Edmonton Real Estate Blog

When is the Right Time to Buy?

There is a lot of debate in Edmonton right now, about whether it is the right time to buy or not. The timing of a home purchase depends on many factors including your personal finances, goals and desires, as well as external factors such as affordability, the economy, financing availability and more.

I can't answer when the best time to buy for every individual is, but I'd like to put something in perspective.

The above image is something I quickly put together to represent a snapshot of the housing market. The red line represents average prices over a short period of time - real estate prices tend to rise and fall on the short term, while rising overall on the long term.

The green arrow represents where everyone wants to buy: when prices are as low as they can get in the current economic climate. The problem is, you never know when the market is at the green arrow until a few months afterwards. What ends up happening is that most of the people who were waiting for the green arrow realize prices are on the rise somewhere around the blue arrow, and come into the market together creating competition and causing prices to rise further. All the while the selection of homes for sale shrinks.

Now, I don't know exactly where we are on that red line right now, (I'll probably be able to tell you in a couple of months...lol). Anyway, for argument's sake, lets say we're about where the red arrow is; there is a huge selection of properties available on the market, and relatively little competition. Prices have dropped and may drop a little further, but there is potential for an increase in the short term as well.

For as rocky as things have been in the stock markets the and media lately, it looks like prices may have come down only .9% for January.  Not exactly cause for panic.  However, there are good and bad stats out there, and as I said earlier, you have to make your own decisions based on your personal circumstances.

So in the end what I'm trying to get at, is that you can aim for the green arrow, but don't get stuck with everyone else at the blue arrow. If you shop at the red arrow (when most people are reluctant to enter the market) you'll have more to choose from, more negotiating power, and less competition.... as long as you can swallow prices dropping a little further before they start to pick up again.

***Foot note***

• If you are one of the many people who are currently looking at buying be aware that different areas, different price ranges, and different types of products are performing differently. You should be working with someone who knows what's going on and what represents good value in this market.
• There is clearly a divergence occurring in the market between well priced or competitively priced properties and over-priced properties.
• Buyer activity is reminiscent of late late 2006 and early 2007, although sales will probably not reflect that as buyers are taking longer to make decisions.  Things are moving, some are moving quickly, but there is also a lot a crap on the market at outrageous prices.

Edmonton's Unbelievably Bad Real Estate Photo Hall of Fame

We're not the first to do it and we certainly won't be the last, but we've put together a little montage of truly terrible photos found on MLS. Enjoy!

   

If you really can't get enough bad MLS photos check out this site - he posts a new one everyday!

Google "Gorgeous Condo." Seriously.... Do it!

Recently we listed a condo in South Terwillegar. I won’t say our clients were skeptical, but they were certainly looking for a different experience this time around from their last experience.  Now, I've mentioned on the blog  before that we do some different things that the majority of our competition just don't, won't or can't do and this listing is a perfect example.  Even with years of satisfied clients behind us we continue to strive for the highest levels of service, advice and marketing possible.

Anyway, back to our clients condo... I told them their condo was gorgeous (certainly compared to the competition with their upgrades, having the best price on the South side doesn't hurt either) so I put the challenge to Sara to prove it to them. So, if you Google “gorgeous condo”  the first result should be a link to an ad for the condo on Kijiji, and one of the paid results on the right hand side is also ours.  We listed this property 6 days ago and she obviously came through for me getting our clients condo two results on the first page ( if you google “gorgeous condo”).

She even went a couple of steps further.  You’ll find our "gorgeous" little condo in the number 1 and 3 spots if you Google "South Terwillegar condo".  She has strategically placed the condo in other places as well . I think that's pretty cool eh?

(Please note that depending on your location this may or may not work...it definitely works if you're located in the greater Edmonton area. Also, the search engine results mentioned in this article were accurate at the time of writing.)

Obviously we put our listings on MLS so other agents can access them, this also gets them on the largest portal for Real Estate in Canada, MLS.ca  which is about to be re-branded as REALTOR.ca. We also put them on about 20 other major sites, its own personal site - in this case www.edmonton-condo.com - and 65 other minor websites to get the most exposure possible. 

In comparison a  comfree seller who recently contacted us had  about 3200 viewings on his property since August.  We listed a property in a similar location in December, and its site has had 3300 viewings, plus 42,128  impressions through our online advertising and the listing has received four offers. Another unit we listed in early January has already had 1700 viewings, 122,000+ impressions and one offer.

Our listings also go on our main site www.edmonton-homes.ca  which gets about 20,000 unique visitors a month and comes up #1 in the natural results if you search “Edmonton homes” on Google. (If you click the number 2 result you’ll find some of our listings in the featured listings too. You’ll be able to tell they are ours because they have good pictures).

If you landed on this blog there is a good chance you got here by searching for "Edmonton real estate" on Google since it's the first site in the natural results, (our main site comes up number 5). It's tough  to get on the first page (obviously I had nothing to do with this) with the likes of the real estate weekly, the combined Remax site (that contains all of their offices listings), and the REALTORS Association of Edmonton in second, third and fourth. Not bad for a little company. I could go on here but I won’t bore you. 

You'll also find some of our listings our being advertised on a new site - www.GreatEdmontonHomes.com - where we're profiling exceptionally photogenic homes that we have listed.

So at the end of the day its not how big you are, but what you know and how you apply it that matters. So where are you found and how do you look?

Sustainable Housing in Alberta

Living with an environmentalist is not the easiest thing for me. Some days I feel like I'm graded on my ability to distinguish what is recyclable and what's not. So it's a huge surprise to both of us that I'm writing this post. What's always been missing besides common sense for me was a simple instruction manual.

Well I finally got what I was looking for: the first ever guide to "housing sustainability" in Alberta. It's actually quite simple because it breaks things down room by room and discusses things lfrom renovating and choosing non toxic paint.  Some of the things discussed in this booklet can in my opinion actually help increase the saleability of your home, and save you money operating it.   

If air quality and water quality in your home are important to you, this quick and easy guide is a MUST have for every home. Living longer and getting sick less frequently are all good things.  And the best part about it is that this little booklet is absoulutely FREE.

Published by Natural step www.naturalstep.ca (which helps "homes and businesses take meaningful steps toward sustainability)  and funded in part or in whole (I'm not sure which) by the Alberta Real Estate Foundation www.aref.ab.ca, which provides funding to community groups. Since its inception AREF has spent over 10 million towards projects like this one.

To get the booklet you can go to either of those sites or get it directly here: http://www.aref.ab.ca/Resources/HouseholdGuidebook_EVersion.pdf 

Help yourself its free and it will do you and your family a world of good.

A large part of buying and selling real estate is identifying trends that will have an impact on value.  There's always the obvious like location, age and so on, but I think this identifies a trend that is going to become more and more infused into buyers' values and decision making.  So hop on the bus gus, get a new plan stan and down load it here today!

Weekly Update on the Edmonton Real Estate Market

Here is our weekly update on the Edmonton real estate market. (Last week's numbers are in brackets). For the past 7 days:

# New listings: 570 (562)
# Sales: 250 (170)
Ratio: 44% (30%)
# Price changes: 285 (235)
# Expired Listings: 115 (136)
# Canceled, withdrawn and terminated listings: 36 (82)
Net loss/gain in listings this week: 169 (174)
Active listings for single family homes: 2725 (2584)
Active listings for condos: 2010 (1817)

More of the same this week, lots of new listings, but the inventory hasn't climbed like I thought it would this month. With the number of homes that came off the market at the end of '07 (that didn't sell) I thought the inventory might spike right back up again, but it seems more like a normal increase for this time of year. Is that because many of those sellers have found renters for their homes? Or is it because they are spending a little more time considering their options and researching when to list and who to list with? I'd have to say it's a combination of a number of things, and I'm sure our readers will have opinions of their own. Happy Weekend everyone!

How to Make Your New Home Walk Through a Success!

Ah the joy of a new property.  After months of frustration or elation (depending on your experience) you receive a letter (depending on your builder 30 - 45 days prior to possession) announcing your possession walk through dates. 

More and more I am getting contacted by people with new properties (imagine that), and I am noticing a disturbing trend among the builders: they are preventing access to the property prior to the "walk through". Even more disturbing is the trend of holding the walk through on the day of possession.

The "walk through" as it is called by some in the industry is simply the opportunity for you and the builder (usually the site superintendent or construction manager) to walk through the property and take note of any issues that may need to be addressed in order for them to fulfill their agreement with you.

In normal circumstances you should do the walk through your new home a week to ten days prior to possession, so that you and the builder can review the deficiencies. This then gives the builder plenty of time to correct things, so when you get possession the home will be in move-in condition. If your walk through is scheduled for the day of possession, it is very unlikely you’ll be able to move into your home in a manner that will add to your satisfaction level.

There are several proactive things you can do to make this process go more smoothly:

• When deciding on a builder ask when the walk through will be. If it's possession day walk, hell, no run out of there. J/K (walking its much safer).

• If your property is already under construction... Try and arrange the walk through for a date earlier than your possession. Try.Try.Try. If they won’t do the walk through prior to possession, see if you can arrange to go into the home before possession to take note of the deficiencies. (If possible bring up some of those deficiencies with your sales person, site superintendent, construction manager and or whoever takes care of the customer care issues) so that there is at least a chance they will be taken care of by possession.
• Be sure to get the name and contact information for the person who will be walking through the property with you. Just in case there are problems and you need to reschedule or you have a question/concern you need clarified.
  
  
• Take a camera, and note pad to record the deficiencies, and use sticky notes or masking tape to clearly identify them for the builder.

At the end of the day its not their fault if its left to the last day if you didn't ask before hand.  Just try and avoid problems by dealing with them upfront. 

p.s. don't forget your mask for all the dust.

Fed Slashes Rates

CNN:   "The U.S. Federal Reserve dramatic 75-basis point cut in interest rates Tuesday intensified speculation that other central banks could soon follow in slashing the cost of credit...The Bank of Canada, which had already been easing interest rates, on Tuesday again cut its interest key rate by 25 basis points to 4.0%. It was unclear if the steps were concerted, nor werer there signs of similar moves among other central banks Tuesday. But markets speculated that the big Fed cut could usher in a new era of falling interest rates globally."

Globe and Mail: "The U.S. Fed’s massive unscheduled rate cut this morning is the clearest sign yet of how worried it is about the states of the economy and the markets, and more cuts are pretty much sure to follow, economists say."

New York Times: "For the shaken world markets, the move seemed to provide some relief. When trading resumed after a Monday holiday, Wall Street initially joined in the plunge that had shaken Europe and Asia for two days. But after opening down by more than 460 points, the Dow Jones industrial average was off about 75 points, or 0.6 percent, at 1 p.m."

Moody's Chief Economist: “It’s a once-in-a-generation event.”

Forbes: "Gold jumped by more than 10 usd in the immediate aftermath of an emergency 75 basis point rate cut from the US Federal Reserve, as the central bank of the world's largest economy moved to try and stave off a recession which could spread around the world."

BBC: "This is huge....The last two such emergency cuts were on 17 September 2001, shortly after the attacks of 11 September, and on 3 January 2001, in the wake of the dotcom bust...The last time the Fed cut rates as much as three-quarters of a percentage point was in August 1982, almost 26 years ago. Even if it isn't going to work as well as it did in 2000 [in response to the dotcom crisis], it might at least prevent markets and the economy driving themselves ever deeper in to a quagmire."

Reuters: "The Canadian dollar rose off a four-month low versus the U.S. dollar on Tuesday as a surprise rate cut by the U.S. Federal Reserve and a smaller cut by the Bank of Canada put the interest-rate spread in Canada's favor...the reaction of the Canadian dollar over the next few days is going to depend on whether or not we get some stability and confidence returning to the market."

What are your thoughts? Will it make a difference? Too little too late? Will it scare people or encourage people? How will it affect Alberta? Canada? The housing market?

Buying a Home South of the Border

Today we have a guest author - a Realtor from Phoenix, Arizona. He's been helping a lot of Albertans buy property in Phoenix lately, and has found a lot of us have the same questions. He contacted us and asked if he could answer some of these frequently asked questions here on the blog and we thought it was a great idea. I don't the first thing about buying real estate in Phoenix so do your homework before you get involved. Here is what he sent:

Greetings from Phoenix! My name’s Jonathan Dalton and I’m an agent with RE/MAX Desert Showcase and author of Dalton’s Arizona Homes Blog. As I write this the temperature is hovering around 1. (35 for us – sounds better that way, actually.) Of course, it’s also midnight. But I digress.

Over the last several months, ever since the Canadian dollar reached parity with the American dollar, I have been answering questions and meeting with Canadian buyers – nearly all Albertans – looking to purchase a vacation home in the Phoenix area.

I’ve heard much about the seminars that have been held there over the past few months; I’ve never been one for a one-size-fits all approach because purchasing real estate in Phoenix (or anywhere) isn’t for everyone. There are risks that need to be taken into consideration, filtered against one’s personal circumstances. Plus, I don’t think you ought to have to pay to find out the basics. There are a handful of questions I ask that will help both me and the prospective buyer focus on what’s important:

1. Oilers or Flames? If you’re reading here I probably know the answer but it always helps to know whether I should discuss Mike Vernon and Theo Fleury or Gretzky, Messier, Kurri and Fuhr. (I’m a Kings fan so I have equally painful memories of both groups.)
   
2. What do you like to do? The Phoenix metropolitan area is huge – some 65 miles separate Surprise in the northwest, and Queen Creek in the far southeast. In fact, Queen Creek isn’t in the same county as Phoenix. Queen Creek is in Pinal County, as is Florence (featured in the local paper as a destination for Canadians) and Pinal carries a higher tax rate than Maricopa. You can golf and shop anywhere but there are particular things – sporting events, theater, etc. – for which living on one side of the Valley or the other may work better.
   
3. Retirement community or no? Some active adult communities have age limits as low as 40 years old. If you’re thinking about a seasonal rental (even though the hot months in the seasonal market are the same months you’d probably want to be down here and not in the snow), these communities often are the best bet as they offer significant community amenities to their residents. And because of the number of winter visitors, year-round neighbors are vigilant about watching their friends’ properties during the summer.
   
4. What’s your time frame? Waiting to see if the Phoenix market softens further could be beneficial but only if your dollar retains its current strength against the U.S. dollar. A drop in strength of the loonie can be more costly than a drop in Phoenix property values.

Speaking of seasonal rentals, one of the questions I often receive is where tenants can be found. In truth, your best bet for seasonal tenants are the people you know – the ones who aren’t interested in buying but wouldn’t mind visiting for a couple of weeks or a month. With monthly seasonal rental rates currently approaching $2,000 (not guaranteed, mind you … just an average), your friends and family can provide an income stream along with the security of knowing the home will be well cared for.

One final note and then I’ll return you to your Edmonton real estate news. If you’re serious about buying, skip the short sales – properties where the owner owes the bank more than the home is worth. These usually are a waste of time and they aren’t really a bargain – your simply buying someone else’s overpriced problem at market value, but often waiting weeks or months to hear from the bank whether they’ll accept your offer. The list prices you see aren’t real and there are abundant opportunity risks at play.

If you’ve got particular questions about purchasing property in the Phoenix area, feel free to visit my blog or send me an e-mail. Thanks for reading!

Weekly Update on the Edmonton Real Estate Market

Here is our weekly update on the Edmonton real estate market. (Last week's numbers are in brackets). For the past 7 days:

# New listings: 601 (562)
# Sales: 228 (170)
Ratio: 38% (30%)
# Price changes: 242 (235)
# Expired Listings: 151 (136)
# Canceled, withdrawn and terminated listings: 53 (82)
Net loss/gain in listings this week: 169 (174)
Active listings for single family homes: 2625 (2584)
Active listings for condos: 1928 (1817)

Just like last week, lots of new listings this week, but the inventory hasn't jumped as much as I thought it might. I still expect to see more listings coming online in the next few weeks, still at a faster pace than sales. Have a great weekend everyone!

A Guide to Buying Real Estate: Part 4, Deposits

The next article in our series on buying and selling real estate is Alberta deals with depositis. The following information is generic in nature, and will not apply in all cases. As we've said before this is a simple guide to buying and selling real estate, not an exhaustive one. If you have any questions regarding deposits, or purchase contracts ask a professional who is qualified to answer your questions.

As we've already learned in this series, the Statute of Frauds requires that when it comes to buying or selling real property, everything must be in writing. What's put in writing? A contract.

One of the basic elements that must exist in a contract is “consideration.” This means that each party to the contract must receive something of value. Consideration is what each party in a contract receives in exchange for its promise to act in a specified way. Typically when selling real property the seller receives money, and the buyer receives the title to the property.

My intention was not to get to "law-ish" here, but to talk about deposits. When a buyer makes an offer to a seller, the offer must be in writing, and should be accompanied by a deposit. The buyer may withhold the deposit until the offer is accepted, but it will typically be required within two business days of acceptance.

What is the deposit for?
The deposit can be as small or as large as the buyer and seller agree to, and there are different reasons either party may want to offer or accept different amounts of money. The deposit is typically viewed as security for the seller; once the offer is accepted and all conditions are removed (ie. the property is sold) the deposit and the contract are what ensures the property will change hands on possession day. If for some reason the buyer is unable to fulfill their part of the bargain, and purchase the property for any reason, they forfeit their deposit to the seller. The seller may then have grounds to pursue further legal action against the buyer (ie. sue them).

When is a deposit refunded, and when is it forfeited?
A deposit is refunded (or returned) to the buyer if the buyer and seller do not come to an agreement. If conditions are included in the purchase contract, and the conditions are not removed the deposit is refunded to the buyer. If the contract is agreed to, and all conditions are removed (the property is sold) and the buyer backs out, the deposit is forfeited, if the seller backs out the deposit is refunded. If a party backs out of the deal, the other party may have other legal recourse (ie speak to your lawyer about this!). Of course, all of this is spelled out in the contract and may vary depending on what the parties agree to.

What is the difference between an initial and an additional deposit?
In many purchase contracts, the buyer and seller will agree to an initial deposit, as well as an additional deposit. Typically the initial deposit accompanies the offer, or is delivered once the offer is accepted. If there is an additional deposit it is most often delivered if and when all the conditions are removed. Again, this is outlined in the contract so if you are uncertain about the timing of deposits, or have specific requirements for them be sure to ask.

How much are deposits?
The deposit can be as small or as large as the buyer and seller agree to. As a buyer, you may choose to offer a large deposit to make your offer more attractive, and potentially encourage the seller to make other concessions such as the purchase price or possession date. The size of the deposit may also be affected by the value of the property - more expensive properties may require a larger deposit.

What is the difference between a deposit and a down payment?
The deposit counts towards your down payment. If you were purchasing a $200,000 home, with 20% down, your total down payment would be $40,000. If you gave a $1000 initial deposit, and a $4000 additional deposit, you would owe the remaining $35,000 of your down payment at closing.

Who holds the deposits?
In most cases the seller's brokerage holds the deposit in a trust account. There are strictly enforced rules regarding trust accounts in Alberta. On some occasions the deposit is held in a lawyer's trust account. If you're purchasing a home from a builder the deposit may be put into their general account and not "held" at all. If you're purchasing a home privately the seller may want to hold the deposit (speak to your lawyer before you let that happen!!!). Some of these situations are safer than others, so if you're making a deposit be sure to ask where the money will end up.