Edmonton Real Estate Blog

Finding the Best Buyer

A video today! Sheldon Johnston discusses pricing, marketing and how to find the best buyer for your home:

Tomorrow....a double dose of stats - weekly and monthly on the same day!

How Much Value Does Landscaping Add To A Home?

The value of landscaping is truly in the eye of the beholder - one person's paradise may be another person's wasteland. A beautifully landscaped yard loaded with perrenials and vegetables may appeal to someonewith a green thumb, but won't appeal to those who don't enjoy or have time for gardening. Of course the opposite can apply - a no maintenance back yard generally doesn't appeal to young families (since their kids can't play on rocks) but could be perfect for an older couple or frequent travellers.

How much should you spend on landscaping?

The answer to that question depends on your situation. If you're planning on staying in your home for a long time, then the landscaping is for your enjoyment and the amount you spend is up to you. If you're trying to sell your home, landscaping does not give returns as high as painting, or renovating kitchens and bathrooms. Having neat and clean landscaping is what is most important - unkempt yards tell buyers that the home is not well cared for. In the current market, where there are hundreds of new homes on the market with no landscaping, having grass and a deck or patio is a major advantage.

Henderson and Butt Appraisal Consultants puts together an excellent Renovating Guide each year that explains the return on investment you can expect for different types of renovations. Their guide shows the return on investment for various landscaping options varies from 30-60%. In other words, according to Henderson and Butt if you spend $20,000 landscaping your property, you immediately add $6,000-$12,000 in value. Keep in mind this is just a guide... you also have to consider how the landscaping affects your salability. Some buyers won't even consider homes with no landscaping.

Where Should You Start?

If you are landscaping for your own enjoyment then you probably want to go further than grass, a fence and a deck. One thing is for certain, having a plan is very important. DIY landscaping jobs can be very easy to spot, so getting some guidance can help you out immensely. Companies like Earthworm Design will send a landscape architect to your home to draw up a plan with you. Once you have a plan you have the option of doing the work yourself, hiring a professional, or a combination of the two - they can even help you decide what to do yourself and what you should contract out. If you want to spread the projects out over a few years, they can also give you advise as to the order to do things in.

Take a walk around some neighborhoods right now.  Some people just have the midas touch when it comes to landscaping (or maybe they had help!). You walk drive by and think “wow” they’ve done a nice job - nice flowers, stones arrangements and theme.  You can also get an idea of what not to do, which is often just as important.

How much of a difference really nice landscaping make? While it may not be the primary reason someone will buy your home it can certainly make the difference between you or your neighbour selling first.

Weekly Update on the Edmonton Real Estate Market

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

New listings: 476 (599, 617, 550)
# Sales: 286 (293, 254, 273)
Ratio: 60% (49%, 41%, 50%)
# Price changes: 480 (554, 511, 522)
# Expired Listings: 162 (270, 261, 787)
# Canceled/withdrawn/terminated listings: 63 (65, 55, 158)
Net loss/gain in listings this week: -35 (-29, 47, -668)
Active listings for single family homes: 4206 (4236, 4242, 4183)
Active listings for condos: 2914 (2910, 2901, 2882)

Summer holidays have officially gone into full swing! For the past few weeks we thought the buyers were on holidays, but the sellers seems to have gone on holidays too (and maybe the Realtors as well?)! Not only are new listings at the lowest level we've seen all year, but it seems a lot of sellers have unofficially taken their properties off the market. At our little office we do have a number of buyers who want to see properties, and we are having a heck of a time getting appointments. It seems half the properties showing active on the MLS are "off the market" this week. I don't know what kind of strategy that is, but with over 11,000 listings on the MLS if I had a buyer who wanted to see my home I'd be throwing down the red carpet!

Ok, enough about that. This week is the first week all year we've squeaked into "seller's market" territory with a 60% sales to new listings ratio (anything over 60 is considered a seller's market). I don't expect it to stay there though.... Inventory, sales, and average prices are pretty steady - average price for the month so far is $337,858 (down slightly from June), projected sales should be around 1700 (also down slighty) and inventory should close out the month around 11,000.

I was fiddling with the charts today, and figured it was time to knock another month off - I think 6 months is a good trend line. Anyway, here is the chart from the beginning of the year:

And here it is with January removed:

What a difference!

One thing has taken a real hit this month, and that is the price per square foot for condos, we've been expecting to see this for sometime now, with the level of new condo construction in Edmonton:

Ouch!

Link Karma:

Lastly, I'd like to point out a few articles I found on other blogs this week that I thought were very interestng:

• Chris Davies analysed the average prices in Edmonton since 1962, I found his analysis very interesting, pointing out that only 7 years since 1962 have shown negative price growth, and no matter when, as long as you held onto your real estate for 9 years you made money (on average you doubled your money!). There are some other gems in there too...
• Todd & Danielle Millar summarized a report from the Canadian Conference Board showing that Alberta may have had a tough 2008 but is expected to lead the country for the next four years in economic growth and population growth and already boasts the lowest unemployment and highest personal income.
• The Green Edmonton blog will teach you how to save concrete and metal during renovations, and shares some other environmental tips like how to cook weeds and whether geothermal heating is worth it in Edmonton.

Have a great weekend!

The Money Pit

The river city is gorgeous right now. It’s definitely a pleasure to show properties when the trees and flowers are in bloom. One of the nicest communities in the Edmonton area would have to be Belgravia - for its distance to the university, downtown and the river valley.  But even gorgeous neighborhoods have their "Money pits."

Recently I showed a young couple a property they were quite eager to see. Right from the get go things with this property just seemed off to me.  For starters the wooden sidewalk and the overgrown landscaping made it feel like you were deep in the rain forest.

Aside from that this property scared the beejeebers (yes I know that is not a word, but the real words I used to describe the property are not appropriate here and will remain between my clients and I). It is safe to say the movie money pit leaped into my mind. The 1986 version to be exact, starring Tom Hanks and Shelly Long from Cheers.  The tagline for the movie made it seem so romantic.  “For everyone who's ever been deeply in Love or deeply in debt”.  Personally I saw it as more horrifying than the 1986 "April Fool's Day" horror movie.

It’s not often that the calculator of my mind blows a fuse trying to calculate rough fix up costs. The kicker is that the property is priced well, even with the $100,000 in needed renovations, but what makes me afraid of this particular property is the potential hidden costs. Unless you are a seasoned estimator or renovator and know what typical hidden nightmares may arise you just have to stay away.
Undoubtedly it will sell - one person’s trash (in this case us) is another’s gold (possibly a seasoned renovator).

New Home Listings in Edmonton

Last week we discussed a press release from the Canadian real estate association that talked about real estate market trends in Canada. One of the things the press release mentioned was:

"New listings reached record or near-record levels in Toronto, Vancouver, Ottawa, Regina, and Saskatoon. This more than offset a decline in new listings in Edmonton and Calgary, which continue retreating from peaks in March."

So I was curious to see just what the trend for new listings has looked like in Edmonton over the past few years. I got out my trusty Excel spreadsheet and ran the numbers:

It does appear as though the number of new listings is following the normal trend this year, just about 1500 listings higher than where the trend line usually sits. As for last year though, I knew we had a spike in June, but I didn't realize just how out of whack things really were until I saw it on this chart. If you want to see the affect on inventory, check this out:

What Areas of Edmonton are Selling the Best?

I was chatting with someone the other day on our cool little chat doo-hickey-thingy (look down and to your left) and they wanted to know what areas of the city were churning through the inventory and what areas were moving slower. So I did some searching in the MLS database and got the answer.

The chart below shows the absorption rates for different areas of the city, as well as for different types and price ranges of properties. The absorption rate is the number of listings currently on the market, divided by the number of sales in the pat 30 days, and it tells you how many months it will take to sell the current inventory if the rate of sales stays the same.

I thought the results were quite interesting. First off,the fastest moving properties within Edmonton are in the University area and south east (right next to the University area) with 4.4 months worth of inventory. Now, this makes a lot of sense since a lot of parents are up in Edmonton looking to buy properties for their kids while they're in school. Overall it seems that the southern part of the city is performing better than the northern areas.

It seems that Sherwood Park has everyone beat with 3.7 months worth of supply, and I think this is due more to lower inventory than higher demand. Stony Plain on the other hand has the worst absorption rate of 11.5 months, this should have an impact on prices there and is likely due to the distance from Edmonton (typically the closer you are to downtown the better your property will do in down times). Funny thing is the central area has one of the higher rates, and I think this is because of all the new condos and condo conversions on the market in the area.

In terms of price ranges, it appears that $300-$400k is the place to be as a seller, even with the high level of competition in that price range. Bungalows and bi-levels seem to have an advantage over 2-stories; I feel the split levels may be exaggerated because of the small sample size. Single family homes have the advantage over condos.

Just so everyone is clear, I included condos and single family homes (no land, rural or recreational properties) in Edmonton, St. Albert, Spruce Grove, Stony Plain and Sherwood Park. I broke up the city into areas which you can see on the map below (click the map for a larger image). I'm sure some will disagree with my generalizations but that's the best way I could think of to do it.

Weekly Update on the Edmonton Real Estate Market

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

New listings: 599 (617, 550, 558)
# Sales: 293 (254, 273, 321)
Ratio: 49% (41%, 50%, 58%)
# Price changes: 554 (511, 522, 563)
# Expired Listings: 270 (261, 787, 72)
# Canceled/withdrawn/terminated listings: 65 (55, 158, 163)
Net loss/gain in listings this week: -29 (47, -668, 2)
Active listings for single family homes: 4236 (4242, 4183, 4457)
Active listings for condos: 2910 (2901, 2882, 3094)

We had a question this week about the number of vacant and never lived in homes on the market, out of the 4236 single family homes on the market 1316 are vacant and for condos 1054. In other words, 33% of the listings on MLS are vacant!

Flaherty Speaks: "No Bubble!"

"There is no bubble in the Canadian housing sector."

That's what Jim Flaherty told reporters in Calgary yesterday. He says there is concern with the longer amortizations, and home purchases with little or no money down (hence the changes made last week to government-backed mortgages) but "Flaherty said he isn't fretting about the health of Canada's banks, even as subprime mortgage woes hammer financial institutions in the United States."

He also said that while the economy is going through "turbulent" times "our economy is strong."

Blame Alberta! Whether Prices go up or Down it's Our Fault!

When prices were skyrocketing, Alberta was praised for bringing up the national average sale price, and now prices are falling and we are to blame for that too! At least according to the media interpreting stats released by the Canadian Real Estate Association yesterday.

According to the report new listings have reached record levels nationally (up 8% from the same time last year), while sales are decreasing (down 13%).

"New listings reached record or near-record levels in Toronto, Vancouver, Ottawa, Regina, and Saskatoon. This more than offset a decline in new listings in Edmonton and Calgary, which continue retreating from peaks in March."

Has Canada finally caught America's cold?

"The Canadian real estate market, while cooling, is still much different than the U.S. market with its record low number of foreclosures or defaults" says the President of The Canadian Real Estate Association, Calvin Lindberg. In the United States home prices dropped by 14.1 per cent in the first quarter of the year, according to the Case Shiller national home price index."

The stats show prices are up for the first half of the year - 3.2% over last year at the same time and 1.4% from the end of 2007. However, prices for June dropped .4% and this seems to be what the media has grabbed onto.

From the report:

"The slight decline in average price comparison reflects the impact the surge in average price in Calgary and Edmonton had last year. The average price in these markets retreated after rising dramatically last year, but has stabilized since March 2008 in line with a balanced market. "

From the media:

• Housing not so hot, Winnipeg Sun
• Calgary Home Sales Take 32% Slide, Calgary Herald
• First Decline in Nearly a Decade, Metro Canada
• Home Prices Slip for First Time in 9 Years, ReportOnBusiness.com
• HOUSING: Warnings grow of further weakening in Canada, Alberta Index
• Homebuyers get a break as BC house prices flatten, Vancouver Sun
• Housing prices drop across Canada, But Ontario still strong, CityNews
• Home Sweet Home gets Cheaper, The Gazette (Montreal)

Nearly everyone of those articles pegs the price drop on Alberta, when we actually saw average prices increase in June. Oh well, I guess it's nice to get some attention after years of being ignored!

Anyway, there are certainly interesting times ahead for us (Edmontonians, Albertans, Canadians...Earthlings...), lets hope the ride isn't too bumpy.

How NOT to Expire: Top 4 Tips to Improve the Salability of Your Home

We had planned on posting this last week, but got interrupted by the changes to mortgages in Canada. So without further adieu...  A simple salability checklist.

This is not intended to be an all purpose list but it is intended to help some people give their heads a shake. Here are my top four tips to avoid having your listing expire (and to get your home sold!):

1. Pricing. This is very important and is partially determined by supply and demand. I don’t care if there are 30 units for sale just like yours asking the same price if none of them are selling that won't help you. Look at the ones that sold and when then they sold. Best bet hire a REALTOR. Some will tell you to use an appraiser and I’ll tell you I’ll see you in 6 months when you haven’t sold.  Especially if you understand how appraisals work. Certainly your competition is an indicator but if they aren’t selling then figure out who is and price accordingly. Again, best bet here is to hire a REALTOR. 
2. Marketing.  Okay people this is going to sound really harsh but is worth spending some time on.  Where is your property going to be marketed?  How often and for how long?  What type of marketing?  What is the quality? (samples would help you here).  If you don't ask, you get what you get, and if what you get is the do it your self hand book that says you’ll save the commission in one breath and in the other to reduce your price by the amount you’ll save I’ll see you in another year when you still haven’t sold.
3. Service. However you sell your home or your property servicing your sale is hugely important.  This in and of itself could be an entire set of blog posts but a few examples include scheduling of appointments, following up on showings, feedback, working with interested parties, providing information and communication, monitoring changes in the marketplace, monitoring the transaction, identifying and dealing with issues, potential issues and so on...
4. Accessibility. Make your property as accessible as possible and as attractive as possible. The REALTOR has the huge advantage through the MLS since most listings require very little notice and the agents always have access to the key box. This is why your home should always be in showing condition.  You never know when the buyer I'm showing may want to change directions and view your home instead of the ones I have set up.

If you follow these simple steps you’ll at least increase your chance of selling in a time when over 80% of the homes on the market each month don't sell.