The Edmonton Real Estate Blog

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Thursday, March 30, 2006

Canada's Hot

Well at least our real estate market is. The Edmonton housing market is on fire with a 22% annual increase in the average price since last February. The current average price for a residential home in Edmonton is $250,000. Yep. That's the average and its growing fast. The following discusses the Canadian real estate market which is just a little unnder the Alberta redline.

Canadian existing-home sales via the Multiple Listing Service rose to their fifth-highest seasonally adjusted monthly level on record in February, and average prices hit new highs, according to statistics released by The Canadian Real Estate Association.

According to CREA's statistics, seasonally adjusted MLS home sales in February rose by two-tenths of a percentage point to 41,555 units compared to the previous month. A monthly increase in sales activity in Ontario and Quebec more than offset a decline in transactions in British Columbia. The number of MLS home sales in the first two months of 2006 are running 10.7 percent ahead of levels posted during the same period last year, CREA reported.

Sales activity reached its highest monthly level on record in Alberta, and set new records for the month of February on a national basis and in Manitoba, Ontario, New Brunswick, Nova Scotia, and Newfoundland.

Seasonally adjusted MLS residential new listings declined by one half of a percentage point to 64,382 units in February compared to January. The small decline in new listings and small increase in sales caused the national resale housing market to tighten slightly in February compared to the previous month.

The minor tightening of market conditions does not explain the large gains in national MLS residential average price, which shot up to $268,215 in February compared with $258,274 in January, CREA reported. The monthly average price increase of 3.8 percent was the second-largest gain posted in the last 15 years, and is attributed to large monthly price gains in British Columbia, Alberta, and Ontario. Average price was also up 12.3 percent compared to levels recorded in February 2005.

MLS residential average price reached its highest monthly level on record nationally, and in British Columbia, Alberta, Manitoba and Ontario. Average prices set new records for the month of February in all other provinces.

"The resale housing market remains tightest in Western Canada," said CREA Chief Economist Gregory Klump. "A shortage of homes available for sale and the continuation of strong resale housing demand in Western Canada are resulting in substantial price increases there."

"Although the national resale housing market has so far shown few signs of slowing, rising interest rates and home prices are expected to gradually slow resale housing market activity this year," Klump added.

Wednesday, March 29, 2006

Neighbourhood Report: North Glenora, Edmonton

The graph to the left compares the list price and sale price of 10 homes that sold in North Glenora in 2006. North Glenora is a popular community in West Central Edmonton. The graph is an excellent example of how pricing your property can affect the sale price...

As you can see, the first property sold significantly below list price (about $10,000 below, and $30,000 below the original list price) after sitting on the market for over three months. Compare that to the 7th property that sold after only two days for $17,000 over list price.

It is likely that the 7th property attracted multiple offers because it was priced smartly, thereby probably getting more money in the end than if they'd listed $20,000 higher.

At Coldwell Banker Johnston we provide our sellers with a comprehensive market analysis to help them price their property smartly. Remember, listing price is always the home owner's choice, making an informed decision on who represents you and how is your first step to a successful sale.

Get a free online home evaluation at www.edmonton-homes.ca.

Moving to Alberta?

That's ok you are not the only ones. Stats Canada reports that a growing number of people are moving to Alberta for a number of reasons. Here in the Edmonton area we are seeing a large number of those people. If you are moving here you need someone is in constant contact and has experience in this market. You need someone who has your interests in mind. We'd like to apply for the position of your life long Realtors. Our Ultimate service promise guarantees our commitment to you. You can search for everything you need on our website. Neighborhood information for all Edmonton communities, you can search all MLS listings and much more. Just visit www.edmonton-homes.ca for all your real estate needs. Below is an article from CBC online about the stats can report.

Alberta's population grew by more than 25,000 in the final three months of last year, Statistics Canada reported Tuesday.

"Record numbers of people flocked to the booming province from other regions of Canada," the agency said. "Only during the oil boom period of 1979-1980 was there similar growth."

Two-thirds of the new arrivals came from other provinces.

The population is growing faster than builders can finish homes in some areas, and is pushing real estate prices through the roof.

Oilsands boomtown Fort McMurray considered setting up work camps to handle the influx of incoming workers.

As people move to Alberta, the population in other provinces and territories fell.

"Seven of Canada's 13 provinces and territories experienced a decline in their population during the fourth quarter," StatsCan said.

It's only the second time in 35 years that so many regions reported a drop in population during the same quarter.
Aside from Alberta, only British Columbia and Nunavut reported growth above the national average. Ontario, Quebec and Manitoba also grew.

Newfoundland and Labrador lost 2,300 people to about 514,400.

With the new arrivals, Alberta's total population is more than 3.3 million.

In some provinces, immigrants helped offset the population loss to Alberta.

Canada took in 55,400 immigrants in the quarter, the second-largest quarterly gain since 2000.

Tuesday, March 28, 2006

Neighbourhood Report: Wild Rose & Larkspur

We recently sold a half duplex for over $8600 more than the average selling price for 2006 half duplexes in this area! Larkspur and Wildrose are seeing extremely quick sales; the average number of days on market for half duplexes in this area is 6.6 days, while the Edmonton market as a whole is 34 days.



If you are thinking of selling contact Coldwell Banker Johnston for Ultimate Service.

Neighbourhood Report: Jasper Park, Edmonton

Coldwell Banker Johnston Real Estate now offers neighbourhood reports to our web site visitors. Just go to www.edmonton-homes.ca and click on neighbourhood reports, indicate the neighbourhood you are interested in and we will send a report of recent sales in the area including number of days on market and sale prices. As reports are requested we will also post some of the information from the reports here, on our Edmonton Real Estate blog.

Jasper Park: there is a very large demand for homes in this area. The chart below shows the sales of single family homes in the area in 2006. As you can see, sale prices are very close to list prices and, with the exception of one property, are selling very quickly.

Contact us today for more information.

Monday, March 27, 2006

Edmonton homes website


Spring is in the air in the Edmonton and area real estate market. So in the spirit of keeping things fresh our award winning website www.edmonton-homes.ca has been revamped by our marvelous marketing and technology department (Sara). Its fresh new look is very consumer friendly.

Check out our new features to as we expand to service all your real estate needs.

  • (New) Neighbor hood reports that will give you historical information on an area you are interested in.
  • (New) And lastly the, How much it sold for tool. If you have a neighbor who sold their property on MLS or not, or you were interested in buying a home in the Edmonton area and now want to know what someone else paid, we can answer that question for you.

5 tough questions a buyer can't afford not to ask

Even in a market as hot as Edmonton, nay in any market there are at least 5 questions a buyer should know the answer to. Some of these we can easily answer since we have access to a tremendous amount of information. I strongly recommend you consider asking these to us, your agent or the seller directly. However caveat emptor applies. Except for Latent defects the seller is under no obligation to disclose information correctly to you. It is the job of your brokerage to verify the answers to your questions. Here we go. Sellers you should be prepared to answer these.


1. Why are you selling this lovely home?
The buyer wants to know just how desperate the seller is. Desperation equals a lower offer, so answer carefully.

2. How much did the seller pay for this house?
The amount is a matter of public record and a real estate professional can find it easily. In the Edmonton area market the answer to this may indeed be irrelevant, but it may prove to be very relevant indeed. At Coldwell Banker Johnston we have 24/7 access to land titles. This enables us to verify the purchase price and date according to the title.

3. What defects does the home have and have there been any recent professional home inspections?
In many cases the sellers had an inspection report done when they purchased. Their report will have outlined some things they were to have done. Many sellers will have at least begun work on some of those things. This may indicate to you as a buyer what level of pride and maitenance the owner undertook.

4. What problems have you had with this home?
In most cases sellers are not required to reveal patent defects. As a buyer it is up to you to do your due dilligence in determining what defects there are. There is the exception of latent defects however since I am not a lawyer and I am not giving legal advice I suggest you contact your lawyer to review this concept with.

5. What other properties in the area have sold recently?
Not only should you ask for this information we will review it with you. So that you can make an informed decision about the home you are buying.

I have often explained to my buyers that there is no such thing as a bad questions. So ask, ask, ask.

For all your real estate needs in the Edmonton market area contact us directly at 780 486 8655 or by email
Source: Inman News, Robert Bruss (3/24/06)

Saturday, March 25, 2006

Alberta Lake front for sale

Incredible opportunity to own 145+ feet of Prime Lake front property only 1 hour North West of Edmonton on fully paved access. Property includes a beautiful 2900 square foot two story home that is loaded with extras. Click here for more details.




Screening for tenants in Edmonton

Do you own a rental house in the Edmonton area. Maybe you recently renovated it and now want to rent it to tenants. Maybe you've had previous long term tenants. Maybe you were not the most diligent landlord and they took advantage of you. This time you want to screen prospective tenants and want to know the best way to do that?

Qualifying a rental tenant isn't difficult. Of course, insist on a written rental application and a deposit that is fully refundable if you don't select the applicant. That may help weed out the less serious applicants. Of course this depends on the rental market or vacancy rate in your area.

It is perfectly legal to take several applications for the same rental, check each applicant, and select the best-qualified applicant. Then promptly refund the deposits of the applicants you don't accept. Of course, the first step is to verify employment and income.
Next, be sure to get a credit report on all applicants. Better yet, ask all applicants to supply their credit report which they can obtain for about $30. through equifax. We do offer a rental check service for our investor clients. For more information on this please contat us by email or call us at 780 486 8655.

However, be sure to also phone the applicant's two or even three previous landlords to inquire why the applicant moved out. My experience is landlords are usually very truthful on the phone (except perhaps the current landlord who might want to get rid of the applicant).
My final question to prior landlords is always, "Would you rent to this tenant again?" You will instantly know if you found a good tenant. You may also want to engage the service of a professional property manager to do these things for you.

Wednesday, March 22, 2006

35 years to life

No this isn't a prison sentence. If you are a first time homebuyer, it may feel like one though. It is not uncommon in Europe for mortgages to be generational and the way housing prices are going in the Edmonton area this well help some buyers get into the escalating market whilst maintaining some sustainable payment level.

Friday, March 17, 2006
PATRICK BRETHOUR - From Friday's Globe and Mail

CALGARY — The 35-year mortgage has arrived in Canada, giving overstretched first-time buyers the chance to plunge into the heated real estate market -- for the long term. But it might just mean that they end up making the last payment from their Canada Pension Plan cheques.

In Canada, the 25-year mortgage has been the standard maximum, but the rapid escalation of housing prices has now shattered that previously ironclad limit. Genworth Financial Canada said yesterday that it will start insuring 35-year and 30-year mortgages, trumping a move by larger rival Canada Mortgage and Housing Corp.

CMHC said three weeks ago that it would begin to insure 30-year terms. Both firms charge fees to insure low down-payment mortgages provided by financial institutions, but do not lend money directly.

Tuesday, March 21, 2006

Alberta tax cuts and budget

Yesterday in Edmonton, King Ralph (The moniker for the popular 4 term premier of Alberta) made some announcements regarding the upcoming budget and planned tax cuts for Albertans. The fortunate people of Alberta will continue to prosper at least for now and that is very favorable to the Edmonton real estate market and housing prices and demand in the Edmonton area.

Check out the article from the Globe and Mail here.

Monday, March 20, 2006

Are you getting the best online marketing?

If you are considering selling your property, consider your options wisely. If you already have an agent or brokerage in mind, are they able to offer the best online marketing for your home? Everyone claims to have the best technology - who cares? Here's why you'll get more for your money by hiring us for all your Edmonton and area real estate needs.

We've hired one of the best marketing and technology people in the real estate business. So not only are you getting 3 agents for the price of one, you are getting full time marketing and technology experience from one of the industry’s best and brightest Sara Maclennan

We also think we have the best real estate shows in the business. These are in addition to our online pictures and virtual tours that on their own are better than the most in the industry. Compare www.realestateshows.ca to what other agents are offer. You be the judge, after all it is your money. These shows have a major emotional impact on the buyer and gives your home the professional representaion it deserves.

Our award winning website www.edmonton-homes.ca is just one of our many online portals to our clients' listings. Our listings can be found on

www.edmonton-homes.ca
www.realestate-edmonton.ca
www.alledmontonhomes.ca
www.teamjohnston.com

www.mls.ca
www.coldwellbanker.ca
...and hundreds of other agent's sites through our affiliations with Coldwell Banker, Point2Agent and the Edmonton Real Estate Board.

Our real estate blog is the most popular and one of the first in Edmonton. A blog provides information to buyers and sellers who are interested in the current state of the Edmonton area real estate market. We built this blog as part of our effort to stay on top of trends that affect our market place and we have thousands of visitors come to our blog for this information. Our blog has brought us buyers from New York, Las Vegas, Sweden and the United Kingdom, to name a few. We give full access to information and buyers have rewarded us with their loyalty.

So when you have a moment, compare how we market our listings to what any other agent offers does, then give us a call. Our family business always has room for another special client.

Call us today and let us show you how we can benefit you. 780 486 8655 or toll free t 1 888 336 7356

New Snowfall Record for March - Still a Few Days Before Streets Cleared

According to CBC news, it will be 4 days before all the streets in Edmonton are plowed...

City officials in Edmonton are working as quickly as they can to clear snow after Saturday's late winter thumping that set a new snowfall record for March.

Most buses were on schedule by Monday but about 20 buses were caught up on unplowed residential routes in the north and south ends of the city. The LRT was running fine.

City officials relaxed the parking ban along designated snow-routes. Usually, parking is prohibited along major roadways so crews can clear the street right to the curb.

Cleaning crews are more concerned with getting traffic lanes cleared as soon as possible, said Barry Belcourt, of the City Transportation Department. The total cost of cleaning up could reach $2.5 million.

Broke 1967 record

The blizzard easily broke a 1967 record for the snow in March. That record had been a meagre 9 cm.

The snow clearing started off slowly. When the city put out a call for more equipment and operators, less than half the usual number showed up. They were already working elsewhere.

It could be four days before all residential routes are cleared, Belcourt said.

"If I was to take equipment and put it into residential, then there is no equipment to deal with the bus runs. So you would get out of the residential and you wouldn't be able to get out the bus runs to get to the main road," he said.

Snow brought out community

Not everyone was put out by winter's final desperate act to leave its mark.

On a CBC radio phone-in line, people reported all sorts of neighbourly moments brought out by having to shovel 22 inches of snow to get anywhere.

"I played in the snow all weekend. And I made some tunnels, and I went tobogganing. I made a fort. I love the snow!" said an exuberant girl named Alicia.

Another caller described an impromptu group effort to clean the streets the old fashioned way.

"In our neighbourhood, something surprising and encouraging happened sort of spontaneously. All of our neighbours that lived up and down our block helped each other in shovelling out the snow in front of street so that we could all have places to park and not get stuck."

Yet another female caller told how members of her co-op pulled together to shovel out. Many cars were pushed, laughs were had, while children played all around.

"I quite enjoyed the snowfall, and I think it was about time that we had one. Now if it will just go away so we'll have a good spring, that would be great."

Sunday, March 19, 2006

What A Furnace Filter Can Do For You

Traditionally, furnace filters were designed to protect the furnace and fans. With increased air quality awareness, some filters are now being installed to reduce exposure to particles which can affect your health.

There is a wide variety of furnace filters available. However, you may find it confusing to select one which is suitable. This document from CMHC provides you with guidance when selecting your furnace filter.


How to Choose a Contractor

At some time, most homeowners will hire someone for repairs or renovations. Even a homeowner experienced in home repairs may have to hire a contractor or renovator because of the size or level of difficulty of the job. This fact sheet from CMHC will help you choose a contractor and work effectively and fairly with the contractor to achieve the results you desire.

Tuesday, March 14, 2006

Western Canada leads the world in hiring intentions

Exceprts from an article from the Edmonton Sun below show that the West is Best for those that want to work. Over half of western Canadian employers plan to hire this spring, leading not only Canada, but the whole world:

"Things are probably a little stronger than people anticipated in our last survey," Manpower vice-president Dan Luft said on Monday. "The challenge is to fill vacant positions."

The outlooks are plus 47 per cent in Edmonton, 67 per cent in Red Deer, 60 per cent in Calgary, 45 per cent in Vancouver, 53 per cent in Saskatoon, 50 per cent in Regina and 37 per cent in Winnipeg.

"Heavy-duty mechanics, pipefitters and welders are the three biggest-demand skills for now," Luft said of the local market.

Engineers are needed. So are accountants, "even for higher positions, such as chief financial officers and controllers," he said.

To serve clients in Western Canada, "we're working with our 54 offices across the country," Luft said. "We had to fly to Toronto and make a presentation on the oilsands before it hit home."

As easterners and central Canadians become more aware of western activities, more will consider careers here, he hopes.

But job markets are strong across the country, and Western Canada also must recruit workers from abroad, Luft said.

The Canadian employment outlook is plus 29 per cent.

Worldwide, Canada trails only Japan, at 43 per cent, and India, at 40 per cent -- all below the western Canadian outlook. The European outlook ranges from minus one in Italy to plus 17 in Spain.

Of the 10 industry sectors surveyed, the most brisk results were in mining, followed by public administration, then finance, insurance and real estate, and wholesale and retail trade.

Monday, March 13, 2006

Do it yourself staging - Money in your pocket

One of the most valuable services we offer to our clients in the Edmonton area is assistance in staging their homes for sale. When requested, we will make recommendations to improve your home's value. Not only will we provide recommendations, we will provide the necessary referrals to professionals that maybe needed in order to properly stage your property. A properly staged home will sell sooner and for more money. It has been our pleasure to offer this service to our clients in the Edmonton area for the past 42 years.

Sellers shouldn’t look at the cost of staging a home. Instead, they should consider how much more it will allow them to make on their house, says Peggy Selinger-Eaton, who has recently published a book and DVD entitled, Stage Your Home for Profit.

Here are Selinger-Eaton’s suggestions for do-it-yourself stagers:
  • Remove clutter except for a few wisely chosen accessories (candles, fresh flowers, crystal).
  • Bedrooms should have beds: If you're a bed short, use an inflatable mattress and some boxes to create a faux bed.
  • Light and more light: Raise window blinds and remove screens from windows to let in as much natural light as possible.
  • Modernize fixtures: Replace boring or tarnished light fixtures. Trade in old lampshades for new ones. Replace sink and tub fixtures with modern, shiny ones.
  • Deep-six shabby furniture. Selinger-Eaton recommends buying cheap-chic replacements at Target.
  • Create life: Set the table, leave on the big-screen TV, play background music.
Source: Christian Science Monitor, Keith Rockmael (03/13/2006)

Get a free evaluation with recommendations for home staging now

View our listings online

Friday, March 10, 2006

“Stigmatized” Properties in Edmonton

From time to time, usually through no fault of its own a property under goes a traumatic event that "stigmatizes" its value. How this affects the property's value may be debateable especially if you are the seller. In Edmonton we have seen all kinds of stigmatized properties come up including former grow-ops. The following is information from the Real Estate council of Alberta's website and deals strictly with this issue.

Sometimes when dealing in real estate, the onus will be on you, the client, to ask questions regarding issues of specific importance to you and your family, rather than relying on a real estate agent to try to anticipate all of your needs.

Concerns Not Physical, Structural, or Obvious

When selecting a property to buy, most often the physical appearance of a property and the neighbourhood will be obvious. If you are concerned about the less obvious structural and mechanical aspects of the house, you can have a property inspection done. However, consumers may have other areas of concern that would cause them to avoid a property. Certain events may cause a property to be described as a “stigmatized property.” This term is sometimes applied to a property that has had some circumstance occur in or near it, but which does not specifically affect the appearance or function of the property itself.

Examples of these might include:
  1. a pedophile is reported to live in the neighbourhood
  2. a former resident was suspected of being an organized crime gang member
  3. a death occurred in the property
  4. the property was robbed or vandalised
  5. there are reports that the property is haunted
Significance Varies Individually
The significance of these or any other occurrence will be affected by a person’s values and perceptions, ethnic background, religion, gender, age and other individual concerns. Therefore, to determine with any certainty all the possible occurrences that might cause a property to be considered “stigmatized” is daunting if not impossible. Further, in the event of a lawsuit resulting from an undisclosed stigma, the buyer would have to prove what harmful effect the stigma had because these issues are often personal ones that do not affect the appearance, function or use of the real estate.

Information Upon Request
In Alberta, it is important for consumers to know that real estate seller and the seller’s agents are not required by provincial legislation to disclose this type of information about a property unless asked. Therefore, Alberta consumers, who are concerned about certain types of events in regard to a property, are responsible to make inquiries of their real estate industry member and the property owner. When asked, your agent must make the appropriate inquiries and sellers and their agents must respond truthfully.

Stigmas Are Difficult to Define

The following may help to answer these questions and show the difficulty in defining a stigma. Think about your response to this question:Some would say “Yes, absolutely!” However, consider the following situations:

Would it matter to you if a death had occured in a property you were interested in buying?

Some would say "yes, absolutely!" however, consider the following situations:

  1. Would you find a death caused by a violent act or suicide unacceptable?
  2. What if the family brought an elderly grandmother home to die in the comfort of her family and familiar surroundings?
  3. Suppose it were a crib death of a newborn?
  4. What if you learned the owner’s pet had recently died in the home? Would you feel differently if the death was natural or if poison was suspected?
  5. Would you be concerned if a person had been killed by a car on the street in front of the house?
  6. Would you be as concerned by a death that occurred 50 years ago as you would with a recent one?
These examples illustrate how difficult it is to clearly define what a “stigmatized” property might be. What one person might find unacceptable may be of little or no importance to another.

Treading Carefully
It is impossible to anticipate all the areas of sensitivity individuals may have. While the feelings and concerns of individual buyers are understandable, it's also easy to see that sellers might be unfairly hurt by a requirement to disclose such things. For instance, if the law required that all deaths in properties must be disclosed, regardless of how and when they occurred, the act of bringing a grandmother home to die may cause the owners to lose property value.

It may seem unfair to place the onus on the buyer to make such inquiries about a property they are interested in. On the other hand, would it be fair to require a home-owner to label his property as stigmatized without a clear understanding of what the term means, or when it means different things to different people? Is it fair to hold a seller’s real estate agent responsible if an event was not disclosed to the buyer, even when the agent was not advised by the buyer that such events are important to them?

Protect Yourself
You can take steps to avoid buying a property you might consider to be stigmatized by discussing your individual concerns with your agent and instructing the agent to ask specific questions about the property.

For example, suppose a family has had a tragic experience wherein their daughter was sexually assaulted while she was alone at their home. She is no longer comfortable in that home and this is their reason for moving. If she was to learn their new house had a similar event occur in it, she would be understandably upset.

To avoid this, the buyers should instruct their agent to make inquiries on their behalf. This can be done professionally and while maintaining a level of privacy. For instance, the buyer’s agent could ask the seller and the seller’s agent, “Have been any violent crimes committed in the property?”

Duty to Disclose
When asked, the seller and their agent must disclose the information that is known to them. However, keep in mind the current owners may have no knowledge of events that occurred before their ownership or the property may have been rented out and the seller may not know of events that occurred during the rental period. For serious concerns, consumers are advised to make inquiries of the local police service.

Home sellers and seller’s agents who are concerned that some event may cause the seller’s property to be considered stigmatized will face a dilemma - do we disclose and risk harming our property value, or do we not disclose and risk the buyer learning the information later and pursuing us for damages? Prudent agents will discuss all the variables with the seller and should suggest obtaining a lawyer’s advice as to the seller’s rights and obligations.

Home sellers are cautioned to keep in mind this issue differs from the responsibility to disclose material latent defects. A latent defect is a material defect not generally visible, such as a serious crack in the foundation that has been covered over with paneling or improper wiring covered by drywall. Sellers and their agents must disclose all latent defects about a property to potential buyers, or otherwise risk being liable to the buyer for the costs of repairing the defect.

Summary

Alberta legislation does not define stigmatized properties. It also does not require real estate industry members to disclose events which some may consider as stigmas, unless asked about them.

Buying consumers are advised to carefully consider the areas of concern they have, discuss them with their agent and ensure the necessary inquiries are made to avoid purchasing a property they will not feel comfortable living in. Sellers should consider the consequences of disclosure compared with no disclosure and seek legal counsel.

With over 100 years experience we have the ability to assist you whether you're buying a stigmatized property in the Edmonton area. Contact us for further information and assistance.

Edmonton facts

Gotta love a little trivia every now and then.

The City of Edmonton manages 12 areas of infrastructure:

- Drainage
- Road right-of-ways
- Parkland transit facilities and equipment
- Fleet such as buses and city vehicles
- Buildings Traffic control and street lighting
- Recreation facilities
- Affordable housing
- Waste management facilities
- Technology equipment
- Other services such as emergency response and police equipment and library contents

source city of Edmonton.

For facts and trivia related to real estate contact Sheldon or Ken Johnston with Coldwell Banker Johnston and their team. Put their 100 plus years of combined real estate experience to work for you in the Edmonton real estate market.

780 486 8655

Edmonton and Calgary Lead Commercial Development Boom


The Globe and Mail published an article today about a development wave in the commercial real estate market in Canada. Experts are predicting big increases in this sector of the Canadian real estate market. ROI on real estate investment in Canada was up 18.7% in '05, lead by Edmonton and Calgary at 23.4% and 26.5% respectively. Here are some exerpts:

TORONTO -- A "mini development wave" is taking hold in the commercial real estate market as high prices and an abundance of capital are turning investors into builders and private owners into sellers, says a leading executive in the industry.

As prices continue to rise across the country and the competition for existing buildings becomes more fierce, an increasing number of institutional investors are teaming up with private partners on construction projects, said Blake Hutcheson, Canadian president of CB Richard Ellis. At the same time, many private owners are taking advantage of the rising market to sell at least some of their holdings, he said.

"We are at the point that it may not be a bad time to take some money off the table," Mr. Hutcheson said yesterday at the RealCapital conference in Toronto, which focuses on investment in the industry. The coming year will likely see an increase in privately held portfolios coming on to the market, he predicted during his firm's annual forecast presentation.

He also predicted increased merger and acquisition activity this year and said he anticipates some institutional investors will sell parts of their holdings in order to reinvest their gains in areas where they can get a higher return, perhaps in foreign markets. They also may put some of those gains into new construction.

"Watch for a mini development wave across all sectors," Mr. Hutcheson said, noting that higher downtown office rents in markets such as Calgary and Toronto have made new construction in this sector a real option for the first time in several years.

Even with new supply, Mr. Hutcheson expects rents to rise in most sectors and prices to continue to climb. These favourable conditions also will lead to an increase in the value of properties trading hands, he said.

A string of blockbuster deals, such as the sale of the O&Y portfolio, pushed the value of commercial real estate transactions up to almost $20-billion in 2005 from $16.8-billion in 2004. That activity should rise even further this year, Mr. Hutcheson said. "We are going to see some major deals."

That kind of activity would be welcome by many speakers at yesterday's conference who identified the lack of available product as a major issue in the Canadian market.

"There is a perception that the highest-quality real estate in Canada is locked up for good by Canadian institutions," said Amy Erixon, who runs the North American operations of industrial developer Giffels Management Ltd. and is based in the United States

The head of North American investment for a major German fund agreed. "The industry is very centralized," said Christian Strauch of KGAL Group. "It does not take long to know everybody because there are just a handful of people."

Despite rising prices, the Canadian real estate market continues to offer investors attractive returns. New figures released this week by the Canadian Institute of Canadian Real Estate Investment Managers show that total return on real estate in 2005 was 18.7 per cent, up from 13 per cent in 2004.

Returns on office properties showed the biggest gains, almost doubling to 18 per cent. The hottest markets were Calgary with a 26.5-per-cent return and Edmonton with 23.4 per cent.

Thursday, March 09, 2006

Edmonton Mayor cries for money and other things

The Edmonton Journal reported today that the mayor of Edmonton is looking about 8.6 billion dollars. Phew. I thought it was going to be some stratospheric amount. I should mention that he is asking for that over the next 10 years and it is supposed to help pay for all kinds of much needed infrastructure work. It seems to me though that the province collects the windfall of the oil boom here and hands out useless $400 cheques, our cities have to go hat in hand for money.

That's ok though, in a separate article in the Journal today the mayor mused on the inability to find a way to give post secondary students their bus passes for free.

Mayor Stephen Mandel says a special transit pass for post-secondary students will face delays unless the city agrees to subsidize the program.

The idea for a specially priced U-pass has been discussed for years as a way to encourage students to take the bus and the LRT.

But plans have been held up, in part by a dispute over how much students should pay.

A University of Alberta referendum held in 2004 found students would agree to pay $60 per semester, while the city has said it needs at least $120 per semester to cover the costs of extra transit vehicles and staff.

To break the stalemate, the city may have to swallow some of those costs, Mandel said. He agreed that $120 per semester is too much for students to pay.

I'd personally be willing to let the students ride for free. If they'd agree to community service. I know, I know, life's tough but in one of the greatest places on earth to live this is what we have to cry about.

Tuesday, March 07, 2006

Edmonton real estate market news release

Challenges lie ahead for the inexperienced. If you are so inclined to tackle this robust market without professional help you are as likely to miss out on a great opportunity as make the wrong move at the wrong time. Experience is crucial in an environment such as this. If you are looking for professional help in what's being called 'boom Berta' then we are your team. Contact us. The following is the Edmonton Real Estate Board's press release for February's market statistics.

Edmonton, March 2, 2006: February is supposed to be a relaxing month for REALTORS®. Consumers are typically in hibernation or on winter vacations and sales are slow but steady. But no one had their feet up this month with residential sales in February up 27% over last February and up 36% over January 2006.

“REALTORS® have been kept busy responding to the atypical consumer demand for housing,” said Madeline Sarafinchan, EREB President. “Over 80 homebuyers found their new home through the Multiple Listing Service® each business day in February.” Over 1,000 single-family detached homes, 500 condos and 59 duplex and rowhouses were sold in February. Records for sales in February were set in each category.

A decrease in the number of days on market was an indicator of the intense market activity. Homes sold in February were on market for an average of just 35 days: down from 45 days in February 2005. The sales activity also encouraged listings; 1,835 residential properties were listed in February. That is 220 more than were listed in January 2006. At the end of February, there were 2,595 residential properties available on the Edmonton MLS®.

Single-family home selling prices climbed to an average price* of $249,925 in February: up 6.25% from last month. Condo prices of $146,933 on average were below the record prices set in August 2005 ($149,500) but up almost 10% from last month. Duplex and rowhouse prices hovered near record level highs at $198,394 in February. The average price for all residential property was $211,531 – up over $28,000 from last February and a new all time record high.

“Inventory is still available for 1.6 months at current sales levels,” said Sarafinchan. “In 1990 inventory levels dropped to around 1,600 properties so there is no need for alarm. The inventory selection changes constantly with up to 100 properties being added to the inventory each day.” REALTORS® have access to computer records, which are updated with new listings every three minutes.

The strength of the Alberta economy may be reflected in the sale of vacant acreages and recreational properties. Average prices tripled from $59,914 in February 2005 to $184,997 this February. Sales of recreational properties with a home also tripled since last February although prices dropped slightly.

In the commercial division, total sales are double the previous two Februarys. Total commercial sales were $21 million in February 2006, up from just over $10 million in 2005 and 2004. Land sales are double last year and apartment sales rose from $2.8 million to $6.6 million in one year although unit sales only increased from seven to eight. In the Businesses category, just seven sales generated $2.5 million compared to 10 sales last February for $1.5 million.

February 2006 activity Record * % change from 2005
Total MLS® sales this month 1,794* 27.40%
Value of total MLS® sales - month $395 million* 49.50%
Value of total MLS® sales - year $665 million* 47.00%
Residential¹ sales this month 1,605* 27.70%
Residential average price $211,531* 15.50%
SFD² average selling price - month $249,925* 22.00%
SFD² median³ selling price $238,000* 22.00%
Condo average selling price $146,933 6.27%

Monday, March 06, 2006

Interest Rate Alert

The Bank of Canada website shows there is an announcement expected tomorrow (Tuesday, March 7, 2006) on interest rates. It is expected there will be an increase so secure a mortgage rate asap before the banks follow suit and increase mortgage rates. Contact us with questions.

Rising rates not to affect Alberta housing market

Royal Bank conducts a survey every year (or at least has for the last bunch of years) asking people across Canada what they think about the housing market, and whether or not they plan on buying real estate in the next few years.

This year's survey predicts that much of Canada will start to see a slow down in the housing market over the next while, except for Alberta and Atlantic Canada.

Some exerpts:

The share of those people saying they were very likely to buy had dropped to 10 per cent - down from 13 per cent last year and at the lowest point in more than five years. The percentage of those who plan to buy a home in the next six months also fell - to eight per cent, down from 10 per cent last year.

Yet overall intentions to buy a home within two years remained the same as in 2005 at 29 per cent, with 90 per cent of current homeowners saying they thought their home was a great investment.

The decline, she said, appears to be the result of higher interest rates, rising home prices and the fulfilment of much of the pent-up demand that has been driving the market for the last few years.

Royal LePage Real Estate Services Ltd. agrees that home sales are forecast to slow between three and five per cent in 2006, but the year would still be the second-best on record, the firm said.

Alberta held steady at 18 per cent, but the numbers decreased in other regions.

Interest rates have been rising gradually over the last few months on the back of a strong economy, and while RBC is forecasting a slight rise, it is not yet known how much they may climb.

But the Bank of Canada, on a rate-hiking trend in recent months, is widely expected to boost interest rates by another one-quarter of a percentage point with a scheduled announcement Tuesday morning.


Full article.

Sunday, March 05, 2006

More money for Oilsands


As a major benefactor of oilsands devleopment this can only mean good news for the Edmonton real estate market and the Edmonton areas economy. If you check through our blog you'll notice other stories relating to oilsands development and investment. This story comes from the NEI Nuclear notes blog.

Chevron Corp. is doubling down its bet on Alberta's oil sands, saying it aims to spend billions over the next decade to launch a second project.

The company said Thursday it has acquired rights to 73,000 hectares northwest of Fort McMurray — land that Chevron believes holds 7.5 billion barrels of oil.

The initial cost for Chevron is modest, between $50-million and $70-million to acquire two sections of leases. But turning that frozen muskeg into an industrial project will take years, and billions of dollars, said James Bates, vice-president of operations and asset development at Chevron Canada Ltd.

Saturday, March 04, 2006

Historic Home Renovation Seminars


I just found this on the City of Edmonton web site. There is currently a series of seminars going on at Fort Edmonton called "This Old Edmonton House." Here's a description from the site:

Are you the owner of a historic home, full of character, charm and outdated electrical systems? If so, you’ll be interested in this series of public seminars about owning, maintaining and restoring a historic home. An expert will lead each seminar. Come prepared with your questions and problems; leave with some solutions and answers.

Click here for more information.

#1 Mistake Home Sellers Make


A recent e-mail survey by House Hunt Inc. asked home sellers what mistakes they made when they sold their home. The number 1 answer, was over pricing their home. Second, by a nearly three to one ratio, was working with the same agent who represented the buyer. Third was failure to disclose know defects, with underpricing and not using the Internet to market following closely behind.

At Coldwell Banker Johnston, we provide detailed market evaluations and compare your property to numerous others that have sold recently, expired and are for sale. We also try to avoid representing both the buyer and seller (dual agency) if at all possible.

Contact us for a free online comparative market evaluation today.

Wednesday, March 01, 2006

Understand Your Market Before You Sell

In today’s very active and competitive real estate market in Edmonton, it’s surprising how many home sellers get caught up in the excitement of rapidly-rising prices and just arbitrarily decide what their home is worth. While you may have quickly browsed a web site or two, or even toured some Open Houses in your town, such casual investigations can’t properly evaluate what price the changing market will bear and what your house can command against its competition.

Some home sellers even make the potentially serious mistake of buying a new home before they have a clear understanding of what their current home may sell for. They enter into a commitment to buy their next home at a certain price and then ‘work backwards’ trying to sell their home for the amount they’ll need to bridge the distance between the two properties. Sometimes this flawed logic can end in disaster. The home seller may be left with a home that sits on the market for months longer than they anticipated. They may even end up reducing the list price, if their target price doesn’t fit the reality of current market conditions.

If you’re thinking of selling, an important first step is getting a comparative market analysis to give you a reasonable expectation of your home’s value. You need hard information and proven facts to really understand the market, so ask for a market evaluation of your property before you set the list price. Don’t choose a number off the top of your head, just because it suits your needs. We can prepare a comprehensive report for you that will provide you with statistics on recent sales and current listings of comparable properties. Recent sales show you what prices the market has already accepted, so that’s a good benchmark for a realistic starting point. Current listings show you the competition that you are up against now, so you can be sure your home will be competitively priced. Just as important, we can also provide you with detailed information on comparable listings that have expired. By reviewing similar houses in your area that did not sell, you know what price range the market will not bear.

In Edmonton's active market, home sellers are frequently approached by salespeople from different companies. While it may be a temptation to choose a salesperson simply because they propose the highest list price, this is usually not the best tactic. If your listing is overpriced, it will discourage potential buyers, extend the time period you have to carry expenses and waste your time. A better strategy is to choose a real estate professional who has taken the time to review your market and your competition and is prepared to support their recommendations with solid market research. Why not contact us and take advantage of our advice? There’s no cost or obligation to you and it might just turn out to be the best call you’ll ever make.

Get a free online comparative market evaluation.

Canadian resale real estate smashes records - thanks to Alberta

According to CREA, national sales of existing homes via the Multiple Listing Service rose to their 5th highest monthly level on record in January, fueled by record activity in Alberta and Newfoundland.
According to CREA's statistics, a seasonally adjusted total of 41,347 units were sold through MLS in January, up 2.7 percent from the 40,265 sales recorded during the previous month.

Sales activity reached its highest monthly level on record in Alberta and Newfoundland, CREA reported. Activity also set records for the month of January nationally, and in British Columbia and New Brunswick. Seasonally adjusted activity in January was also just 3.3 percent lower than the highest monthly level on record, which was reached in August 2005.

The national MLS residential average price hit $258,274 in January to reach its highest level on record. Average price was up 12.6 percent compared to January 2005, marking the largest year-over-year increase in residential average price since May 2004. MLS residential average price reached its highest monthly levels on record in British Columbia, Alberta and Manitoba, and set new records for the month of January in every province except Newfoundland.

"Price increases are expected to become more modest in 2006, as rising interest rates and mortgage carrying costs gradually cool resale-housing demand and result in a more balanced market condition," said CREA Chief Economist Gregory Klump.

Seasonally adjusted new MLS residential listings totaled 64,582 units in January, according to CREA. This is an increase of 6.2 percent from December, and the largest month-over-month increase in new listings since August 2005. Seasonally adjusted new listings reached their highest monthly levels on record in New Brunswick and Newfoundland.

The monthly increase in new listings was larger than the increase in sales, which caused the national market for existing homes to become slightly more balanced in January compared to the previous month.

Seasonally adjusted dollar volume reached $11.1 billion in January, its highest level on record. Dollar volume set new monthly records in Alberta, Saskatchewan, Ontario and Newfoundland, and reached its highest levels ever for the month of January in every province except Prince Edward Island.