So you got ultra lucky and managed to secure a 3.29% fixed 5 year mortgage on your recent home purchase. This incredibly low rate is a consequence of our recent years of economic uncertainty and it is bound to increase in the years to come.
A great way to avoid the shock of the rate change later on is to use the low rate as a double benefit in paying down your mortgage.
Act as if you had a higher rate today and save yourself thousands of dollars in interest costs.
An example: Using a $400,000 mortgage with 30 year amortization and comparing a 3.29% to a 4.29% rate. This would be a common scenario for an average single family home purchase in Calgary. The difference in payment is about 13% or $224 per month. Monthly payments based on 3.29% are $1745 vs a payment of $1968 if the rate was 4.29%.
If you prepare yourself now by opting to raise your regular payments by 13% (using the privileges within the mortgage contract) to $1968 per month you will actually save $21,000 in interest costs which equate to 5.5 years off the mortgage amortization.
Not sure if you can make the change? Add the extra $224 per month into a savings account and put down the lump sum payment on your mortgage once you are comfortable with the payments. If the extra $224 is a challenge, then you know now that you will need to make financial adjustments when your mortgage term expires if rates are higher.
If you want to know all of your options in paying down your mortgage faster, speak to your mortgage advisor.
Numbers supplied by Allan Bowerman, Senior Mortgage Planner, The Mortgage Alliance Company of Canada-S&R Mortgage Group
Driving down Stoney Trail from Tuscany today I noticed the new signs up for the Stoney/Nose Hill Interchange. Folks at the south corners of Tuscany and Scenic Acres will soon start to see some of the initial work for this project. Completion is slated for fall 2014.
There will be a temporary detour down to Bearspaw Dam Road during construction as well so a couple different phases ahead. I'm sure it will be an adjustment for a while, but will be a great additition to the transportation improvements in the outer NW area.
If you are self employed and reviewing a future home purchase, you need to speak to your mortgage broker to get the ball rolling before you fall in love with a property.
The previous methods for qualifying look to be changing and 'stated income' may no longer be possible. You may be required to provide much more information about your income especially if your T4's do not reflect it.
What does this mean to you? Paperwork and a potentially longer qualification time if you have to get the assistance of your accountant.
The January numbers were released from CREB this morning with some minor fluctuations in single family as well as condo stats.
Although the number of sales has dropped a bit since last January, the reduction in inventory and new listings is pushing us towards a balanced market. As previously seen, condos are lagging a bit in the move, but are also moving toward balance.
Some new condo developments have adjusted to the market by presenting product in lower price points (and sizes).
There are pockets of areas where inventory is quite low and well priced and presented homes are getting snapped up within hours/days of going on market. Specifically, the $450,000 - $549,999 category saw a significant jump in January. If you are waiting to list your home for sale, this may be the year to list earlier as you may be able to take advantage of low inventory pockets.
It is interesting to watch the movement trends both on a micro level with my own clients and across the city. City plans, transit/bike and transportation options, schools and accommodation, buying power, and year of design and style preferences drive the market in ways that overall stats just don't show. Review per community, zone and price point reveals the finer details.
I am curious to see how the demographic change in our city will affect the type of property styles that are in demand (condo, villa, townhouse, bungalow, 2 storey, etc.) and how the availability of immediate possession spec homes from new home builders will drive buyer expectations.
This is the time of year lots of folks start looking as they prepare for a spring/summer move. People are playing a bit of wait and see and the weather can dictate timing and motivation. We are continuing to see migration to Calgary from across Canada and other parts of the world. This is helping to push the rental market and if the trend continues we will see the predictions of increasing sales and prices in the numbers as a tighter rental market motivates folks towards home ownership.
The average price and median price numbers continue to move about and make great headlines but a deep look at sales numbers show they are somewhat misleading. Average price can easily be swayed by sales in the higher/lower price categories that change 'average price' but not the resale value of an 'average home'. In February, CREB will begin discussing the MLS Home Price Index (HDI) to report statistical information and that should provide more clarity to the market than 'average price'.
This past Wednesday the Calgary Real Estate Board (CREB) hosted their annual forecast breakfast. Expert presentations were offered. A big takeaway was the 2012 outlook. If you are interested in reviewing the statistics behind the press releases and headlines, then have a read.
The last week has been very busy in the marketplace so this is a great indication for the momentum building for the year.
Another statistic you will soon see in the media is the MLS House Pricing Index (HPI). Coming to Calgary in February, this index is intended to clear up the misinterpretation that often accompanies 'average price'. As average prices can be skewed by the composition of sales, it does not reflect price trends based on the type and features that a home provides. For example, one luxury home sale in a community can raise the 'average price', however that doesn't mean other homes have increased in value.
The MLS® HPI is calculated using a sophisticated statistical model that estimates home prices based on their quantitative and qualitative feature. More information will be available as this new metric is made available and I am curious to see how it is understood and adopted.
At the end of the day, if you want to understand the market and the value of your home, give me a call. You don't need to understand statistical models or the economic forecast, that's where I help out. If you want to understand the numbers that are behind the 30 second tv spot then enjoy the read.
Even on a day like today, with -30 windchills, I am showing properties to prospective buyers. You have to think they are serious buyers. I mean, who else is out in this weather?
As a seller, please take the time to treat us well and welcome us into your home. Leave the front lights on so I can find the lockbox on your front door. If your lockbox is buried and frozen in snow or require me to find it in the snowdrift at the side of your house, I have to tell you that you are not my favourite house today. Please leave out a mat at the front door. We are trying to keep your entrance clean, but we need some help. There are 4 pairs of boots in our group. The mess depends on whether or not the driveway and sidewalk have been cleared.
This is also the time of year that many Calgarians take the opportunity to fly to somewhere warm for a week or 2 or 10. If you have your home on the market, then you have to stay accessible. If you don't want an offer to ruin your holiday than take your home off the market. If you do keep your home on the market than make sure someone is taking care of your home and welcoming us inside.
If I show your home tonight to my buyers and you leave the lights on for me, I appreciate it. Hopefully I bring you an offer.
I hope you enjoyed a wonderful holiday, a very Merry Christmas and are looking forward to a great year in 2012.
The year has started out quickly with the recent upturn in activity resulting in various predictions about the future of the market. The number of listings has reduced significantly over the holidays but is stabilizing in a general sense as well. The number of sales has increased last year especially towards the latter half of the year. Prices remain relatively consistent with last year but it also depends where you are in the city. I personally feel that sales and prices will slowly start to increase this year as long as international economic forces don't once again put a lid on our enthusiasm.
One item of note in the shift of buyers expectations over the last while. As new home builders have added more features and upgrades to their packages to new buyers, some buyers have begun to expect more from resale homes such as hardwood floors, granite counters, updated fixtures, cabinet styles, etc. If you are in an area competing with new construction, it is these upgrades as well as price that are pushing the market. As a result, some neighbourhoods may see the price shift quite differently. Other items such as finished garages or installed audio systems may sway buyers. It is not about price per square foot as buyers are looking to compare builders, quality of construction, features, finishes and upgrades.
If you are considering a sale or looking for a new home, give me a call to get started as this year is going to look different than what we have been used to.
Some numbers of note from the CREB press release:
Calgary residential sales in 2011 increased eight per cent over last year, with 18,568 sales for 2011 compared to 17,267 in 2010. Recovering from tepid sales activity in the first half of 2011, early improvements in employment and migration resulted in a pickup in housing demand in the second half of the year. By the end of June 2011, year-to-date sales activity had only increased by two per cent compared to the second half of the year, where residential sales improved by 15 per cent.
Meanwhile, the condominium market recorded declining sales for nearly half of the year, but favorable pricing and improved economic conditions pushed sales up by double digit rates for the second half of the year. 2011 condo sales totaled 5,382, a 4 per cent increase over the previous year. The rise in sales was complemented by an annual 12 per cent decline in listings. This helped to tighten the condominium market, causing inventories to decline to 1,287 and months of supply to remain just above four months.
“The demand recovery in the condominium market lagged the single family market, as price adjustments in both the single family and condominium markets resulted in more selection for consumers,” Stante says. “For the first time in several years, consumers had additional selection of single family homes at a lower price range, which directly competed with the condominium market.”
Single family average price in 2011 reached $466,402, a one per cent increase over last year. While there have been some strong monthly increases, primarily due to sales in the upper end skewing the prices, overall prices have remained fairly stable. Meanwhile, the year-end median price of 405,000 remains at levels similar to 2010.
Condominium prices have remained persistently low in 2011, while some of the monthly figures have been boosted by high end penthouse sales. By the end of 2011, the average price of $287,172 remained one per cent lower than the previous year.
When it comes to purchasing or selling a home, some fundamental rules have just changed.
1. If you have purchased a home recently, the Inspection Schedule you previously saw has been revised. The schedule now removes any connection of dollar amounts to an inspection conditions. In simple terms it means that if the buyer is not satisfied with the condition, they do not waive and the sale does not complete. Any deposit will be returned to the buyer in this case. If other arrangements were negotiated in the purchase, they have to be clearly stated in the contract.
2. Sellers now have the choice to not post that a sale is pending on MLS so conditional/pending sales can remain marketed as active listings. Buyers may then be looking at homes that are conditionally sold without knowing it until they write an offer. Sellers may also receive additional inquiries and offers once a home is conditionally sold. This change is new to the Calgary market and it is not yet clear how it will be adopted.
There have been a number of changes to the rules and standard practices over the last couple of years. I'd be happy to answer your questions so that you are best prepared to make your move.
As my clients know, I am a strong believer in preparing a home for sale. Below is some great advice from Elysse Bulloch from Simply Stylish Staging about staging for the holidays.
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Christmas is fast approaching the weather is cooling off and the snow is falling. Don’t let Christmas get in the way of selling your home. This time of year tends to bring out the serious buyer and also tends to be a less competitive time of year. Follow these holiday staging tips below.
Choose holiday decor carefully, sellers need to be careful not to overdo it. Christmas trees can take up a lot of space. If you have a smaller home stay away from the tree this year. Choose a color scheme that is the same as the rest of the house or pick decorating with a neutral colour scheme, so buyer do not get distracted. Choose decorations that are a general winter theme rather than religious pieces this way you are still appealing to a wide buying audience.
You need to remember when selling your home less is more. You don’t want your home to feel crowded. By using less, it will make the space seem bigger. Pick a few of your favorite decorations that match your current color scheme or try to stick to neutral colors. Garland and clear glass ornaments work well.
Curb appeal can be tricky in Calgary’s cold snowy winter months. Add a decorative planter to your drive way or front door for a punch of warmth. Also be sure to shovel your sidewalks and turn on interior and exterior lights. Buyers will feel welcomed from the minute they pull up.
Beware that Christmas does not appeal to everybody but the holiday season tends to attract serious buyers that want to be settled in their new place by the beginning of the year.
CMHC released the Rental Market Report for Calgary a couple of days ago and a review shows significant drops in vacancy rates across the board. While prices are showing just marginal increases, they are sure to follow soon given the current trends.
The fall rental market survey of the Canada Mortgage and Housing Corp. shows the city's apartment vacancy rate decreased to 1.9 per cent in October compared with 3.6 per cent in October 2011.
What is fueling this change? Increased demand.
With an increase in migration to Calgary and Alberta in general, available inventory has been reduced. This is even in spite of new projects coming on line.
The changes to mortgage and lending rules last year may have also resulted in less new inventory coming to market. While a majority of large investors weren't affected, there is a significant group that has had to shift their investment patters.
What does this mean to you? If you are renting, prepare for a potential rate increase this coming year or more competition for available units. It may also be a signal that the resale home market is also about to see a positive shift.
The November 2011 CREB Market stats were officially released yesterday to no great surprise. Things are chugging along with no large scale changes from the past few months. There was an increase in November sales to last year by 8% along with a 2% reduction in listings compared to last year, but although it is great to see those numbers moving in the right direction we remain at overall flat pricing compared to last year as well as overall slower market when looking at our 10 year average. Condos are also starting to see a growth trend. If this trend continues we will slowly start to see lower inventory levels with prices increasing.
The future predictions for the market are all over the papers, economic reports and such and the vast majority are calling for a strengthening market with prices beginning to move up in either 2012 or 2013. Timing and strength of change will depend in part on international factors. We won't know a shift has happened until the numbers are in and then it has already passed so timing the market will remain challenging as always. We aren't expecting huge sudden changes though so expect slow and steady shifts.
There are a few items of note from various investment and economic folks out there. The rental market has seen a change with a decrease in vacancies and the beginning of price increases. While people are taking longer to purchase right now, they are moving to Calgary and often look to rentals before purchasing. The changes to mortgage requirements for investors may be resulting in fewer investment properties coming on market and therefore renters may be in more competition for prime units. Our labour market numbers are good and Calgary again is a bright spot on the map. As rental prices increase and interest rates remain at very low marks, we will begin to see folks running their numbers and looking to invest in a home instead.
As always, feel free to contact me anytime to assist you with your sale or purchase.
Numbers of Note:
Calgary, December 1, 2011 – According to figures released today by CREB® (Calgary Real Estate Board), Calgary residential sales in November increased eight per cent over last year, at 17,538 after the first 11 months of the year.
While sales activity tends to taper off in the winter months, so far this year Calgary area sales remain significantly stronger than levels recorded last year. Single family home sales totaled 962 for the month, an increase of eight per cent from November 2010. Meanwhile, year-to-date sales totaled 12,464, a 10 per cent increase over last year. Over the long term, however, sales remained a tepid 17 per cent below the 10 year average.
November listings have edged down over last year’s levels, decreasing by two per cent. Lower listings combined with the increase in sales helped reduce the months of inventory to less than four months.
The year-to-date average and median price of single family homes were a respective $467,140 and $406,500. Overall, prices remain relatively flat compared to last year.
Condominium sales for the first 11 months of the year totaled 5,074, a five per cent rise over the same period last year. Inventory levels declined to 1,676 units, helping push down the months of supply.
“The rise in condominium sales can be attributed to the confidence in the market, and is typical of this phase of a normal market recovery,” says Stante.
Condominium year-to-date average and median prices in 2011 were $287,545 and $261,500, respectively, a decline over the first 11 months of 2010, mostly due to increased sales in units priced under $200,000.
2011 is the first year that that over 400,000 baby boomers a year turn 65. The impact of this shift will be far reaching. Although Calgary is a young city in comparison to others we will also see an impact.
I am already working with a few folks reaching retirement that are looking to downsize from large family homes to something that suits their future needs. The hard part is defining what that looks like. Not everyone is ready to go from 2400+ sq feet in a private residence to a 900 sq ft condo. In fact, many are actively looking to keep a private residence, but maybe one where the snow is cleared or there is a greater sense of community and access to amenities. Commute to work is no longer a priority, but a short trip to visit grandchildren is now high on the list. Homes need to be of quality construction as that is what these folks are used to and would accept nothing less. Homes also have to be designed for being home all day and provide the light, appropriate layout and access to make day to day living comfortable. This package in the right price point is not something that is in vast numbers on market.
The other side of the coin is that I am seeing more families looking for homes that can accommodate both their children as well as their own parent(s). Whether due to health reasons, childcare or economics, more families are looking at options as they begin to care both for their children and their parents. The sandwich generation is growing too.
While some folks are looking to specialize in working with an older demographic, I don't see it all too different. It is still providing exceptional service to help folks figure out what they need and introduce them to what is available on market. It is being honest about the current value of their home so they can make productive decisions and working with them to prepare in a way that makes the transition easier. Whether it is taking the time to downsize belongings first, identifying required upgrades, finding just the right new home or even working with family to connect folks with the right experts to manage family affairs, it is all part of the process.
A thought to builders and designers: If you are building beautiful bungalows and villas, consider parking and stairs. I have had a number of folks turn their backs on new construction because access wasn't well considered. This is Calgary after all. And don't forget that these folks may have downsized, but they now have their family and grandchildren to host for dinner. While many folks no longer prize a large dining room, many baby boomers focus on family and hosting those they love. They want to enjoy a meal without seeing the dishes. :)
If you or your family are looking for your new home, give me a call. I am happy to help.
The Snow Route Parking Ban is in effect this year throughout the city so it is a great idea to check out the maps and rules so you can be prepared. It will kick in once a 'snow event' is triggered when over 5 cm of snow has fallen.
If you are looking to purchase a home, it is worth a look to see if a prospective home is on the route. The routes may change, but some folks may see the routes as a big positive or negative. You do have to move your vehicle off the road, but you will be on a cleared road and able to get out of your street after a snow event.
The best direct resource is the City of Calgary website which will have all of the latest info, link to an online map of all routes which I can't link to directly. Also check out the Road Conditions Map (SNIC) which shows up to date info across the city. Should mobility be an issue, Handicap snow route exceptions can be requested with the city.
It is -16 celcius outside right now and overnight it is expected to go down to -23. It is the start of winter in Calgary.
This morning we woke up in our home to find our windows completely frosted over with ice and condensation. The source, drying mudding from drywall work in our basement, resulted in much higher than normal humidity levels. After a few hours of cleaning, a trip to the store to buy a dehumidifier was in order.
If you find your windows regularly do this in cold weather, some investigation is required to keep your home healthy and to avoid potentially costly repairs. During home inspections, I've often heard inspectors note water damage to window frames and surrounding drywall. Often this may have been caused by humidity rather than a leaking window. The danger of high humidity is also that mould can result.
If the cause is a humidifier set too high or too many plants in a particular area, that is easy to fix, but it may also be an indicator of water issues in your home.
An item to consider when prepping your home for sale is a presale home inspection. It is difficult to lose a sale due to an inspection deficiency, so it is best to be prepared. If you are budgeting for some repairs and improvements, the inspection can help you target your efforts.
Should the home inspection show no major issues, it can be provided to prospective buyers as part of the pre-review process which could potentially help expedite the sale process.
Should issues arise, you can address them BEFORE you have an offer on the table or else give you time to get quotes for repairs that can be provided to prospective buyers. For example, if windows require replacement, buyers will often overestimate the cost resulting in more difficult negotiations.
Review your appliances. If they are very old or out of standard for your neighbourhood, consider replacements.
Gather together the warranty information for your home and appliances including the furnace and hot water tank. If items remain under warranty that is transferrable to the new buyer, let them know as this can enhance the perceived value of the house.
First time home buyers often do not have extra funds for repairs and may not have knowledge about what is required to repair various issues. Depending on your target buyer, a small investment in repairs may reduce time on market and result in a higher sale price than the cost of the repairs.
If you are planning to sell your home and wish to meet for a pre-sale consultation just give me a call at 403 850 2446. I am happy to help.
CREB (The Calgary Real Estate Board) released the official numbers for October 2011 sales. The highlights: increased sales over 2010, communities which are showing significantly increased activity and some inner city neighbourhoods showing significant increases in average price.
One number folks sometimes use as a benchmark is ‘average sale price’. While it is interesting to view as a trend, it is not a reflection that a 2% increase in average price results in a 2% increase in potential sale price of a particular home. Whether due to the construction/sale of larger and higher priced homes, the sale of luxury property or the replacement of older properties with new infill construction, the average sale price can misrepresent what a homeowner may feel is appropriate for their home. It also depends on how your home compares to similar homes in your neighbourhood. Are you the only one with an updated home or the only one who hasn’t updated yet?
A number of folks I have been working with recently have been in the ‘renovate or move’ decision cycle. The popular show ‘Love it or List it’ is all about this challenge and I think has been successful in showing the potential cost of some upgrades, but also the successes of both making a renovation work or finding that great new home. When I'm asked by folks, I often say that if your layout and location work but you want a fresh look then consider staying, but if your layout or location no longer serve your needs then it is worth a thorough look to see what homes are on market. Either way, sometimes just running the numbers is enough to help make a good decision. Obtain contractor quotes, check out current listings for home prices in your preferred area and talk to me to give you some detailed information
.
As always, if you have any questions regarding the sale or purchase of a home, just give me a call. I am happy to help.
Some notable numbers from the CREB press release:
Single family home sales totaled 988 for the month of October 2011, an 11 per cent increase over October 2010, but continue to remain well below historical levels. Year-to-date sales totaled 11,503, a 10 per cent increase over last year.
October listings have edged upwards over last year’s levels, increasing by nearly two per cent, but year-to-date there are six per cent less listings than levels recorded last year.
The average price of single family homes for the month of October 2011 was $455,399, while the median price was $395,000, an increase of two per cent compared to last year. This is primarily due to the rise in the number of luxury homes sales. Despite the monthly price increase, however, year-to-date figures remained stable at levels comparable to the previous year.
Condominium sales for the first 10 months of the year totaled 4,681, a three per cent rise over the same period last year. Inventory levels remained at 1,935 units, resulting in months of supply pushing above five months.
Condominium year-to-date average and median prices in 2011 were $288,736 and $262,500, respectively, a slight decline over the first 10 months of 2010. The decline is mostly due to increased sales in units priced under $200,000.
Move in Ready townhouse in the Mosaic Mercado in Tuscany. Hardwood floors throughout the main floor greet you on entry. The kitchen impresses with a large island and stainless steel appliances including a large refrigerator with bottom freezer, dishwasher and gas stove. The spacious dining area beyond the kitchen extends to a computer nook. The upstairs provides two master suites each with a full ensuite bath and walk-in-closet. The finished basement is a great laundry room with front load washer and dryer included as well as a large mud room or exercise room. The oversized garage includes a built-in desk/workbench. Enjoy a bbq on your private front patio surrounded by your own private garden. Located within a short walking distance to Sobeys and the Tuscany Shopping Area, transit stops, the Tuscany Club and the Tuscany Middle School currently under construction, this unit is close to both amenities and the parks and walking paths of Tuscany. Call your favourite Realtor and book your showing.
Are we getting used to a little uncertainty or do we have some confidence in our local market?
In figures released by CREB® (Calgary Real Estate Board), residential sales continued to gain momentum in Calgary this year, totaling 14,832 after the first three quarters, a seven per cent per cent rise over last year.
There seems to be more stability in single family home sales than condos, but even the condo market is seeing new projects come on line with success. I am noticing that move in ready homes are selling faster than those that need some maintenance or work, so if you are considering a sale, it is worth the time to update any required maintenance, remove some old wallpaper and show off a well staged home. All those shows on HGTV have put some high expectations into the minds of home buyers. At the same time, if you are handy, this a great time to buy that home with the fabulous layout but ugly purple carpet and pink wallpaper. You may find it is a great deal.
“Despite recent turmoil in the global economy, Calgarians are showing confidence in the long term prospects for the city and are taking advantage of affordable and stable home prices,” says Bob Jablonski, president-elect of CREB®.
“Undoubtedly, there are a lot of unknowns in the world’s current financial situation, but Calgary and Alberta may be relatively safe havens amidst this uncertainty. Granted, gains in the housing market have been very gradual—but we are seeing signs of improvement. Our province’s growth is expected to outperform the national average, and this will help buoy consumer confidence in Calgary and Alberta.”
Have you noticed the hiring signs and job fairs happening in our city. It is a sign that more great people are needed to keep up with the growth in our city. Recent announcements in the oil and gas sector as well as health care and staffing up required hospitals will bring more great folks to our city. If you have family or friends considering a move to Calgary, have them give me a call and I would be happy to introduce them to what Calgary has to offer.
Some notable numbers:
Single family home sales totaled 1,036 for the month of September, 2011, an eight per cent increase over last September. Year-to-date sales totaled 10,518 units a 10 per cent increase over last year. Monthly gains in listings brings inventory to 4,753 units, a level still lower than the previous year.
The average price of single family homes for the month of September, 2011 was $466,167, while the median price was $400,000. Jablonski indicated that while prices have marginally improved compared to September 2010 figures, on a year-to-date bases both the average price and median price have remained relatively stable.
After the first three quarters of this year, condominium sales totaled 4,314, a two per cent rise over the same period last year. “While the increase is modest, it is a move in the right direction,” noted Jablonski, adding that a boost in condominium sales, along with a lower number of listings is helping to tighten this market. At the end of September, 2011, condominium inventories totaled 2,008 units compared to 2,204 units recorded in September 2010.
Average condominium prices reached $299,508 in September, 2011, appearing to record a significant increase. However, the increase in price is not caused by a general price rise, but has been pushed up by a $4 million plus sale. In fact, both the median price of $260,000 and the year-to-date figures continue to trend lower than figures recorded last year.
As always, feel free to give me a call if you have questions about the sale of your home or a move to your great new home.
In letters sent to parents today from the Calgary Board of Education, two local schools have announced opening dates.
Tuscany Middle School (not yet officially named) will open to Tuscany Grade 4-8 students in September 2012.
As well, the attendance area for the new NW High School opening in 2013 has been announced. Located at 8777 Nose Hill Drive N.W., the new school will accommodate students from Arbour Lake, Citadel, Scenic Acres, Hawkwood, Ranchlands, Rocky Ridge and Royal Oak.
