Real Estate Information

Your client is a single mother who’s married to a job that demands quick turnaround, flexibility and tight deadlines. Or perhaps your client’s a soon-to-retire couple in their sixties, social activists who enjoy the prospect of living downtown near the causes, projects and people they support.

Or it could be a newly married couple, who is hoping to break into the housing market but want to maintain digs downtown near their jobs and friends.

What each of these examples has in common is that they would make perfect condo dwellers. But just because their profile seems to fit well with condo living doesn’t mean they have the personality for it.

So how do you go about determining if a condo is right for your client? You start by finding out if your client is right for a condo.“I’ve had many clients who hated condo living,” says Toronto Century 21 real estate sales rep Laurin Jeffrey. “But it’s what they can afford, which is not always what they want.”

Being close to restaurants, bars, museums, public transportation and your job are big pluses of condo living. And given that nearly 50 per cent of residences sold in Toronto last December were condos, it seems a lot of people agree. But Jeffrey believes those who buy condos are doing so mainly for economic reasons.

“They are often the first-time buyer who can’t afford anything else,” he says. “When your budget is under $300,000, a condo is your best bet. And even then, it’s getting hard to find a condo for that money.”

If privacy and independence are big issues your client might want to reconsider buying a condo, recommends Kelowna mortgage broker Julia Krause, who’s been a member of her townhouse’s strata (a multiple housing property in B.C. comprising condos or townhouses or a mix of both as is the case with Krause) council for 12 years. Condo living can be difficult for people who don’t like rules and who are accustomed to doing what they want when they want to. Residents, for example, can’t simply park where they feel like parking or plant shrubs where they think they’ll look attractive.“You need to have respect for your neighbours because you’re in closer proximity to them,” says Krause. “Privacy is sometimes an issue too.”

Krause recalls former neighbours who virtually lived outside. Whenever her husband, a cigarette smoker, ventured outside for a puff, he was confronted by the neighbours each and every time which started to annoy him. Fortunately, the neighbours moved. Because of the way the housing corporation is set up, there can be a level of small-mindedness among some of the homeowners. When an issue arises with a homeowner complaining of, for example, someone parking in the wrong spot, the housing council issues a letter to the target of the complaint informing them of the issue and requesting that they not repeat the wrongdoing.“The person who got complained about will sometimes go around looking for other rule breakers so there’s a degree of pettiness,” admits Krause. “We can never get condo owners to get on the strata (housing) council. They won’t do it. But they sure want to complain.”

Krause advises realtors not to assume they can rent out any old condo as many strata councils have limits as to the number of renters allowed in the multiple dwelling (Krause’s corporation allows a maximum of three). If an investor is interested in purchasing a condo with the intention of renting it out contact the condo council to determine what’s permitted.

Don’t assume that because you pay condo fees that pre-empts you from never having to lift a finger while living in your unit. Krause has received some strange calls such as residents complaining that their fridge has died or that someone left trash in the hallway.“A lot of people who buy these units are coming out of rentals and they think it’s just the same,” says Krause. Be sure to check the condo’s financial situation, she urges. Pay attention to contingency funds for emergencies and make sure the complex or building is insured for replacement value.“If you can, go to the condo without your realtor and hang around and ask people how do you like living here,” she says. In Vancouver, where the average detached home price in the city’s sought-after west-end is over $2 million, it’s clearly not a question of whether condo living is right for you, says Remax sales rep Sam Wyatt.

“It’s the norm here,” Wyatt says, adding that the average sale price of west Vancouver condos in December was over $640,000. “People either get used to it or they move out to the suburbs.”

For those of you who still aren’t sure if your client is right for living in a condo get them to take the following test provided by www.sphinxlegal.com:

1. My privacy is: ___ Not important to me. ___ Somewhat important to me. ___ So important I used to be a hermit. 

2. My need to be in control of my living environment can best be described as: ___ NOT a control freak. ___ Need to be in control, at least to some degree. ___ As a matter of fact, someone DID die and make me king. 

3. Amenities such as swimming pools and tennis courts are: ___ Very important to me. ___ Not that important to me. ___ I’m not the athletic type. 

4. I would respond to the following statement, “I like mowing the lawn, landscaping, and gardening,” with: ___ Are you kidding? ___ I don’t mind it. ___ I love working outdoors. 

5. The following describes my position on doing my annual maintenance chores exactly on time: ___ I thought gutters flushed themselves out. ___ I am on top of it, give or take six months. ___ I have a laminated schedule taped on the refrigerator. 

6. Home resale value is important to me: ___ Because I may be moving within the next three years. ___ But I expect to be here for a while. ___ Even though I plan to live here forever. 

7. Living in an urban environment is: ___ Vibrant, exciting, and convenient. ___ Something I can either take or leave. ___ Not for me—give me the country life. 

8. Meeting and interacting with many different types of people is: ___ Very important to me. ___ Relatively important. ___ I hate people. 

Total all your points, giving yourself 1 point for each first answer, 2 points for each second answer, and 3 points for each third answer. Evaluate your score as follows: 8 to 10 points: Future president of condominium association 11 to 20 points: A good candidate for CID life 21 to 24 points: Thanks for buying the book anyway

In February 2011, a large downturn occurred towards a more Balanced Market as excess inventory was sold. However, there is still an inventory of 929 homes on the markdet with only 1967 sales. It will still take 4.5 months to sell this inventory, and this is if no more houses come on the market. It is still better than the 5.98 months in January 2011.

At the annual forecast symposium sponsored by the Calgary Real Estate Board on January 25, 2011 realtors learned that there was only faint hope that the Calgary market would do more that ease slowly from the slump of 2010. The general consensus was that we may see good activity due to threats that interest rates may rise and buyer qualification criteria may tighten, however, any gains from higher demand would probably be offset by continuing high listing inventories. Consequently, recovery in home values will be slow. We are still in a buyer’s market and may remain there for some time yet 

The availability and ease with which businesses can access credit plays a very important role in an economic recovery.  It is small and medium businesses that provides the majority of new jobs.  Alberta Treasury Branch’s Economic Division cites a survey released by the Bank of Canada (BOC) that businesses should be finding it easier to obtain new loans.

 The BOC surveys major financial institutions whether it has become harder or easier for businesses to get credit over the last 3 months of 2010. . The indication was that business financing saw widespread easing.  During the recession the difficulties of obtaining credit was one of the biggest roadblocks to economic recovery and forget about growth.

 Access to bank financing for small and medium sized companies is important in Alberta, where energy firms thrive on capital. This is another indication that things are generally looking up for 2011.

Suppose you owned a condo that was worth $300,000 in our recent hot market, but after the slump of 2010 it is now worth $270,000 or 10% less.  Should you consider selling the condo and shopping for a house? Suppose you find a house that was worth $450,000 in the hot market that you can buy today for only $405,000. It also dropped 10% in the slump. Should you sell the condo and buy the house now or wait until the market improves? 

  In today’s market interest rates are still very low, there is an ample supply of homes on the market and our economy is rebounding. Today the difference in value between the condo and the house is $135,000 and interest rates are 3.89% for a fixed 5 year term. If you finance the entire difference of $135,000 today, your monthly payments will increase by $586.40/mo. Now suppose you wait and try trading up in 5 years. If home values increase by 4% per year for 5 years the difference in value between the condo and the house will then be $162,248. Assuming that interest rates have returned to 6.89% for a fixed 5 year term and you also finance the entire difference at that time, your monthly payments will now increase by $1,013.10/mo. You will pay an additional $426.70 per month for 35 years or $179,214.00! Waiting may not be the best option.

 If you want to take advantage of the opportunities created by the recent slump, click Here to obtain a complimentary estimate of your current home’s value. It will be emailed to your inbox and you will not have to speak to an agent.

 If you want to use your MOUSE to shop for a HOUSE, click Here. Homes matching your search criteria will be emailed to your inbox as soon as they hit the market.  

Home and condo sales in Calgary and area remained relatively unchanged in December 2010, indicating that a full-fledged recovery in the housing market has yet to take hold, according to figures released by the Calgary Real Estate Board (CREB®). 2010 marks the lowest number of single family home sales since 1995, and also 2010  is the lowest number of TOTAL  MLS® sales for Calgary and area since 2000.

In December, 2010 we have a strong downturn within a Buyers’ Market towards a more Balanced Market. With an inventory December 31^st  of 7,189 units and sales of 1,289 it will take 5.58 months to sell the total inventory. This is if no more listings come onto the market.

In October, 2010 we have a plateau within a Buyers’ Market which has stopped, for now, the slide towards a more Balanced Market. With an inventory October 31st of 10,473 units and sales of 1,523 it will take 6.9 months to sell the total inventory. This is if no more listings come onto the market. This is 10% more inventory than on September 30^th, 2010.

Twice per year Farm Credit Canada (FCC) releases the results of its farmland value survey and according to the fall 2010 report, released yesterday, farmland values in Alberta continued to tickle upwards during the first half of 2010.

The average value of farmland in Alberta increased by 2.9% during the first half of this year, down marginally from a 3.8% increase in the second half of 2009. Farmland prices tend to increase very steadily and gradually over time (see graph), and over the past ten years have averaged a semi-annual gain of 3.6%.

FCC noted in its report that a slowdown in urban sprawl and less speculative interest was partly behind the lower price gain in the first six months of 2010. In the southern areas of the province, land suitable for specialty crops remained in high demand while in central Alberta a decrease in land holdings by large farms and persistent

difficulties in livestock markets drove changes in land values. In northern Alberta demand for property near urban areas slowed, which mitigated land price gains in the north.

Alberta’s gain of 2.9% was right on par with the national average gain of 3.0%. Farmland values increased fastest in Ontario (+4.3%) and slowest in B.C (-0.9%). Saskatchewan (+2.9%) and Manitoba (+3.4%) saw gains near the national average.

With Alberta’s economy moving along at a fairly subdued pace relative to the mid-decade, price gains for farmland should remain moderate in the near future. However, strong global crop demand fundamentals coupled with limited supply growth opportunities means that farmland values across Canada are likely to continue seeing real price gains over the long-run.

Dan Sumner  Economist, ATB Financial   October 5, 2010

Residential building permits in Alberta showed strong resilience during 2010 as builders continued to plan construction projects despite moderating activity in the resale housing markets; however, that resilience may have finally started to give way in September.

Cities in Alberta issued permits for $851 million (seasonally adjusted) worth of construction projects in September, a decline of 11.1% from August. The decline was due entirely to fewer residential permits, which plunged 20.6% to $481 million. September’s decline brought residential permits to their lowest since June 2009. Prior to the fall residential permits had hovered just above the $600 million mark for a year (see graph).

Whenever builders want to begin a project they must first take out a building permit. Hence these figures provide a forward looking indication of how many and what kind of construction projects will commence in the coming months.

Across cities, both Calgary (-27%) and Edmonton (-24%) saw significant monthly declines in residential construction intentions in September. Prior to September, residential permits had been very strong in Edmonton, rising to pre-recession highs over much of 2010. In Calgary the recovery from the recession had been much more subdued.

The resilience of construction intentions during the summer of 2010 was somewhat surprising given the slowing housing markets. September is only one month of data and hence does not constitute a trend yet, but it is possible that these figures mean builders will be starting fewer new homes and condominium projects over the next few months and into 2011.

Dan Sumner   Economist, ATB Financial  October 7, 2010

Few economic indicators are as closely watched as are housing prices, particularly when the economy is thought to be either slowing or accelerating. But the real estate market is also notorious for sending mixed messages, which is exactly what happened in Calgary last month.

After three consecutive months of falling median house prices, the Calgary real estate market rebounded a bit it September with a small price increase. During the month, the median price for all properties sold through MLS® was $355,000. That’s an increase of $5,000 from August, and virtually the same level as September 2009.

But even as prices picked up, the number of sales remained quite low—more than 30% below year-ago levels—which suggests a sluggish market. The ratio of unsold homes on the market to sales during the month is still well within the ‘buyers’ market’ territory, but it did move slightly closer to a balanced market in September.

Even with the modest price increase in September, Calgary’s housing market has been showing distinct signs of moderation lately. This trend has been seen nationwide as potential homeowners were encouraged to buy early in the year, prompted by the specter of rising mortgage rates in the second half of the year.

Those rate hikes have yet to happen, however, which could be one reason for the small price increase in September. Given the slowing trends in the US and global economies in the final quarter of 2010, rate hikes could be slow to materialize moving forward.

Todd Hirsch   Senior Economist, ATB Financial   October 4, 2010