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Monday, July 24, 2006

Why Now is a Great Time to Buy Edmonton Real Estate

Ok, I know it is a seller's market. I know that there are fewer listings for sale in Edmonton now than there have been in ages (last I read from the real estate board there were 4500 listings a year ago, and 1800 listings now). I know demand is very high. I know the other day when we received 17 offers on one of our listings, 16 buyers went home unhappy. So why on earth would now be a good time to buy real estate in Edmonton???

Simple... the market is going up, and it's going up fast. Calgary and Vancouver have been experiencing this type of market for the past couple of years. Edmonton is playing catch up, and many people are projecting that Edmonton's prices will catch up with Calgary because of the very strong job market. Compared to the rest of Canada, Edmonton is cheap, and the rest of Canada is starting to invest in real estate here.

Many people in the Edmonton market have been looking for weeks or months, often because they've lost out in multiple offer situations. Many buyers don't want to offer over list price, because they don't want to pay too much money. The problem is, in the time they have been looking, the type of property they can afford has steadily been shrinking. They may have started looking at two-bedroom condos, and now they can only afford a one-bedroom.

In March we had a client who would not offer over list price (a member of a large real estate investment club) and lost out on 13 properties. At the time we suggested if she offered $5,000 to $10,000 over list price, she would get the property and in a month or two that price would seem like a bargain. If she had purchased one of those properties at that price range in March, she would now easily would have made $20,000 - $30,000 on the property. We finally had to suggest she find a new real estate company to work with.

Last week we found a property for one of our clients, that was just perfect for them....but, in their words "We want this exact property, just for $20,000 less." Unfortunately it doesn't work that way.

The point of all this is.... even though you may have to pay more than list price to purchase real estate in Edmonton today, it is still a bargain.

Market value is defined as "what a reasonable buyer will pay a reasonable seller." As soon as a buyer pays $10,000 over list price on a home, that home and any similar homes in the area are now worth $10,000 more. Any new listings that come up on the MLS in the area will be priced to reflect that sale price.

If you don't pay market value, and therefore don't buy a property you are missing out. Each month that you wait, you loose money. Not only do you loose out on the type of property you can afford, but the equity you could have in a home is in someone else's pocket.

So, if you you are thinking the best thing to do is to wait to get into the real estate market, think again. Get into the real estate market, and then wait. You will end up with far more equity in the end.

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