Thursday, May 2, 2013
Calgary Real Estate Market Update - May 2, 2013
If you've been actively looking for a home or watching the sale signs, you already know what's in this update. The market has picked up pace. Especially in the lower price points, homes and condos are selling quickly. Drive around and you'll see more signs with sold stickers than those without. Multiple offers are becoming more common and the pressure to decide quickly is increasing.
Wednesday, April 3, 2013
Calgary Real Estate Market Update - April 2, 2013
What a difference a few weeks make. All those folks looking for a home, especially in the lower price points, have noticed that homes are going from new to pending or sold quicker than they were a few weeks ago. Homes are selling closer to list price, statistically speaking, and we're seeing more multiple offer situations. In some corners of the city, we're seeing a distinct seller's advantage. Many communities are now seeing an average Sale Price to Listing Price Ration of over 98% and even 99.5 or 100% as a monthly average. This has been steadily moving up over the last few weeks. If you are searching for a new home, getting paperwork in order and being prepared with preapprovals and plans is more important than ever. Those amazingly low mortgage rates, low rental availability and the prosperity in our city has had a significant impact on the residential real estate market.
Buyers that have been checking out the market for more than a few months may need some time to adjust to the new pace. In recent years, buyers had time to review all options, and take time to decide, but that is no longer the case. As the rental market has gotten tighter as well, it is a challenge for newcomers to our city. That being said, if you know about a home for rent in the NW or Cochrane that would accept pets please let me know. I'm trying to help find a family a home.
If you are selling your home and your market evaluation is more than a week or two old, then it is out of date. Get up to date information as you get closer to your list date. Timing is everything. And as always, that beautifully presented home will see more showings, more interest and a better opportunity for stronger offers.
The numbers from the CREB press release:
Wednesday, March 27, 2013
Changes to Condominium Legislations. Why you should care.
The Minister of Service Alberta, The Honourable Manmeet S. Bhullar, held a town hall meeting tonight, March 26, 2013 with thousands of Alberta Realtors to get input and answer questions regarding condo developments, condo management and the property management industry. The scope is very large. We're talking about a lot of money here. The investments of thousands upon thousands of condo owners and how those investments are managed.
It was a very interesting town hall call and I am looking forward to future changes. Until May 2 you also have a voice and I encourage you to voice your opinion.
Why you should care:
As a realtor, I want to help you sell a condo unit for top dollar with the knowledge that your building is well run and well maintained. You shouldn't have to pay hundreds of dollars to get access to documents to find out it's not when you are making a move. I want to assist buyers in finding great new homes without concern that they will find out about issues after their purchase. They should find out before so that they pay appropriate market value. Every property has value, but disclosure is the key.
Voice your opinion. Service Alberta Condominium Consultation
Thank you for taking the time, now back to our regularly scheduled programming. :)
Tuesday, March 5, 2013
Real Estate Market Update March 5 2013
The snowstorm may put a short term damper on our enthusiasm and our ability to get around our awesome city, but the real estate market in Calgary doesn't look to be slowing down.
With many folks calling Calgary the bright spot in the Canadian market, the real estate market locally is showing positive growth. With sales just a touch down from this time last year and the average pricing hitting new records, the numbers speak to the day to day reality we are seeing. The challenge right now is the lack of inventory and the very tight rental market. This time last year there were 4,843 properties for sale in the City of Calgary. As of this posting there are 3,623 listings. There are less listings at lower price points than previous years so those looking for a $400,000 home are seeing fewer options and more competition than other price points.
In terms of limited inventory, it is a bit of a wait and see game for some buyers looking for homes with specific criteria especially in some neighbourhoods. I have buyers waiting for homes in some areas to come on market and we are seeing them sell very quickly when they do. Careful consideration of price is still very important as 'overpaying' is not something most will consider.
Those people moving between properties are reviewing the buy then sell vs the sell then buy scenario in a new light in this market. As a 'subject to sale' offer is more challenging to get accepted, those people that wish to buy with the confidence of knowing where they are moving are finding it more difficult. With the lack of homes on the market in some areas, these same people are cautious to list their homes because they don't want to sell and be left without any options especially considering the tight rental market. It's a scenario we haven't seen for some time. I've spoken to a few families about this recently and much of the stress can be removed with careful review and planning both financially and also in being ready to list their current home almost immediately once we find their new home. Get packing, organizing and meet with your mortgage representative. The upside is that the current home should sell in a reasonable time frame as well.
For those interested in listing a home for sale, the average days on market have reduced and sale prices moved closer to list prices on average. I've also noticed a few more people 'testing' pricing and the market. Buyers are still doing careful market evaluations (as are their lenders during appraisals) so the test will be quickly evalutated.
The condo market has stabilized now as well with positive growth shown both for apartments and townhome style properties. Careful review of condo documents and projects remains a must even in a tighter market.
Friday, February 1, 2013
Real Estate Market Update - Feb 2, 2013
CREB officially released the January numbers today: Residential real estate sales in the city of Calgary started the year on a positive note, increasing by 15 per cent over the same month in 2012. Pricing has moved up. Pace has increased a bit.
The vibe is that there just aren’t that many listings out there and they are lower than we are generally used to. Don’t get me wrong. There are listings, but buyers have been used to selection and get a little anxious when they go to look and there are few properties that match their search criteria. It is to be expected this time of year after a couple months of holiday/winter inventory levels.
I have noticed some quicker movement in the sale of some properties, especially those appropriately priced and prepared for sale. The lower price points see this more as the lack of rental inventory is causing more people to look at home ownership. This is less true in the middle zone. Luxury and estate homes sales records continue to peak as we are in Calgary after all.
That being said, I just sent a number of new listings today to one buyer, all of which were posted this morning and early afternoon. If inventory stays low, we’ll see some buyers making quicker decisions. If inventory starts to climb a bit, things should remain rather balanced. As always, real estate sees an ebb and flow and timing can be everything.
Last year, a bit of the same trend happened early in the year and then things balanced out. Hopefully there are no more changes to lending policies this year and we can see a more consistent pattern in trends. It seems though that we are looking forward to growth in the Calgary market in terms of price and activity.
We live in a great city. If you need some help finding a place to call home, then give me a call. I’m happy to help.
Thursday, January 3, 2013
January 3, 2013 - Calgary Real Estate Market Update
The real estate numbers for 2012 will be widely distributed as they show a marked increase in activity vs 2011 with a sales volume increase of 15%. Benchmark numbers indicate strong pricing adjustments vs 2012 and continue to point towards a stabilization and growth in our market. The next question is then what is in store for 2013?
The Calgary market is dependent on the energy sector and the resulting affect on need for workers, housing, commercial space and then retail, coffee shops, restaurants, etc. While other parts of Canada are showing slowing numbers we continue to see a growth in our economy and also very low rental vacancy rates. These trends point to increased demand on housing which most often results in an increase in pricing. However, it all depends on how strong the ongoing growth pressure is.Opinions vary strongly as to the growth potential for 2013. While some are calling for strong increases relative to 2012, many others are projecting more conservative growth of 2-3% while others are calling for the sky to fall. It's interesting negotiations when these folks are on opposite ends of the table.
Please don't read this to mean that you can now go out and ask 5-10% more for your home than last year. The averages and numbers are influenced by a higher sales volume in the luxury market which pushes up the average. As well, some areas of the city saw higher price increases last year while others saw declines. An average is just that and is not a reflection of the percentage point expected increase for any one property. The market remains balanced which means that buyers have choice. They understand value.
Condominium and townhouse sales are also gaining momentum, however, buyers are carefully reviewing condo documents so stay connected and ensure your building is being well managed. With many new projects underway in the city, there is choice so take your time and happy scouting.
Tuesday, December 4, 2012
Calgary Real Estate Market Update - Dec 4, 2012
If anyone was out looking at houses this weekend, they must have been rather serious about buying a house. I mean, who else would brave inches of snow, freezing temperatures and icy streets.
Nearly eight consecutive months of double-digit, year-over-year sales growth has caused inventory levels to decline because new listings have not kept up. However, the ratio between sales and inventory indicates the market remains in balanced territory.
Saturday, November 3, 2012
Calgary Real Estate Market Update - Nov 3, 2012
Calgary's residential real estate market continues to show positive growth.
City of Calgary sales activity marked a 23-per-cent increase over levels recorded in October 2011. The continued improvement in sales has pushed year-to-date sales activity to nearly 16-per-cent above levels recorded in 2011.
The detailed CREB statistics reports outlines the details, but the coles notes version is that while there is uncertainty in Vancouver and Toronto, Calgary real estate continues to remain at balanced levels and forecasts predict slow and steady growth. The positive economic outlook in our province, along with very low interest rates and a tight rental market may be encouraging people to look to home ownership. (Yes, a buyer can currently lock in at a 2.99% 5 year mortgage rate.)
Speaking of 2.99%, there was a great article in the Globe and Mail that came out a few days ago that is worth a read: Pay your mortgage like it's 2007. You'll save a pile of money.
Something that the statistics don't show is the coming trends due to demographic changes which will impact the demand for different property types. A preference for bungalows vs split levels or villas vs multi level townhomes won't reflect in average statistics but the slow change is one to note. When renovating your home, especially for resale, these trends are worth considering. I recently saw a gorgeous bungalow. It was perfect for my clients until we reached the master ensuite. There was a raised tub and shower area which required 2 tiled steps to access the tub and separate shower. I think it was meant to provide easier access to the tub, but it was a deal breaker.
Notable numbers from CREB:
The strong demand for homes relative to the supply levels has caused some significant increases in the price of single family homes this year compared to 2011. As of October 2012, the benchmark price for a single family home was $433,300, an 8-per-cent increase over the previous year. While there has been significant recovery in Calgary home prices, typical unadjusted home prices have leveled off remaining relatively unchanged over the past 4 months, and remain below the highs recorded in 2007.
Condominium apartments recorded a benchmark price of $247,000 in October 2012, losing some ground over the previous month, but still higher than the previous year by 3 per cent. While on average condominium apartment prices have fallen more than risen since 2007, condominium prices this year have recovered to levels comparable to 2010.
After the first 10 months of the year condominium townhouse sales totaled 2,279, 16-per-cent higher than last year. The benchmark price for a townhouse in October was $279,000, a 3-per-cent improvement over October 2011.
Questions about the market or your future sale or purchase. As always, feel free to contact me.
Wednesday, October 3, 2012
Real Estate Market Update - Oct 2, 2012
We have had one of the nicest September months on record. As summer has drifted into fall and snow is around the corner, there is a window of time where people realize they may want to move now rather than wait out the winter before purchasing or selling their home. A sales surge during this time is not unusual. There is a general slowdown in the market as we move towards the end of the year, but as the number of buyers drops, so does the number of listings. If you are one of the few properties on market while people continue to move to Calgary as our economy grows, then you may be able to take advantage. My experience has shown that folks who are out in -30 degree weather looking at homes are typically motivated buyers.
If you are considering the sale of your home over the winter months or early in the spring, now is the time to make any required repairs. If your entry or front porch needs a touch up, taking care of that now is the best time to make sure it shows well when you are ready to move forward. Consider window maintenance, a roof assessment if your roof is wood shake or over 10 years old and review any servicing needed for appliances, furnaces, sprinklers, etc. If you selling a condo, get an early start on collecting condo documents from friends in the building if you haven’t kept your copies.
The general statistics for Canada are showing a decline in the real estate market, however, Calgary is one of the bright notes with continued improvement in year over year sales. Our market is again 'balanced' in an overall sense with pricing remaining level for the most part for single family homes and a slight upturn for apartments and townhouses.
We live in a great city. Get some advice for your purchase or sale so you can enjoy your home and enjoy everything Calgary has to offer.
Thursday, September 6, 2012
Real Estate Market Update Sept 2012
So September has arrived and many people are returning from holidays, packing up campers and enjoying the end of summer. August was a slower month, as is usually, as so many residents take every opportunity to take advantage of the many adventures Calgary and Alberta have to offer. In the recent week or so, however, many people are back focusing on a potential move and activity has again began to pick up and that trend is also a seasonal expectation.
Depending on how you slice and dice numbers, the averages and medians, benchmark prices and indexes, the general trend of positive growth holds true. Sales are up from last year, though slower than previous months, and prices are up in many areas. An average across the board shows a very small adjustment, while specific areas have seen larger increases.
To understand the differences, we should consider what is fueling the real estate market. It is jobs and economic outlook. Most newcomers to a city want a move in ready home near a good school for their children and near good transportation options to work and community gatherings. Newer homes that are well presented are doing very well in this market as are homes that provide the layouts and functions expected by busy families. I personally am finding that homes that require a remodel, especially at a higher price point, are more challenged in finding as many interested buyers. Other buyers are pursuing condo options and walkable communities so areas in the inner city are also seeing stronger growth patterns. Interestingly, the lack of inventory in some parts of the city have resulted in a strong growth surge in Calgary's surrounding communities.
The rental market has also gotten very tight. I personally know of families looking for rental accommodation the NW and are finding it hard to find. This lack of rental inventory is driving up rental prices and some renters are reviewing the rent vs buy option and looking to home ownership instead instead of $1500 per month rental costs.
With mortgage rates remaining very low and the summer sun fading, September is expected to be a busy month.
Thursday, August 2, 2012
Real Estate Market Update - Aug 2, 2012
With new mortgage rules there was much speculation about the effect on the real estate market. The result last month: "Calgary continues to buck national housing sale trends. The 1,936 residential units sold in July represent a 21.3-per-cent increase over 2011."
Vancouver and Toronto are starting to see the declines in homes sales, but not Calgary. For those moving here from those markets, it will be an adjustment.
Year-to-date City of Calgary sales totaled 13,684, a 16.5-per-cent increase over the same time in 2011. Other sectors within the city limits have also recorded significant growth. The single-family market recorded the largest gains at 18.9 per cent, while the condominium apartment posted a 9.4-per-cent rise year-to-date.
The mortgage rule changes have had one effect that has not been that widely discussed. The impact is on those moving between properties and potentially purchasing a property prior to selling their existing home.
Many people use the equity in their current home to use as a down payment on their new home in order to avoid CMHC fees on their new mortgage. As refinancing of the current home is now limited to 80% of value, some people may not have access to the 20% and may reevaluate timing in order to move forward.
Time will tell if this change will increase the number of `subject to sale`offers in the mid to upper price points.
The challenge of `buy then sell` or `sell then buy` is different for everyone. Some people can`t sleep at night holding two properties while others can`t sleep at night if they do not know where they are moving. This appears especially true for families or those looking for unique or harder to find property types.
Notable Numbers from the CREB stats package:
Single family inventory levels were 3,646 units in June, nearly 20-per-cent lower than supply levels recorded in 2011.
Lower inventory, combined with increased sales, has resulted in stronger-than-anticipated price gains. The single family benchmark price reached $432,400 in July, a 7.8-per-cent increase over 2011, but on average only 5 per cent higher on a year-to-date basis. The increase in price has narrowed the variance from the peak of the market, but a 4-per-cent price gap remains.
Both the condominium apartment and townhouse market recorded year-over-year benchmark price gains of 2 per cent in July, for respective prices of $247,600 and $277,400.
Friday, July 6, 2012
Calgary Real Estate Market Update July 6 2012
June was an eventful month in real estate here in Calgary and in Canada. With sales and pricing continuing to show upwards trends in June, the end of the month saw the announcement of new mortgage rules to be very shortly implemented throughout Canada. The CREB stats package is an indication of what was last month but there is much speculation about future trends ranging from very negative to generally positive. Some folks are speculating about which price points will be most affected by the changes, while others about which areas of the country may see no affect at all.
What does that mean for the average buyer and seller? I think it depends on your personal situation and your needs. If you are considering a purchase for your personal home that you plan to live in for many years than month to month fluctuations aren't going to change that. It may make folks reevaluate how much they want to spend, but that should be something all homeowners carefully review anyway. Sellers need to keep an eye on the market and work with a realtor that will keep them up to date on events so they can adjust plans accordingly. Some areas of the city continue to see low inventory so an aggressive plan would be appropriate vs other sectors that require more finesse.
The interesting note to watch is the Calgary rental market. We are seeing low vacancy rates which have been trending down for some time, an increasing local population and now changes to lending rules. If more folks decide to rent and the resale market sees a dampening especially at the lower price points, it may be an opportunity for some investors with the ability to purchase to take advantage of the trends.
As always, selling or purchasing real estate is a big decision. Work with someone that has your best interests in mind.
Notable numbers from the latest CREB statistics update:
Single family monthly sales reached 1,609 units in June, a decline over the previous month, but 16 per cent higher than levels recorded in June 2011. However, new listings are declining as consumers appear to delay putting units on the market until they see further price recovery. Despite the decline, with a current inventory of 3,817, the supply constraint has eased and the single family market is moving towards more balanced levels.
Thursday, June 21, 2012
Important Mortgage Rule Changes
Today, June 21, 2012, the Department of Finance announced upcoming mortgage rule changes. If you are in the process of purchasing a home you will need to contact your lender to review how these changes will impact you.
Changes quoted from the announcement:
The Government is announcing four measures for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent:
It is noted that changes come into effect on July 9, but we are expecting more details shortly regarding the implementation process for these new changes.
Sunday, June 3, 2012
Real Estate Market Update - June 2, 2012
May 2012 residential sales in the City of Calgary increased by 31.8 per cent over last year, to 2,385, making it the highest May activity since the recession.
Now that is a statement.
It has been a very busy spring market and the recent activity has reduced the average days on market and increased the list to sale ratios meaning folks are buying quicker and at closer to asking price. There has been an increase in prices and the average numbers and benchmark numbers are in the CREB statistics packages in detail for various property types and price ranges.
Now that we have seen an increase in prices, it will be interesting to see the seller response in terms of new listings. The general feeling is that we are on a positive course in a balanced market, but not at risk of the boom price jumps of 2006/2007.
An important item to note is that many new home builders that had multiple spec homes available last year now have limited quick possession properties available in some areas. The absorption of that available inventory is not reported in MLS statistics.
The positive economic outlook for Calgary has much to do behind the positive numbers which are the envy of many other parts of Canada. If even half of the recent headlines regarding job prospects and economic growth are true, we have a very positive future ahead.
Sunday, June 3, 2012
New Property Status Introduced Yesterday - Status "U" - Under Contract
On June 1, 2012, the Calgary Real Estate Board introduced a new property status. If you receive property updates from a Realtor, you may see this new status which displays as "U" - Under Contract.
Current status types include "A" for Active, "S" for Sold, "E" for Expired and others. There is currently also a "P" status for Pending. P for Pending and U for Under Contract differ in the following way.
Status "U" - Under Contract. U status means that the seller has accepted an offer to purchase and the property is conditionally sold. The property is still available for showings and will display as available on realtor.ca. The conditional contract details will not be revealed.
Status "P - Pending. P status means that the seller has accepted an offer to purchase and the property is conditionally sold. The property may or may not be available for future showings and the property will no longer display on realtor.ca. The conditional contract details will not be revealed.
As sellers no longer have to disclose if an offer has been accepted, some active listings, Status "A", may also be conditionally sold.
A little confusing? Maybe, but in the end the new addition allows for sellers to communicate to other Realtors that a property is under contract, but still allows for the property to be actively marketed until the current deal is firm. As a buyer, it is important to understand these changes and decide which properties they wish to pursue.
Give me a call if you are interested in purchasing a new home and I will do the research to meet your goals.
Thursday, May 3, 2012
Calgary Real Estate Market Update - May 2, 2012
Calgary residential sales total 2,200 for the month of April, a 26 per cent increase over levels recorded last year!
My personal experience over the last month is that sellers that are appropriately priced and well presented as selling within a short window with multiple offers becoming more common. Sellers can use pricing strategies to their advantage in ways that weren't possible for some time.
Staging has improved the bottom line for many of my sellers recently. Buyers are looking for value and are still adjusting to a market that is moving quicker than before. Buyers are still carefully reviewing comparables and prices and some even have concerns about potential negative impacts on the real estate market by changes to CMHC and other national pressures. Although statistically we are moving towards a sellers market, buyers still have many options. That being said, good homes are moving so buyers need to be preapproved and educated before submitting an offer.
Interest rates are low. Employment and migration numbers are strong. Momentum is building. The new index and benchmark pricing information is showing a positive increase in property price as are more traditional values. Regardless of the overall numbers, a review of comparable listings and sales will give you the information you need to understand pricing trends for your sale or purchase. Where will prices move? It depends on the ebb and flow of new listings. Many sellers have been waiting for a price increase before listing so we will see how the market adjusts to this recent sales surge.
Some notable info from the CREB press release:
Tuesday, April 3, 2012
Calgary Market Update - April 3, 2012
Spring is here and so is the start of a brisk season in the real estate market in Calgary.
City of Calgary residential sales continued to rise in March 2012, reaching 2,167 units, an increase of 12.6 per cent over last March. Single family home sales are now in a balanced market while condos still remain in a buyer's market.
Buyers generally are finding that well presented, appropriately priced homes are selling quickly and there are more multiple offer situations. Sales and price increases are reported on average across the city, but there is significant variation between communities and property types as always.
As some people have been waiting for the market to turn before they list their home, the balance of new supply and buyer demand will create an ebb and flow over the coming months. It is important for sellers to review the comparable sales in their area, to price appropriately and to present their homes as best as they can to achieve a higher sales figure. Buyers quickly see the difference between homes priced to market and those 'testing the market'.
As more sellers are reviewing multiple offers, it is essential for both to be prepared. Getting paperwork, financing, condo documents, RPR's and other information ready to go will set you up for a successful transaction.
Notable numbers from the CREB press release:
As always, feel free to give me a call with any questions or comments.
Sunday, March 4, 2012
Real Estate Market Update March 3, 2012
The Calgary Real Estate Board (CREB) have released their February numbers along with many new stats associated with the new Home Pricing Index (HPI). The numbers confirm what we have been seeing in the market and that is increased sales compared to last year and a quick start to the spring market. Multiple offer situations are increasing and some amazing properties have sold so quickly they didn't even make it to the public MLS system.
The increase in sales has been coupled with lower inventory numbers from last year. Some areas of the city have very little inventory so new listings see a lot of attention. Buyers are saavy and been experiencing a buyers market for some time so the value must still be there for sellers to realize a sale. Within Calgary, we are now in a balanced market in a general sense for single family homes and still in a buyer's market in the condo market.
The stable growth in our area has been predicted and expected to continue throughout this year and into 2013 and beyond. The federal government is however, reviewing additional changes to mortgage rules so we are expecting a slow growth in prices rather than a sudden surge.
What does all this mean to sellers and buyers?
Sellers: A focus on clean, well presented homes will continue to add to the bottom line. It has been a buyers market for some time so the shift will be slow and appropriate pricing is necessary. Many current buyers are first time buyers or folks moving to Calgary in support of our strong economy. They are looking for move-in-ready homes so take the time to make yours stand out.
Buyers: Preparation is needed to recognize a great value when you find it. Buyers need to have their financing pre-approved and be prepared to make an offer as the days on market are reducing and multiple offer situations are becoming more common.
An interesting note is that I am seeing more developers/professional renovators back looking for property. They have been absent for a while, but now see the potential in redeveloping older homes.
As always, give me a call if you are ready to make a move.
Some numbers from the CREB press release:
Single family sales and condominium townhouse sales were the bright lights in the city of Calgary, while condo apartments continue to lag in volume of sales. There were 1,284 single-family homes sold in February 2012, a 10.9-per-cent increase over last-year figures, and a 5.6-per-cent year-to-date increase. Condo townhouses gained 11.4 per cent year-over-year in February sales.
Meanwhile, condominium apartment sales totaled 248 for February 2012, an 11.7-per-cent decline over last-year figures. Despite the 12.7-per-cent year-over-year decline in new listings, inventory levels rose to 1,031 units.
Fewer new city listings are coming to the market, with a year-over-year decline of 10.2 per cent. Inventories also fell by 8.5 per cent over last year’s figures, with a total inventory of 4,736 for the month. The opposite is true in the surrounding towns, where listings recorded a year-over-year improvement of 12.1 per cent and no significant change in inventories.
Pricing showed modest improvement in February 2012 over January, with the single-family MLS® Home Price Index increasing by 1.0 per cent after several months of relatively flat pricing. Single-family prices rose by 3.2 per cent over February 2011. While prices continue to remain below peak levels, the improvement points to stable price growth.
The apartment index rose by 2.1 per cent over January figures, and increased by 0.7 per cent over last year’s levels. Prices remain well below peak levels, but are trending into positive territory, pointing towards recovery in this market. Overall index levels for townhomes remain similar to levels recorded in January 2012.
Despite the variances in the specific property types, all indicators in the Calgary region continue to point towards stable growth in Calgary’s overall housing sector.
Thursday, February 16, 2012
Saving Money on your Mortgage: Dual Benefit of a Low Rate
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
Wednesday, February 1, 2012
January Calgary Real Estate Market Update - Stability is the word of the day
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'.