an investment of smarts, time, energy and money to cultivate a farm, a geographic area on which you focus your marketing activities. But if you do it wisely and consistently, it can also create an annuity of sorts – a long-term account of goodwill, favor and recognition of your name and your brand in the hearts and minds of prospective home sellers in the area(s) of your choosing.

Sellers in a specific area often share the same issues and concerns – and they certainly share the same fortunes when it comes to rising and falling property values. This creates an opportunity for you to be strategic about choosing a farm, prioritizing areas in which homeowners over the last few years tended to stay put and hold onto their homes, rather than selling at super low distressed market prices. These are the homeowners who are most amenable to being activated into sellers by smart, data-heavy, consistent farming that:

(a) constantly briefs them on how much homes in their area are now selling for, and

(b) provides them with other market insights as to how they can leverage today’s favorable market dynamics.

Be creative and current when it comes to the tactics you use to execute a farming strategy in this low-inventory market. Today’s farms should be cultivated both digitally and “IRL” (in real life).

Sitting Open Houses and sending out ‘Just Listed,’ ‘Just Sold’ and ‘Market Report’ postcards are all strategies that still work. But you can power-charge your reach by also farming online with Trulia Local Ads, YouTube market reports, and locally-focused Facebook pages. It’s also wise to include web addresses (URLs) on your hard copy marketing materials, like your real estate signs and business cards, to your personal website and other online resources for farm-area sellers.

2. Be Where the Sellers Are

Never underestimate the power of sitting Open Houses on a regular basis in the areas where you want to be listing homes, even if they’re not your listings. This old-school strategy costs very little and still works, not only for meeting buyers in the looky-loo stage, but also for meeting the neighbors who might be considering listing their homes. Go back to basics, expressly inviting the neighbors with paper invitations or via an hour or door-knocking, if you can.

Hosting seminars, workshops and small-scale events at local community centers and coffee shops is another way to get in the right room with the right people. This gives you the opportunity to brief them on the market and showcase both your expertise and your dazzling personality, in one fell swoop.

When marketing to get listings in a low inventory market, do not neglect to harness the power of data, in every one of your postcards, database newsletters, blog posts and social media activities. Key metrics to stay on top of on a monthly basis for your hyperlocal areas of expertise include:

How many/few homes are on the market (and how inventory levels are trending, relative to what’s normal for the area)

How quickly homes are selling (and trends in days on market, or DOM)

How far over-asking they are selling for, if your farm’s list price-to-sale price ratio is over 100%

How many offers are being received – if you’re in a multiple offer market.

If you’re farming, this data should be the basis of a good portion of your marketing materials. But if you’re not, there are still dozens of way to use data to show sellers the scope of the opportunity in front of them:

Reach out to your own past client and referral database, using the warming market as a great reason to give them a ring and brief them on the state of the market with resources like Trulia’s Housing Barometer.

Create a local market blog post or series of posts on Trulia Voices, and keep your Trulia Profile updated with your own listings’ success metrics like homes you’ve sold.

Create data-focused articles for local area blogs and local or neighborhood newspapers.

Update your own Facebook page with hard stats showcasing the heat of the market, and consider placing geo-targeted ads on Facebook headlined with a single, powerful data point, e.g.: Avg. Sale 10% Over Asking.

Get in the habit of never offering data without adding a layer of your own listings’ success record or your own expert insight on top. This one element can make the difference between activating a seller to list their home and activating a seller to call you to list their home. In fact, some of the most powerful social media “advertising” I’m seeing these days is when agents simply post their own listing success stories on their own Facebook pages. Cost: $0.

As you start to market to thaw out and reactivate sellers, keep one thing in mind. Prospective sellers have been underwater, upside down and in a general recession fog for years.

They might have to hear that the US real estate market is coming back a dozen times before they realize that this information is applicable to them. They might have to see data proving that their neighborhood and personal home values are making a comeback another ten times before they draw the conclusion that they might be able to sell. They might have to be exposed to data showing that YOU are the right agent – or at least one of the agents they should speak with – another seven or ten times before they give you a ring. And keep in mind that as much junk mail, emails, text messages, phone calls, IMs that people have to sort through, they might have to RECEIVE 20 or 30 well-crafted, strategic, smart messages about your value to them today before they act on one.

4. Stay Committed to the Process

Marketing to activate would-be sellers is, like virtually all marketing, a numbers game. It’s a marathon not a sprint. But don’t get discouraged – stay committed and consistent. Every local market report you send out, every Open House you sit, every Just Listed card you send, every Trulia Local Ad in which you appear contributes to the snowball of messages it will take to move a seller to warm up to the idea that now might be the right time to sell – and that you might just be the right agent to do it.

Tara-Nicholle Nelson

Commercial Real Estate Gains Momentum in BC

 Vancouver, BC – December 1, 2014.  The BCREA Commercial Leading Indicator (CLI) rose 1.4 index points to a new record high of 118.4, surpassing the previous high of 117.1 set in the second

quarter of 2014.

"Momentum has been building in sectors most important to commercial real estate,” said BCREA Economist Brendon Ogmundson, “That momentum should translate to a strong year for the commercial market in 2015."

The CLI has now advanced for seven consecutive quarters. That trend signals significant strength in the economic environment underlying the commercial real estate market.

A rising trend in the CLI generally points to growth in investment, leasing and other commercial real estate activity two to four quarters ahead.  Given the current trend, we would expect growth in the commercial real estate market for the remainder of 2014 and the first half of 2015.