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Thursday, August 31, 2006

TD Warns of Potential Housing Bubble in Western Canada

Everyone knows property prices have gone through the roof in Calgary in Vancouver, and they are at new record-setting levels in Edmonton every month. TD Economics now says there is potential for a bubble in western Canada. The important thing to note is that they state that in Edmonton "affordability remains surprisingly good."

TD warns of potential for housing problems in West
By Ottawa Business Journal Staff
Thu, Aug 31, 2006 1:00 PM EST

Housing activity in Central and Atlantic Canada has cooled down without prompting a price correction, but select cities in Western Canada are "flashing warning signs" that suggest the recent pace of price gains has been unsustainable.

That's the conclusion of TD Economics latest "Housing Bubble Watch" report.

"Canada's real estate markets appear to be in good shape and market conditions are becoming more balanced. Key exceptions are Vancouver, Calgary and Edmonton," says TD's deputy chief economist, Craig Alexander.

"The recent dramatic price gains in Calgary and Vancouver are unsustainable over the long-term, and both cities are vulnerable to significant moderation. Edmonton is also experiencing explosive price growth, but affordability remains surprisingly good."

While sales of existing homes are poised to set another record, Mr. Alexander cautions that regional developments are distorting the national story. Resale home prices rose 12.9 percent in the second quarter of 2006 from a year earlier, but excluding Alberta and British Columbia, the average rise in resale prices across the other provinces was a more moderate 7.3 percent. Alberta is responsible for almost half of the gain in the national average of new home prices.

"The dominant trends in housing markets outside of the West have been weaker unit sales, greater new listings and more moderate price growth - all of which point to more balanced market conditions and declining real estate risks."

In Ottawa, Mr. Alexander notes the pace of resale home prices has slowed, dropping from a 6.2 percent year-over-year increase in April to 1.4 percent in July. This can be partly explained, he says, by an increase in new home construction, which has put a damper on price growth.

Monday, August 28, 2006

Average Edmonton Home Now Costs Over $318,000

The most interesting bit of info in this article, is that the average home in Edmonton (not greater Edmonton) now costs over $318,000. Especially when 5 years ago only 6% of homes in Edmonton sold for over $300,000. So what does it all mean? Has the cost of housing inflated in Edmonton too quickly - will it deflate just as fast? Or have the prices here just caught up to the rest of the country, and the booming economy? In my opinion we're just catching up - it is still cheaper to buy a home here than in Montreal, and what's so great about their economy? The biggest problem is not the cost of housing (yet) but that there is nowhere to house all the people that are needed to fill all the jobs we have to offer. Don't get me wrong - we can't continue to sustain the kind of growth our real estate market is seeing, it has got to slow down. I just don't see any bubbles bursting....yet. We'll see what August's stats show in a few days.

Skyrocketing house prices create own problems

Paula Simons, The Edmonton Journal
Published: Saturday, August 26, 2006

Saturday morning breakfast. We're sitting at the kitchen table, reading the paper. My husband's snagged the front section. My daughter has the colour comics. I've got the real estate ads.

Not that we're in the market, thank God. I just have a half-giddy, half-morbid fascination with housing prices.

This morning, I almost choke on my Cheerios. A house four blocks away from us has just listed for $539,000.

"Five hundred and thirty-nine thousand dollars!" I hoot, gobsmacked at the hubris. "Are they crazy?"

Ours, to put it mildly, is not a half-a-million dollar neighbourhood. Or at least, it didn't used to be. After the last eight weeks, who can tell?

It's been that kind of a summer. Everyone, it seems, has a story. Friends of mine in Parkview are dumbfounded when the severely modest 1950s bungalow up the road from them sells for $450,000, in the blink of an eye. One of my relatives, a widowed senior, bought a pleasant condominium less than a year ago. The other day, one of her neighbours walks up, unsolicited, and offers to buy it from her for 40 per cent more than she paid for it last fall.

Around here, a house listing for $1,000,000 used to be big news. Right now, there are 12 houses with asking prices of more than a million on the local MLS listings -- with two listed at over $2 million.

Of course, in cities like Vancouver and Toronto -- or even Calgary and Fort McMurray -- prices like this are nothing new.

The market in Edmonton has been depressed for years. Part of what we're seeing now is long-overdue catch-up.

But much of it is being driven by an overheated economy -- and a certain sense of consumer hysteria. Yes, there are more people moving to Edmonton. But there is also a new sense out there of what people are willing to pay. As a community, we've crossed a psychological barrier. Prices that would have seemed ridiculous six months ago suddenly seem reasonable today.

Five years ago, says Madeline Sarafinchen of the Edmonton Real Estate Board, only about six per cent of the houses in Edmonton were selling for more than $300,000.

Last month, $303,304 was the average price for a single-family home in the greater Edmonton area, which includes places like St. Albert, Redwater and Calmar. That was up more than 35 per cent from July of last year.

Prices are trending up again in August. So far, the average selling price in metro Edmonton is $304,900. In Edmonton proper, things are trending even higher. The average selling price in the city itself right now is $318,942.

For those looking to buy a house for under $250,000 or $200,000, the competition is ferocious. Sarafinchen says it's not uncommon for sellers to get six or eight competing offers, for buyers to bid higher than the list price in an effort to get the house.

Looking for a new house in a new burb? Finding a builder, or even a building lot, isn't easy. In some cases, indeed, builders are handing customers back their deposits, because they can't deliver a new home -- or at least not at the agreed-upon price.

"Most of the builders are at capacity. Everyone's at capacity. Developers have released all the land they're capable of releasing," says Sarafinchen.

"New home builders don't have a lot of standing inventory, and most of it is priced over $300,000," agrees Richard Goatcher, a senior analyst with Canada Mortgage and Housing Corporation. "Of course, they're building as fast as they can. We've got record levels of single-family house construction. But builders are totally backed up with orders."

In a perfect, balanced real estate market, Goatcher says, there should be a "sales-to-active-list ratio" of 30 per cent. Of all the houses listed in a month, that means 30 per cent sell within 30 days.

Right now, he says, the sales-to-active-list ratio is closer to 100 per cent -- which means that pretty much every house that lists in a month sells in a month. And that, he says, can lead to panic buying, frantic bidding that pushes houses above list price.

The result? Some buyers end up bidding more, and assuming more debt than they can comfortably handle. Or they end up making unconditional offers on houses and get stuck with lemons that require major, unexpected repairs. Or they end up priced out of the market altogether.

"This situation is not sustainable," he says. "These accelerated markets sow the seeds of their own destruction. We should start to see a dropoff in sales."

Then, he stops himself and chuckles: "Mind you, I've been saying that for months and it hasn't happened."

South of the border, housing prices in key markets are dropping, along with consumer confidence. Not here. Not yet.

But our superheated economy creates its own problems. Our job market is as hot as our housing market. We need more workers -- from doctors to drywallers -- to move here. But we don't have other housing -- affordable or luxury -- to meet demand.

We've now reached the part of the column where I'm supposed to come up with some smart, glib solution. I haven't got one. There's no short-term government initiative to solve this dilemma, at least not much faster than the market can itself. (To be sure, the national energy program "fixed" our last boom, but that's not a model I'd favour.) The bittersweet truth is that these prices may be the new normal. After Edmonton's years of languishing in the real-estate backwaters, it may take us all a while to adjust.

Sunday, August 27, 2006

Canadian Real Estate Won't See the Same Cooling as the U.S.

This article from the Globe and Mail outlines all the reasons that the Canadian real estate market is still going strong, and won't see the same kind of downturn as in the US. They do suggest that with the kind of price increases we've seen in Calgary and Edmonton a local cooling may be in order, but at the same time says that housing is here is so affordable relative to the rest of the country that we could just keep on trucking. A closer look at the economy in Alberta shows that it will be some time before there is any price correction here.

Why our housing market is better insulated
Canadian real estate may be cooling, but it's not crashing, ROB CARRICK writes, and we positively shine compared with slumping U.S. sales and prices


The Massachusetts real estate market is just the thing to cure any smugness Canadians might have about how much their homes have gained in value.

A blast of negative news about the U.S. housing market was released this week, including a report that Massachusetts home sales continued a slide in July that began last fall. But while prices held their own previously, they posted a 3.5-per-cent decline last month that was the worst setback in 13 years.

Sean Rooney, an agent at Boston's First Choice Realty, said sellers are getting frustrated. "They've seen people selling over the past year or so and getting that high price," he said. "Now, they're not getting the prices they're looking for."

Are Canadian homeowners heading for the same kind of shock about the value of their properties? It's hard to generalize about our housing market because of differences between hot and not-so-hot markets, but the answer on the whole seems to be no, if you judge by some key indicators.

Before looking at them in detail, it's worth pointing out that the real estate market is important not just to homeowners who like to play the trivia game called What's My House Worth? The housing sector has a significant impact on the economy, both through construction and the sale of related goods and services. Also, many people have been borrowing against the increased value of their homes to finance renovations and other expenditures. If housing prices contract, that could dampen consumer spending.

The U.S.

Retail housing activity

Sales of existing homes in the United States fell sharply last month -- by 11.2 per cent from July, 2005. If you took this seasonally adjusted level of sales and extrapolated it over a full year, you'd end up with sales of about 6.3 million, which would be the weakest level since early 2004. Weakness is pervasive across the entire U.S. market. Figures from the National Association of Realtors shows that year-over-year regional sales declines ranged from 7 per cent on the low side in the South to 18 per cent in the West. Over all, the U.S. market is down about 12 per cent from its peak annualized sales level of 7.2 million homes reached last September.

Retail housing prices

Median housing prices held firm in the U.S. market in July, rising 0.9 per cent versus the level of a year earlier. But variations among regions and cities undermine the positive story told by the national numbers. Once you get past a 3.2-per-cent price gain in the South, you find small declines in the Northeast, Midwest and West. The Northeast, where you'll find Massachusetts, had the worst regional decline at 2.1 per cent.

Housing starts & building permits

Construction of new homes in the United States declined 2.5 per cent in July from June levels -- the lowest point in two years and the fifth decline in the past six months. Building permits, an advance indicator of future housing construction, fell 6.5 per cent to the lowest level since September, 1999. Evidence of a sagging new home market was seen this week in the 19-per-cent decline in third-quarter profit reported by Toll Brothers Inc., a major U.S. builder of luxury homes. Pulte Homes Inc., the second-largest U.S. builder, recently reported a 29-per-cent drop in new orders.

Hottest & coldest markets

There's only a scattering of hot residential real estate markets, and on the whole they don't match up to Canada's busiest cities. By U.S. standards, Canada's weakest markets don't look half bad. The U.S. region with the most strength is the South, where housing prices in such places as Baton Rouge, La., and the Florida cities of Orlando, Ocala and Tampa-St. Petersburg-Clearwater have all risen between 17 and 27 per cent over the first half of 2006. A census of cold markets would have to include places like Danville, Ill., down 11.2 per cent in the first six months of the year; Dover, Del., off 8 per cent; and Massachusetts.


Retail housing activity

Resale activity fell in July, but by just 2.8 per cent on a seasonally adjusted basis. "It's a bit of a cooling off," said Craig Alexander, a Toronto-Dominion Bank economist who has been tracking Canada's residential real estate market for more than a year through a series of reports called Housing Bubble Watch. "The U.S. housing market is having a correction, the Canadian housing market is cooling." While the U.S. market has been in decline for months, Canada remains strong. The Canadian Real Estate Association has predicted total sales of 488,160 for 2006, which would be a 1-per-cent increase from last year and a sixth successive year of record gains. Next year, the association predicts a 3.3-per-cent decline, moderate in comparison to what's happening in the United States. In Canada, 11 of 25 markets actually reported flat or higher sales in July, and only four reported sales that were much worse than the average decline. Vancouver had the worst decline at 26.9 per cent.

Retail housing prices

The national average price increase here in Canada was 10 per cent, which looks great next to the inflation rate last month of 2.4 per cent. Regionally, west is best in the real estate market and east is least. "You're getting dramatic price gains in Alberta, remarkably strong gains in B.C., quite solid to strong in the rest of the West, and very modest growth in the rest of the country," Mr. Alexander said. Where Canada and the U.S. differ on pricing is in the fact that price declines were widespread south of the border last month, while prices fell in only two Canadian cities. Windsor, Ont., was down 2.9 per cent and Thunder Bay, Ont., fell 1.4 per cent.

Housing starts & building permits

The most recent report on Canadian building permits is for June and it shows a slight drop of 1.4 per cent from the May level for residential construction. Housing starts in July were pretty much even with June, which suggests a total of about 236,500 new homes projected over the entire year. That's extremely elevated," TD's Mr. Alexander said. "Based on population and immigration, it should be around 175,000. Anything over 200,000 is really, really strong." Another sign of Canada's relative strength against the U.S. is that the federal Canada Mortgage and Housing Corp. has twice had to revise its forecast for new home construction upward. The reason: lots of activity in the West, particularly Alberta, and nothing dramatic in other parts of the country.

Hottest & coldest markets

Calgary blows away just about any city in the United States right now. In July alone, prices surged 44.3 per cent from the same month last year. Edmonton, the second-ranked market by price increases, gained 33 per cent while Vancouver jumped 18.6 per cent. Huge increases such as these suggest a future correction like the U.S. market seems to be facing, but Mr. Alexander said the Vancouver market is the only one where high house prices have seriously crimped housing affordability. "Quite frankly, affordability in Calgary and Edmonton is not terrible," he said. House price gains of 40 per cent are absurd, but if you look at Calgary, its affordability is cheaper than it is in Montreal." Canada's coldest markets are probably Windsor and Thunder Bay, Ont.

When the doctors and the renovators are buying investments properties to speculate, then you know the market is out of touch. I haven't heard too much about that happening here in Canada.



New homes in Edmonton, a safe investment?

Many times as a real estate agent I've been told by prospective buyers "we're going to build." This is a desire I completely understand, however I've often had mixed emotions about this. In certain cases I've been convinced that is the best alternative for my clients due to their needs and their ability to pay and understand the building process. In many cases though - especially with young couples building their first home - I've had some reservations. Take for example that they really don't have a good reference point for what they want and how that will work for them over time, especially when it comes to materials and layout. When I bring forward this reservation most young couples look blankly at me and then hurt and then that's about the last time I hear from them until they go to sell. This is where most of them realize they need a professional to assist them with all the intracasies involved, the least of which is colour choices ect.

The reality is the very helpful sales person in the showhome is the employee of the builder and for that reason they owe you no fiduciary duties. This means they owe you no loyalty, full disclosure or confidentiality (among others). In the greater Edmonton area there are approximately 32 builders who will pay your agent's fee so that you are represented. Many buyers however feel that this means they would pay more. This is incorrect. The agreement outlines that the buyer will pay the same price even if they didn't use an agent (in fact I believe the buyer receives so much beneift that even if they agent's fee was added to the price they would still receive benefits outweighing those fees).

The following story in the Edmonton Sun outlines one of the dangers of self representation. Using an agent may not have prevented this problem but a knowledgeable agent could have precautioned their buyers about the contract they were signing as well as given options of other builders ect. As a buyer you certainly want to be aware of your limited rights when dealing with the builders lawyer and agent as well. Nothing beats being represented by somebody who is trained and has your best interests in mind.

Sun, August 27, 2006
Couple lose chance at dream home
Developer returns deposit after project stalled over permits


Alana and Brian Halliwell worry they may never get to live in their dream home.

The Edmonton couple signed an "affordable" purchase agreement with Reid-Built Homes Ltd. in January to have the house built on Blackmoor Close in Stony Plain.

They also put down a $4,000 deposit.

Six months later, the developer cancelled the $287,000 agreement and returned the downpayment.

Now the Halliwells, along with 12 other families, are preparing to launch a lawsuit against Reid-Built Homes over the mess.

"We're in our 40s. This was our one kick at the can," Alana, 42, said. "This was going to be our dream home.

"To be honest, we don't think we can afford to build now."

Shane Parker, lawyer for Reid-Built Homes, said his client did nothing illegal.

That's because under the Alberta New Home Warranty Program, a developer is able to opt out of an agreement if certain criteria cannot be met within 60 days.

In this case, the company was unable to obtain the necessary building permits. Stony Plain would not issue the documents until the lots were serviced, and that work is still ongoing, Parker said.

"Other municipalities are more flexible, but there's certainly nothing improper about what the town of Stony Plain has done," Parker said.

"It's the municipality that sets the rules; builders have to follow those rules."

According to Edmonton's Real Estate Weekly, the average single family home in this city now costs $303,304.

Since January, the average new home price has increased by an average of 10%, said Re/Max realtor Terry Paranych.

Alana, who speaks for everyone involved in the lawsuit, said all 13 properties were purchased between November 2005 and May of this year.

She said a short letter was sent later citing the cancellation clause, and deposit cheques were returned.

However, Alana said she's received no written explanation why Reid-Built backed out of the deal.

Alana said two members of her group tried purchasing their properties twice, only to have the deals fall through on both occasions.

"How many times does the agreement need to be signed for it to be valid?" she said. "How many times are we expected to purchase the same lots and homes?"

Alana said she and Brian will continue to live in their west-end home, at least for the time being.

Parker declined to say whether Reid-Built Homes sold the properties too early.

"Hindsight is 20-20," he said. "It's a matter of builder acting in good faith with an understanding of when lots would be available. That didn't happen."

BC Real Estate Benefits from Alberta's Strong Economy

Interesting article from the Journal about how much property Albertans are buying up in BC. One thing is missing for me - a stat showing how many recreational properties were sold to people from BC.... it would be interesting to compare.

Albertans find home away from home in B.C.
Shawn Ohler, CanWest News Service; Edmonton Journal
Published: Sunday, August 27, 2006

EDMONTON -- Cash-flush Albertans are taking advantage of their province's recent oil boom by snatching secondary properties from their westerly neighbours at unprecedented rates, according to a real estate research firm.

Albertans have purchased 2,219 properties in B.C. worth more than $650 million in the first six months of 2006, ahead of the 2005 pace, and drastically more than buyers from elsewhere in Canada and the United States, according to Landcor's recently released property sales report.

Ontario, in comparison, ranks second with 381 properties worth more than $200 million, followed by California (188 properties, nearly $82 million) and Washington state (98 properties, more than $47 million).

Landcor president Rudy Nielsen, a veteran B.C. landman now hawking acreages on the northern tip of the Queen Charlotte Islands, said Alberta's appetite overshadows all others.

"Ten years ago, the Germans came in to buy a lot of recreational land. If you look at what Germany's buying and what England's buying and what Alberta's buying it's Alberta. We've become the playground for Alberta money," he said.

Edmonton businessman Jay Champigny owns a 2,350-square-foot house on a 7,000-square-foot lot worth $1.75 million in the relatively undeveloped Pender Harbour on B.C.'s Sunshine Coast, but he's never actually seen it.

"I've seen pictures, but I've never been there," said Champigny. "I bought it sight unseen. But I know B.C. and I know property, and the feedback I got from people I trust said Pender Harbour is it."

Often, Nielsen said, Albertans aren't content to stop at single properties, and Champigny is proof. Before securing the Pender Harbour unit, Champigny bought a vacation home in Vernon, B.C.'s, Outback resort, and is about to nab a third at Lakestone, between Kelowna, B.C., and Vernon.

"I'm spending money now because it may not be affordable 10 years from now, and I'm quite happy to spend my six, seven weeks a year out at those properties," said Champigny, who expects Vancouver's 2010 Winter Olympics will boost the value of his Pender Harbour property to $3.5 million-plus.

Courtenay, B.C., online entrepreneur Sharleen K. Whiteside lists lakeside and coastal properties at, and draws 200 hits a day from Albertans despite never advertising in that province.

"Everywhere you go in Courtenay or Comox (B.C.), you see Alberta licence plates. Since Westjet started flying into Comox (from Calgary and Edmonton), it's boomed," said Whiteside.

James Askew, who sells and markets the Outback properties, said Albertans have become a dominant player in all areas of B.C. waterfront property since 2003.

When Askew sold a 54-home project in Kelowna, 35 per cent of his buyers were from Calgary, 25 per cent from Edmonton. One-third of his units on the Sunshine Coast and Ucluelet, B.C., on Vancouver Island, went to Albertans, and of 2,000 people interested in a just-announced beachfront condo in Osoyoos, B.C., half are from this province.

"The economy there is incredible. And, yes, you have places like Pigeon Lake (Alta.) and Sylvan Lake (Alta.), but because there's not many of them, everyone's descending on them in the summer, fighting for land. It's easy to get there, but they're small lakes," he said.

"Those people look to B.C., and they soon learn they can choose from Vancouver Island, the Gulf Islands, the Vancouver coastline, the Okanagan lakes, the Kootenays, the Columbia Valley. Both provinces are lucky in certain ways, that's for sure."

Edmonton Journal

FACTBOX: Out-of-province boom

The top four out-of-province buyers of B.C. recreational real estate, from January 2006 to June 2006:

--Alberta: 2,219 properties worth $651,864,336

--Ontario: 381 properties worth $200,643,238

--California: 188 properties worth $81,914,279

--Washington state: 98 properties worth $47,469,459

--Source: Landcor Property Sales Report, 2006 Q1/Q2 update
© CanWest News Service 2006

Friday, August 25, 2006

Properties for sale in Edmonton

These hot new properties were listed by us today in Edmonton. Don't wait to long - they won't last.

West Edmonton, 4lvl split with 1871 square feet on 3 levels. 4th level is mostly developed. Park like back yard, 3 full baths, 5 bedrooms and within walking distance of one of Edmonton's most popular schools. More info on this spectacular west Edmonton property can be found here.

South Edmonton, Immaculate 2 bedroom condo (2nd bedroom converted to a den and could be easily reconverted). Ideally located close to the university of Alberta this property has had numerous upgrades and won't last at $169,800.00 More details can be found at

North Edmonton, 1571 sqrft Bi level, with nanny suite down. There has been too many upgrades to mention here. All this gorgeous home needs is some paint, some updated floor coverings and this diamond will really really sparkle. If you want exceptional value check this property out and don't forget to ask us about the secret room. $339,800.00 More details at

Coming soon. Central Edmonton, Updated bungalow, 35,000 spent on updating the suite last year alone. Newer kitchen, double garage, 3 bedrooms up, 2 bedrooms down and a bargin at $239,900. Stay tuned for more details.

To learn more about these or any other properties contact us at or for more information on how we work to sell our Edmonton and area properties for more.

Wednesday, August 23, 2006

Alberta reports another record surplus

Ok so we have posted similar articles to this in the past. However this is hot of the press from the Edmonton Journal and you can find this story every where in Edmonton right now. CBC ran a insightful documentary on the Alberta boom and it certainly captures the Alberta spirit. The pace of home sales will continue to be strong in the Edmonton area and this news won't make too many buyers reconsider their decisions.

Edmonton — Higher projected revenue in the current fiscal year and better-than-forecast year-end results from 2005-06 will allow the Government of Alberta to increase its investments, the province announced Wednesday.

There will be additional funding for infrastructure, health, education, and savings, it said, as part of the 2006/07 first quarter fiscal report.

"Alberta's economy is strong and vibrant, with the population growing by an estimated 90,000 people last year, the equivalent of the City of Red Deer," said Finance Minister Shirley McClellan.

That kind of growth brings added pressure on our provincial infrastructure and services, McClellan said.

“We are addressing these priorities, while making investments that will benefit future generations."

But the surplus doesn’t mean good news for everybody, said Alberta Liberal Finance critic Rick Miller.

Years of mismanaged surpluses and lack of a long-term vision have led to the struggles many Albertans are currently facing due to unprecedented growth in the province, Miller said Wednesday after McClellan’s announcement.

“Albertans want to know why this government keeps holding these fiscal updates announcing massive surpluses, when they can’t find an apartment, or they’re waiting for hours in the emergency room to see a doctor,” says Miller.

“The answer is this government is incapable of managing growth and planning for the needs of Alberta’s booming economy,” he said.

Meanwhile, the province said the $1.8 billion increase in capital funding includes $711 million for 2006/07 projects and $1.1 billion for future years.

The increase will provide funding for cost escalation of approved projects, additional school projects, health equipment, a new Edmonton Remand Centre, a province-wide policing information technology system, petroleum tank site remediation, regional water systems, and other infrastructure support, the province announced.

Significant increases have been provided for capital and operating expenses in education and health. Education funding has been increased by $293 million.

This includes $232 million for school maintenance and renewal, modular classrooms, new schools and preservation projects, and cost escalation of approved projects as well as $61 million for operating support to schools.

Health funding will rise by $262 million, including $150 million for medical equipment, $81 million for health authority operations, and $31 million for auxiliary nursing salary adjustments.

A new $200 million energy innovation fund has been established to support energy development and efficiency as well as environmental protection and sustainability.

Savings will be increased by allocating an additional $250 million to the advanced education endowment, $100 million to the science and engineering fund, and $41 million to the Heritage Fund for inflation proofing. This brings the total 2006-07 allocations for the Heritage Fund, other endowments and funds to $2.5 billion, an increase of $591 million.

Total revenue is forecast to be $1.5 billion more than budget, primarily due to higher income tax and energy revenue, the province said.

While oil prices have reached record highs, natural gas prices have been weaker than expected. Overall, resource revenue is now projected to increase by $531 million from the budget estimate.

Expense is expected to be $1.3 billion higher than budget, primarily due to funding increases for capital projects, disaster relief, and natural gas rebates.

The provincial surplus is forecast at $4.3 billion, up $193 million from the budget estimate.

The province also released the Alberta Heritage Savings Trust Fund first quarter update and the first quarter activity report with the fiscal update.

The Heritage Fund report notes investment income is expected to be $784 million, about $90 million lower than budgeted because of a decline in markets.

After additional allocations from the sustainability fund, the book value of the Heritage Fund on a consolidated basis is forecast to be $15 billion on March 31, 2007, up from $13.4 billion at the end of last fiscal year.

Miller said the government needs to develop a long-term fiscal strategy that would see surpluses dedicated to solving the long-term infrastructure needs of municipalities, increasing access for post-secondary education and increasing the value of the Heritage Fund to create a sustainable source of revenue.

“Nowhere is this government’s lack of vision more apparent than in the gaping irony of massive surpluses, while schools are crumbling and intensive care beds are being closed for lack of staff,” says Miller.

“In a province with such tremendous economic opportunity, we could be creating world class post-secondary institutions and providing citizens with the highest quality of public health care.”

He questioned the government’s priorities when Alberta municipalities are telling the government that just $20 million would help to solve the homelessness problem.

“Surely Restructuring and Government Efficiency Minister Luke Ouellete can find $20 million over 5 years to address homelessness,” he said.

First Quarter Highlights:

Capital funding increased by $1.8 billion
$200 million Energy Innovation Fund established
Additional $391 million allocated to savings
Surplus forecast at $4.3 billion

The Difference Photography Makes

The Internet is the #1 place buyers look for homes, so it is extremely important that when you list your home for sale it is not only listed in as many places online as possible (especially the MLS), but also that it is displayed well. You spend a lot of time preparing your home for sale, making sure it looks its absolute best; it is your real estate agent's job to make sure it looks its best online.

At Coldwell Banker Johnston we take dozens of photos of your home using studio lighting, a wide angle lens, digital stitching software, and photo-touch up software. What does that mean? It means our listings are listings that buyers want to see, and the more buyers that look at your property the more offers you'll get and the higher price it will sell for (nothing motivates a buyer to spend more than knowing there is another buyer willing to spend more).

Wide Angle Photography makes your home appear larger, and shows more of the space:

Above: A small room looks even smaller taken with a typical 35mm camera. Below that, the same room is photgraphed using a wide angle lens, making this 750 square foot
home look much, much larger.

Digital Touch Ups make our listings stand out against the competition:

Above: Bluer skies, greener grass, cleaner driveway,in the photo on we pay attention to details including lighting, time and condition of the day among other things.
Just to make our listings stand out amongst the crowd.

Bad photos create a negative impression of your home. Many agents don't even bother to take photos of their listings, and that can affect whether or not a buyer wants to see your home, or pay top dollar for your home. Our goal is to get the most money possible for all of our sellers and we do everything we can to achieve that goal.

Above: Actual examples of photos taken by other agents and put on MLS. Whether it's taken
with a camara phone, a lens that can only take a picture of the corner of the room, with lighting
so bad you can see the photographer's reflection or it makes you wonder why the photo
was even taken, it's not good enough for your home.

The Difference Good Photography Makes:

Above: The top photo cuts out part of the windows and the fireplace. On the bottom
wide angle photography shows the whole room, plus studio lighting and digital touch ups
make the room appear warmer and more inviting.

There are currently thousands of people relocating to Edmonton from all around the world due to the incredibly good job market. Relocating buyers are typically willing to spend the most money and do their home searching online. We've had buyers pay top dollar for our listings having only seen the photos online (one sold for $160,000 over the area average).

If you're selling, be sure to research the agents you are considering listing with, and look to see how they are marketing their listings. I don't know any other agents in Edmonton that go to the lengths we go to, to make our listings look their absolute best.

Saturday, August 19, 2006

Formal Complaint Against Comfree Under Fair Trading Act

The Alberta Real Estate Association has made a formal complaint to the Alberta government under the fair trading act. The journal has decided to cover this news today and my comments about the article are in italics below...

ComFree's barbs draw complaint by realtors
Website 'misleading,' Alberta government told
David Finlayson, The Edmonton Journal
Published: Saturday, August 19, 2006

EDMONTON - The battle between real estate agents and upstart ComFree has reached a new level, with the Alberta Real Estate Association making a formal complaint to the government about the company's "misleading" statements.

The 35-page complaint to Alberta Government Services under the Fair Trading Act details statements on the Edmonton ComFree website that the real estate association says "may mislead or confuse" consumers.

ComFree, short for commission-free, charges people selling their home privately a set $595 fee to advertise it on their website and in their magazine, and is in competition with licensed real estate agents in the hot housing market.

The complaints against ComFree include:

- Claiming to have 25 per cent of the Edmonton market, when a consumer survey showed 85 per cent said they listed their home with an MLS real estate agent.

And don't forget land titles records show over 90% of sellers listed their home with an agent.

- Saying a licensed agent charges $1,000 an hour, leading the public to believe these fees are standard practice.

- A "grossly misleading" statement that implies a real estate agent takes all the homeowner's equity in fees.

When in fact studies show that homes sold privately sell for 16% less on average than those homes sold with an agent (source, NAR survey of home buyers and sellers, 2005).

- Saying it performs the same services as an agent for a fraction of the fee, when the company is not licensed to trade in real estate.

And if they perform the same services, they should have to follow the same rules that real estate agents follow. Real estate is a heavily regulated industry and Comfree skirts those regulations by claiming to only be a marketing company. How then can then perform the same services as an agent?

- Claiming customers saved more than $600,000 in fees in three weeks when in fact commission rates or fees are not reported by the listing brokerages.

- Saying real estate agents operate out of self-interest, when they owe a duty to their clients and must follow their instructions.

Real estate agents are required to provide a number of fiduciary duties to our clients, first and foremost is loyalty, meaning the client's needs come first. Sure, there are some bad seeds out there, but being part of a heavily regulated industry those bad seeds are found and disciplined

Alberta's 11,000 licensed agents want the government to set rules preventing ComFree from issuing misleading or unsubstantiated statements.

"They say they have 25 per cent of the Edmonton market, but how are they measuring that? Our stats, which we get through land titles, show 91.8 per cent of sales are though MLS." Edmonton Real Estate Board president Madeline Sarafinchan said.

Don't forget how many comfree homes don't sell and end up listing with an agent. Do those homes get counted by both comfree and the board? We hear it time and again - many homeowners try comfree only to list with an agent for a higher price and net way more money in the end, including the money they wasted paying comfree up front.

Real estate agents' commissions have always been negotiable, so there's no way ComFree would know how much their clients are saving, she said.

Private sales have always been a factor in the Edmonton market, and agents can deal with that as long as it's a level playing field, Sarafinchan said.

"But they are saying things that are largely unproveable and carrying on a negative advertising campaign. All we are asking for is fairness."

Travis Holowach, ComFree's Edmonton franchise owner, said the real estate agents are just whining because they're losing money to a company that does a better job.

"We've taken 30 per cent of their market in three years and they can't take the competition," Holowach said.

Yet another example of and untrue and misleading statement. They can't even keep it true in an article pointing out their false statements!

"You don't continue to grow by misleading the public. We've got an unbelievable number of testimonials from clients who think we do a great job, so let the public decide."

Holowach said he's glad the board has finally complained to the government after talking about it for the three years he and wife Erin have had the franchise, and he's confident it will be dismissed.

"Now we can finally put this to rest."

Something tells me it won't be dismissed...

ComFree reports it had 566 new listings from Red Deer north in July, up 68 per cent over July 2005. A total of 454 homes were sold last month, making 2,644 for the year to date.

That's nowhere near the real estate board's numbers (14,909) which only include the greater Edmonton area, not Red Deer, or Fort Mac or anywhere else "north of Red Deer".

It claims sellers have saved $59.5 million in commissions since the Edmonton franchise opened in 2002.

Holowach said that number is based on the usual seven-three commission split charged by realtors -- that is, seven per cent on the first $100,000 and three per cent on the rest. Realtors may say commissions are negotiable, but it doesn't happen very often, he said.

Holowach is sadly misinformed and again misleading the public in his statements. Commissions are negotiable and many transactions do not follow "the usual 7-3 split". Our company has had dozens of different agreements with our sellers this year alone, and our sellers have made out very well - check out our recent sales stats at

Holowach said he gauges market share by simply comparing listing inventories.

Lets see... 14909 copared to 2,644 doesn't exactly equal a 30% market share, it's 15%...and don't forget we're comparing Edmonton to everything north of Red Deer. Oh, and what percentage of their listings actually sold and how many sold below market value? We'll never know...

Eoin Kenny, a spokesman for Alberta Government Services, would say only that the department is reviewing the complaint.


ComFree, launched in Winnipeg in 1996, charges a flat $595 fee which includes advertising a home on its website and in the magazine, a lawn sign and highlight sheets for potential buyers.

The seller must decide what the property should be listed for, and ComFree does not give sales advice other than how best to present the property to potential buyers.

Homeseekers can go on an e-mail alert list so they're notified if a property they might be interested in comes on the market.

Real estate agents say that if you use a realtor you can be certain all your interests are protected in a complicated transaction.

They say they know the pulse of the current market, provide clients with an expert assessment of the value of their property, help them understand all offers and know how to negotiate an acceptable sale price.

But they don't give any sales advice...

And the Multiple Listing Service puts the property front and centre in the real estate market across Canada, they say.

A note to David Finlayson: next time you are going to report on Comfree and the real estate board, do give us a call. We'd be more than happy to share our stories of satisfied clients that we've helped purchase Comfree homes well under market value, I'm sure they'd love to tell you themselves. We could also tell you about people who tried selling their home themselves to no avail, and ended up listing with an agent for more than they were asking, and sold above list price, more than covering the real estate fees they were concerned about before listing with an agent. Some actual examples may bring some more credibility to your article.

A note to our readers: not all agents are created equal, and not all agents provide the same service. If you are considering selling (even if you are considering selling on your own) make sure you interview more than one agent, read our article on the top 10 questions to ask the agents that want to list your home. If you are considering selling on your own, read our article Tips for Selling on Your Own.

Get a free online evaluation of your home.

Friday, August 18, 2006

Top 10 Questions to ask the Agents That Want to List Your Home

If you are considering selling your home, you've probably already thought about preparing your home for sale, where you are going to move to, what sale price you'd like for your home. Another very crucial step is to interview at least three successful real estate agents who sell homes like yours in your area. Even if you think you can sell your home alone without professional help, the agents you interview won't mind. They know most do-it-yourself sellers fail and within 30 to 60 days list their homes for sale with one of the agents already interviewed.

Each agent will have a "listing presentation" during which they will outline their skills, experience and marketing strategies. Here are the key questions to ask each agent if they didn't already answer them in their presentation:

1. How much can you get for my home? Not:
  • what is my home worth?
  • what price should I list my home for?
These questions are important, but the most important thing what your home will actually sell for. The best agents will get you the best price. Be careful though, many agents will try to "buy your listing" by giving you a highly inflated price. Each agent should justify his/her answer by giving you a written CMA (comparative market analysis). This CMA should show (a) recent sales prices of comparable nearby homes, (b) current asking prices of neighborhood homes like yours listed for sale (your competition), and (c) asking prices of recently expired comparable listings, which didn't sell (usually because they were overpriced). Less frequently the report will include actual examples of the agent's sales and how they compared to the average.

After interviewing three (or more) potential listing agents, you can then compare their CMAs to see if they used the same comparable recent home sales prices to justify their opinions of your home's market value. Watch out for agents who estimate an unjustifiably high price or too low.

2. How will you market my home?

At a minimum, each agent's written plan should include a for sale sign on your lawn, putting your listing on the MLS (the most powerful sales tool available to listing agents), and showing your home's photo and information on the agent's web. Will the agent take photos of the home and when will they appear on the internet? It seems simple, but so many agents are not even bothering to put pictures of their listings on MLS these days. Ask to see examples of how the agent has marketed recent listings so you get a feel for the quality of their efforts.

3. How do your sales compare to the area average?

Some agents may tell you that their listings sell on average for 95% of list price, or some may say 110% of list price. In today's market if an agents listings are selling below list price, they are not getting the best price for their listings. On the other hand, if an agent is selling all their listings over list price, they may be purposely under pricing listings so they can make that claim. The important thing is whether their listings are selling about or below average for your area. If they can't provide these details then move on.

4. How many listings do you currently have? Will I be dealing with your or an assistant, and how often will you contact me about sales progress?

Assistants are often the sign of a highly successful real estate agent. But watch out for a "numbers agent" who takes too many listings, knowing a percentage will sell, and forgetting about the rest. You want to avoid becoming just another listing to a numbers agent.

5. How long have you been selling real estate? Are you a full-time agent? What professional courses have you completed?
The best agents will already have answered these questions in their listing presentations or in their professional brochure. There are a lot of part-time agents in this business, and generally speaking they are not nearly as involved in the market, and are often less aware of current trends than full timers. Don't necessarily dismiss a full-time, highly motivated new agent, they could be much better than an "old pro," experienced agent with too many listings to give your home sale the attention it deserves, and little understanding of the internet and online marketing.

6. What suggestions do you have to make my home more marketable? Do you recommend staging it?
Agents hate to answer this question before obtaining the signed listing for fear of insulting the seller. But smart home sellers want to know. Often a minor change, such as replacing the 1950s outdated shag carpet with a neutral fashionable carpet, can change a home's character.

Or maybe the agent will recommend removing your old-fashioned furniture and having a professional designer "stage"your home to make it look up-to-date. Staging a home for sale has become very common among the most successful agents.

7. Do you have a list of client references?

If an agent does a good job, they should be able to provide a list of testimonials from satisfied clients.

8. What sales commission rate do you charge?

Negotiating a low sales commission can be self-defeating if a lower sale price or even no sale results. If you decide to list with a so-called "discount broker" or flat-fee agent you will usually receive reduced services, and a reduced sale price.

10. Other than yourself, who is the best real estate agent in this area?

If the agent evades answering, then ask each agent what he or she thinks of the other agents you are interviewing. Respect each agent's answers. Of course, verify any negative information received about a competitor agent.

SUMMARY: I realize I skipped #9, but a top 9 list just isn't that interesting and I could only think of 9 questions, so there you go! Remember: fall is the second-best home sales season. To assure your home selling success be sure to ask each listing agent you interview lots of questions and then list your home for sale with the best agent for your situation.

Get a free online evaluation of your home.

Thursday, August 17, 2006

Homewoners Sell Record Number of Houses

CREA's monthly report shows a slowdown in July, lead by Calgary and Vancouver. Edmonton's market increased significantly, but not enough to raise the national average. An important thing to note, these stats only include resale housing, and Calgary and Vancouver both had record sales of new homes which could account for the difference.

This month in Edmonton we (at Coldwell Banker Johnston) are seeing fewer listings get multiple offers, it doesn't seem to be the feeding frenzy now that it was in August. There appear to be more listings for sale - I don't have any hard stats to prove this, it's just something we are feeling. My bet is when the stats come out for August there will still be lots of records set in Edmonton, but price increases will be less, the number of listings will be greater, and the number of days on market will be longer (July set an all time record for days on market in Edmonton).

Here is the article from CBC News:

Sales of resale homes are heading for another record this year, despite a slowdown in July and the expected softening of the market over the next few months.

Average home prices have climbed by 10.1 per cent in a year. (CBC) Average home prices have climbed by 10.1 per cent in a year. (CBC)

In its regular monthly report, the Canadian Real Estate Association said resale housing activity edged down by 2.9 per cent in Canada’s major cities last month, to 27,231 units.

But the industry's performance in July did little more than tarnish what has been a record-setting pace for the first seven months of the year. Sales are still 2.6 percentage points over the comparable period in 2005, and heading for another record, while seven major cities have broken volume records for the first seven months — Calgary, Edmonton, Saskatoon, Winnipeg, Ottawa, Montreal and Saint John.

Homeowners also did well at the bank. The average price of a house rose to $294,924 in July 2006, up 10.1 per cent over the year, with record levels in Edmonton, London, St. Catharines, Ont., and Montreal.

Resale homebuyers are on track to break new volume records this year, but CREA chief economist Gregory Klump warned that a slowdown is imminent. He expects the sales pace to decline slightly in coming months, leading to a higher inventory of unsold houses and a levelling of prices.

The CREA numbers refer to existing houses, condominiums and townhouses sold through the Multiple Listing Service, adjusted for the season. The data does not include newly built homes.

Most of July's decline was in Vancouver and Calgary, two cities that have seen record sales of new homes in recent months and record levels of construction.

"Demand for resale homes remained strong across Canada’s major markets in July 2006," Klump said, pointing to stable interest rates, strong employment levels and rising incomes.

Tuesday, August 15, 2006

CMHC Predicts Another Housing Downturn

Today CMHC released another report forecasting a cooling housing market. For almost as many years as we've seen record breaking housing results, CMHC has been forecasting a downturn. I think now they just realize that if they stick with the same message, eventually they'll be right.

Interest rates to temper housing demand
Globe and Mail Update

Rising interest rates will help cool Canada's booming housing market by next year, but that doesn't mean prices are about to fall.

According to a quarterly outlook from Canada Mortgage and Housing Corp., housing starts will rise to 227,900 units in 2006 from 225,481 last year, before sliding to 209,100 units next year.

“Higher mortgage carrying costs, due to modest increases in mortgage rates and rising house prices, will temper housing demand in Canada in the latter part of this year and next,” said Bob Dugan, the CMHC's chief economist.

Low borrowing costs, strong economic growth and a solid labour market have sparked a real estate boom in Canada. If the CHMC forecast holds, housing starts will top 200,000 for the sixth consecutive year in 2007.

Existing home sales, as measured by the Multiple Listing Service, will slip to 481,700 in 2006 from 482,788 last year, although that would still be the second-best year on record. Sales of existing homes are expected to ease to 462,200 in 2007.

”A rising supply of listings will give home buyers more choice thereby reducing the spillover effect into the new home market,” the report said. ”However, marginally higher mortgage carrying costs will ease demand for existing homes in many centres across Canada.”

The price of an average home will increase 12 per cent from $249,365 last year to $279,300 in 2006. The 12-per-cent price increase, a 17-year year high, will slow to 6.4 per cent in 2007, when ”higher listings and lower MLS sales will move the resale market toward more balanced conditions,” the report said. The average price of house in 2007 is forecast to hit $297,100.

New home construction in Alberta, where record-high energy prices have led to mass migration, is expected to reach 49,000 units this year, surpassing the previous record of 47,925 in 1978. That pace of growth will slip in 2007 to 45,000 units, CHMC said, as the rising cost of ownership bites into demand.

Central banks in Canada and the United States have been hiking interest rates, making mortgages more expensive. In the U.S., sales of both new and used homes have slowed but Canada's housing boom has yet to moderate.

In a report released late last month, the Canadian Real Estate Association forecast that home sales in major markets will set a new annual record this year. Between January and June of 2006, 186,177 homes were sold — a rise of 3.6 per cent from last year's record pace.

According to CREA, average prices climbed 11.8 per cent from December of last year to $304,328 in June.

Sunday, August 13, 2006

GDP growth forecast to pass the U.S. - Edmonton

What does this mean in Edmonton. The author of below article has two states of mind. One Canada is going to do better than the U.S. in terms of GDP growth on the other hand the Western Canadian real estate sector is going to languish. I'm no econimic expert with a crystal ball. Or at least mine has been dropped so many times that its well cracked but I have a few problems with his theories. Firstly, it is pretty evident that the growth in Western Canada is what is going to drive up the GDP for Canada. I'm not one of those Ontario is a bag of wind believers in fact if anything it is Ontario's stabilty that allows this growth and the softer employment conditions prevent all out inflation.

So what I want to know from any and all economic guru's is how will it be when Edmonton for example on an affodability scale is still more affordable than places like Ottawa, Toronto, Montreal, Vancouver and Victoria that homes here will languish. They may soften but will most likely retain its fairly solid growth. However let's play devils advocate for a second and say prices will soften. Please tell me how much and when. Until then it the chicken little wind bag syndrome. Of course prices will soften...They will also go up. How useful is that information? Not very if their is no context surrounding time frame. It'd be like me in 1909 saying house prices are going to fall. and in 1933 sticking my chest out while I walked around and say "I told you so"

Understandably it is tough to make sense out of economic data because at the end of the day the buyers are the ones who will decide where they'll spend or save. So with that in mind I do see the pace of housing prices in Edmonton slowing slowing somewhat. However I could be wrong and it could grow from 39% / year.

GDP growth forecast to pass the U.S.
Canada to assume third-quarter lead Less risk of severe
economic decline
Aug. 12, 2006. 09:30 AM

After three years of lagging the United States in economic performance, Canada is poised to get back on top.

And with all its fundamentals in great shape, it could stay there for a while.

The strong Canadian dollar — up 40 per cent since the start of 2003 — is the main reason the domestic economy had posted modest gains in recent years.

But that same dollar has benefited consumers through cheaper imports and it has kept interest rates lower than they'd otherwise be.

And it is giving the central bank ample room to cut interest rates if the U.S. economy hits a rough patch.

"It would be much easier for the Bank of Canada to switch to reverse if need be because inflationary pressures are just not as dominant as in the U.S.," said Doug Porter, deputy chief economist at BMO Nesbitt Burns. "Any inflation pressures are highly contained within Alberta."

As well, Canada's strong currency has "absolutely crushed import prices," Porter noted. Motorists ought to keep in mind that without the jump in the Canadian dollar, gasoline would be selling for about $1.30 a litre instead of in the area of a dollar, Porter added.

The Bank of Canada increased its trend-setting overnight rate to 4.25 per cent, pushing up both floating-rate loans, such as variable mortgages, and longer-term rates.

Without the strong dollar keeping inflation in line, the central bank would have been forced to hike the overnight rate to as high as 5.5 per cent, said Marc Lévesque, chief strategist at TD Securities.

"You would have seen a slower housing market and slower overall consumer spending."

Low mortgage rates have helped fuel a run-up in real estate values which, in turn, has contributed to Canada's economic expansion.

Unlike in the U.S., few people are predicting a major drop in Canadian housing prices, though the GTA's condo market and regions of Alberta and B.C. could be vulnerable to a downturn.

And while the economies in central Canada have been plodding along, the west has boomed on high prices for energy and other commodities.

Manufactured exports, however, are Ontario's key growth driver and when they suffer, so does the whole province.

Last week, Statistics Canada reported that Ontario's unemployment rate for July rose above the national average for the first time in more than 30 years.

Job creation, which has been in a bit of a hiatus in the past two months, has nonetheless been stronger than expected so far this year, up 210,000 jobs, most of them full time, with much of the growth in financial and real estate sectors.

Average hourly wages in July were up 3.7 per cent from a year earlier, easily outpacing the 2.5 per cent rate of inflation.

"Real Canadian income growth has been pretty robust with all the job gains we are getting, as opposed to the U.S. where real disposable incomes have barely grown at all," said TD's Lévesque.

Exporters continue to complain about the problems of adjusting to the surge in the exchange rate, but they are making needed investments in machinery and equipment to raise their productivity.

But just as all this investment is starting to pay off, another threat is looming.

Forecasters are warning that the U.S. economy, led by falling real estate prices, is cooling fast after posting 3.5 growth in 2005. Most economists are predicting Canada's economy will grow faster, starting in the third quarter.

Part of the U.S. slowdown is intentional.

The Federal Reserve has hiked its benchmark rate 17 consecutive times in an effort to pull down demand to what it views as a more sustainable level.

The Fed finally took a pause last Tuesday, leaving the funds rate, the interest banks charge each other for the use of Fed funds, at 5.25 per cent, compared with 4.25 per cent for the Bank of Canada's comparable overnight rate.

With an economic slowdown evident in the U.S., the question Fed watchers are now asking is when will it cut American interest rates, said Avery Shenfeld, senior economist at CIBC World Markets.

"If the Canadian dollar is still trading near its current range early next year, don't be surprised if, as a result of the downward pull on inflation, the Bank of Canada outguns the Fed in cutting rates."

Canada's outlook is also much more positive, he added, stressing we are less exposed to a U.S. housing market crash and high oil prices are not inflicting as much harm here since Canada is a net oil exporter.

"There is much less risk of Canada going into an outright downturn than there is in the U.S."

Moreover, most levels of Canadian government are in sound financial shape so they can afford to increase spending, if needed, to spur the economy, said Nesbitt Burns' Porter.

That's not so for the United States or other major economies, he said.

Friday, August 11, 2006

Alberta Land Titles Backlog

Brisk house sales cause backlog in land titles
Last Updated: Friday, August 11, 2006 | 4:14 PM MT
CBC News

People buying homes in Edmonton and Calgary are now waiting three weeks or more for their mortgage and land title paperwork to clear the system.

Normally, the wait is two to six days.

Eoin Kenny, spokesman for Alberta's Government Services, says brisk real estate sales and the inexpensive cost of second mortgages are causing the record-breaking backlog.

"For instance, in 2004-2005, we did 5.8 million transactions. Last year it was 6.5 million transactions. And we're looking to break 7.5 million this year. So that gives you some sense of just how busy those offices are."

Officials in land titles offices in both cities are working evenings and weekends to deal with a record number of mortgages and title transfers.

Kenny says homeowners can speak with their real estate agents or lawyers about how they can still safely take possession of their properties even if the paperwork isn't ready. He expects the backlog to be cleared up in September.

***More on this in a day or two but basically you need to find a lawyer and lender who accept "western protocol" in order "safely take possession" of your new home.

Tuesday, August 08, 2006

New Office Building in Downtown Edmonton - First in 17 Years

So we're finally getting some new office space in downtown Edmonton. It's been a long time since something commercial has gone up - 17 years to be exact - a sure sign that this city is growing. Commercial rents are up 70-100% in the downtown core, further evidence of the tight market. It's a three-story project at Jasper Ave, and 104 st., the article below also outlines some other upcoming changes to the downtown landscape....

Edmonton's joining the office space party
Oil money is driving the Alberta capital's commercial real estate renaissance


Special to The Globe and Mail

EDMONTON -- Something unusual will happen in downtown Edmonton next month -- for the first time in 17 years, construction is scheduled to begin on a commercial office building.

It will be modest by any standard -- just three storeys -- but it's significant given that downtown Edmonton has not seen a new commercial building since 1989.

And it speaks to the commercial property resurgence that the city is currently enjoying as part of the oil-fuelled building boom in Alberta.

Not that downtown Edmonton has been without construction, Jim Taylor, executive director of the Downtown Business Association of Edmonton, points out. Indeed, the Alberta capital's downtown has seen plenty of development on the residential side.
Print Edition - Section Front

In the late 90s, the city brought in a residential grant program to encourage home building downtown -- and that's what happened, with 12 condo high rises and four low rises added to the horizon, along with historic warehouses and less desirable redundant office space converted to living quarters -- some of which came with some commercial space on the ground floor.

While Calgary has captured most of the ink in the latest boom, Edmonton has quietly enjoyed the updraft as well.

Office vacancy rates are at a record low and industrial land is at a premium. Rents are up, space is tight downtown, and out in the suburbs, commercial properties are springing up.

Vacancies have dropped to 6 per cent from 9.5 per cent while rents have escalated 70 to 100 per cent in the past 18 months, says Todd Throndson, managing partner of Avison Young Commercial Real Estate in Edmonton.

Especially noteworthy is the change in attitude -- to a landlord's from a tenant's market -- with landlords adamant about getting the rents they seek and walking away from potential deals that don't look promising enough, Mr. Throndson says.

His colleague, Dean Wulf, general manager of Avison Young's Edmonton operation, says the tight downtown market is a ripple effect of the frenzied energy industry.

The lawyers, accountants, consultants and ad agencies who serve the industry are growing and taking up the downtown space left idle when government layoffs in the early 90s sent the rental market into a tailspin.

That, combined with the dearth of downtown office development, means any available office space is being snapped up, especially prime double-A and single-A space.

"Now, these tenants are facing sticker shock when they renew or expand," Mr. Wulf says. "They're coming off rents of $6 to $8 a square foot and your landlord gives you a renewal for $18 to $21 -- that's sticker shock."

Parking costs are rising as well downtown, which could push offices out to the suburbs, where parking is usually free, says Mike Parker, president of Cushman & Wakefield LePage in Edmonton. "We anticipate we're going to see some construction in the office market in the suburban areas."

On average, parking goes for $240 to $250 a stall a month in the downtown core.

Suburban tenants, on the other hand, typically get 2½ to three stalls per 1,000 square feet included in their office rent.

Mr. Parker predicts high land and labour costs will hinder new construction in the city centre. "If you were to put up a new building downtown, the landlord would need $28 net rent plus another $10 for operating costs and taxes. If you go out to the suburbs, the net rental rate would be $18 to $20 with $8 in operating costs."

But one developer is determined to make a go of it downtown, however modestly.

John Day says leasing arrangements are in the final stages for the first floor of the three-storey building he is developing and will co-own at the corner of Jasper Avenue and 104th Street on the site of the now-demolished Cecil Hotel.

He will only say the ground floor will be occupied by a "food tenant," while the upper floors will be large offices.

The new building, which will have 60,000 square feet, not including the 50 underground parking stalls, "will really clean up that corner" of downtown and accent Edmonton's renewal project along 104th Street in the warehouse district, Mr. Day says.

Which is why Mr. Taylor of the Downtown Business Association is enthusiastic about the new building.

"We're incredibly excited because it's not just a new building on the corner of Jasper and 104th Street . . . It's the end of an ugly derelict building that was causing all kinds of problems as the surrounding area was being revitalized."

And he's ecstatic about a planned high-rise addition to Petroleum Plaza, now a two-tower office complex on 108th Street that will add more than 215,000 square feet of office space.

The last big commercial building to be built was Commerce Place in 1989. The project marks "a significant corner we've turned in the downtown area," and Mr. Taylor says he thinks there will be more downtown office construction, given the low vacancy rate.

Jim Hewitt, vice-president of KingStreet Capital Partners, confirms the company has been granted a development permit for the Petroleum Plaza project. There is no start date yet, because, as Mr. Hewitt says, "it's still very preliminary."

Meanwhile, work continues on retrofitting the Devonian Building at Jasper Avenue and 111th Street, the former site of the province's Department of Education. Murray Brown, president of Canterra Developments Corp., says he considered converting the two-tower property to residential space, among other options, after buying the property three years ago.

"We are retrofitting this building in anticipation that there will be demand for high-end office space in the near future."

The base building will be finished late this year and ready for tenant improvements in January. "At that point, it will be the largest block of contiguous vacant space ready for occupancy in Alberta," he says.

Another downtown corner could look different in the not too distant future. The former Bank of Montreal building in the heart of downtown was recently sold to Dundee Real Estate Investment Trust of Toronto from Worthington Properties of Edmonton and may be demolished.

Edmonton is braced for the spinoff benefits associated with the more than $125-billion worth of industrial projects slated for development in northern Alberta's oil sands over the next decade.

A big challenge will be keeping pace with demand for both office and industrial space -- and labour shortages are a key issue, says Dave Young, vice-president and manager of the national investment team at CB Richard Ellis in Edmonton.

"My concern is not availability [of land]; my concern is construction costs and availability of labour . . . We're operating at almost full employment now."

Edmonton House Price Worries

The article below discusses the concern on pricing in Edmonton. I'd be worried if my home was in Vancouver, Toronto, or Calgary but right now our market still holds good value for buyers compared to other markets in Canada, and Alberta, especially when you consider employment, taxation and the province's fiscal position.

It may be true that some workers will hold off on recolating to Edmonton based the price of housing. That should curb the positive net migration that the city is currently enjoying, which is a major factor contributing toward the current demand for housing. Should the demand lower of course, future price increases will be affected. However, there are still many opportunities for savvy buyers to find properties and negotiate fair deals for those properties. In some cases many agents are having their strategy of having offers presented at a specific date back fire on them, giving buyers some good options.

If the reports of Alberta's economic position as a power house economy hold true, than it may be some time before prices in the Edmonton area weaken. How much they will weaken, how much they'll go up before they do, and how fast they will rebound from a downturn is anyone's guess. One thing is certain though, if you don't want to move to Edmonton you don't have to, but we'd sure love to have you.

House-price worries
The Edmonton Journal
Published: Tuesday, August 08, 2006

In the past few years, Edmonton held one advantage over other Alberta cities in attracting workers: Moderate housing prices. But the current boom may finally be taking the shine off that boast.

Prices in the city have jumped by 35 per cent since last summer, bumping the average single-family house to $303,304 and the average price for condominiums to $188,831.

That's still well below prices in Calgary where the average single-family unit in July was $403,630.

Or consider Ft. McMurray, where in June the average was $469,304.

Higher housing prices are a symptom of prosperity all across the province. In Red Deer, prices are almost at Edmonton levels: $297,543 for a single-family home.

Still, the hefty increases in recent months mean that housing in Edmonton is moving out of reach for many young people coming to join the boom-time workforce. With a wage of $20 a hour, you won't qualify for a mortgage for a condo at an average price of $188,000, says Madeline Sarafinchan of the Edmonton Real Estate Board.

"Everyone with patience and money will find a home, but realtors are concerned that the housing pressures are severe at the bottom end of the market," says Sarafinchan, adding that some businesses have seen new recruits leave because they can't find anything suitable.

There are uncomfortable echoes of an earlier boom here. In the late 1970s, when interest rates soared to double digits and oil prices were rising, the dream of home ownership meant impossible debt loads. The provincial government stepped in for a few years and subsidized mortgage payments, an expensive intervention that nobody wants to see repeated.

The problem right now is simply an overheated economy, says Ray Watkins, chairman of the Edmonton chapter of the Urban Development Institute, the developers' association.

Contractors are working full out and even if there were more lots available, it wouldn't be possible to get more houses built, says Watkins.

"Everyone has a labour problem," says Watkins, adding that housing industry "in all facets" is working at capacity. "I don't think anyone foresaw the record demand occurring for as long as it has."

Indeed, the increase has come breathtakingly fast. For much of the mid-1990s, housing starts for metro Edmonton stayed relatively steady, with 4,962 starts in 1997 and 5,947 in 1998 moving up to 7,855 in 2001.

Suddenly in 2002, starts spiked dramatically to 12,582 and have held at those record levels ever since.

Edmonton fortunately has a number of high-density projects on the way, in the old Heritage Mall site, for instance, and the North Edge of downtown, that will help meet the demand.

The housing crunch is not severe enough to warrant special measures now, but it's important for the province and municipalities to keep a watchful eye.

Friday, August 04, 2006

Buying Real Estate? Negotiating Tips...

Follow this reporter's instructions and you could possibly lose thousands of dollars, and you may not get that dream home you want. Although she offers insight into one particular scenario, a trained and experienced agent will have the ability to guide you through more than this cookie cutter scenario. If you follow her advice, you could end up fawning over someone's property and they may start thinking that they have underpriced their property, or worse that you are insincere. In a fast paced market like Edmonton information is your key to success.

The author's instructions are that you let the seller know just how much you love, and want to buy their home. I've had sellers read heartfelt letters written to them from buyers, when they were reviewing offers on their home. Some have liked it and some sellers have reacted adversely. The emotional attachment to their home clouded their decision making, and they considered less emotional options, especially when conditions are attached to the contract. They felt that as excited as the buyer is today, they may become emotionally remoresful tomorrow causing their deal to tailspin. They were looking for the stable option.

Not to mention a professional can assist you in properly drafting an offer that would be more likely to be accepted by a seller.

The appropriate strategy should be made in consultation to the circumstances surrounding your transaction with your agent, and your personality should be a part of the equation. You should not negotiate in a style that is uncomfortable to you, otherwise your chances of success will deminish.

If you want a journalist's opinion on writing an article, especially on how to sensationalize it so that it catches a readers attention consult them, if you want an experts opinion on something then consult the experts.

Dian Hymer: Starting Out
A few tips on appropriate negotiating posture
Originally posted on August 03, 2006

A prospective home buyer recently stopped by a Sunday open house to take a second look at a listing that caught his fancy. His real estate agent had advised him to keep a poker face as he walked through the house, and to ask no questions of the listing agent. Otherwise, he might tip her off that he was interested.

This is a popular negotiation strategy: Don't show the other party that you might be interested in striking a deal. The presumed consequence if you do show enthusiasm is that the other party (the seller in this example) will gain an advantage over you.

There is usually something that backfires. Many home sellers have strong emotional attachments to their homes. With these sellers, the sale price is important, but it's not all that matters.

For example, a couple with two small children had been looking for a new home in Oakland, Calif., for months. They fell in love with an exceptional property and decided they wanted to buy it. They were the first buyers to make an offer, but other offers followed shortly after. The first buyers' offer wasn't for the highest price.

The sellers were impressed by a letter from the first buyers in which they promised to take care of the property. The sellers had bought the house as a rundown fixer-upper and had renovated it extensively. It was important to them that the property ended up in the right hands.

When the offer from the first buyers was presented, their agent told the listing agent that the buyers would welcome a counteroffer if their price wasn't right. If the sellers hadn't known that the buyers were willing to pay more, they might have gone with the highest offer. However, knowing how committed the first buyers were, the sellers decided to offer the house to them at a higher price. The offer was accepted.

Expressing interest lets sellers know you're serious. Your enthusiasm can put you in good stead with the sellers. This doesn't mean that you have to reveal the highest price you're willing to pay, or the terms on which you'll buy the property.

HOUSE HUNTING TIP: Being the first buyer of several to commit can give you an edge. Many buyers retreat when they hear that someone else might be interested in the property. Some don't want to get caught up in a bidding war.

Others back off because they don't want anyone else to know what's on their mind. They feel that by tipping their hat, they will in some way diminish their negotiating posture. This isn't necessarily so.

In another example, prospective buyers decided to write an offer on a Piedmont, Calif., listing days before the seller was prepared to hear offers. There were three other interested buyers who vacillated between writing offers and waiting to see if the seller accepted the first offer. At the last minute, the other three buyers decided to wait and see what happened with the one offer that was written. Had the committed buyers not revealed their position early on, other buyers might have stepped forward with offers and they would have found themselves in competition.

A straightforward negotiation strategy is most effective if you can also convince the seller that you have done your homework. An earnest buyer who is preapproved for the financing he needs, and who has read all the pertinent disclosures on the property, is a buyer who will be looked on favorably by the seller.

THE CLOSING: Telling a seller that you like his house doesn't mean that you have to overpay for it.

— Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers," and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.

Interest Rates to Stay Put

The following report from Bloomberg predicts that the Bank of Canada will not raise interest rates for the rest of the year, because the unemployment rate has increased and the dollar has dropped. Here is most of the article...

Canada Lost 5,500 Jobs, First 2-Month Drop Since 2004 (Update2)

Aug. 4 (Bloomberg) -- Canadian employers unexpectedly shed 5,500 jobs in July, marking the first consecutive monthly declines in almost two years, strengthening the case for the Bank of Canada not to raise interest rates again this year.

The unemployment rate rose to 6.4 percent from 6.1 percent in June, which was the lowest since 1974, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News expected 23,500 new jobs in July and a jobless rate of 6.1 percent.

The report suggests one of the most robust aspects of Canada's 15-year economic expansion may be weakening, because of a strong currency higher borrowing costs. Economic growth stalled in May for the first time in eight months.

``This reinforces expectations that the Bank of Canada will remain on the sidelines,'' said Paul Ferley, assistant chief economist at the Bank of Montreal in Toronto.

Canada's dollar fell to 88.50 U.S. cents at 9:09 a.m. in Toronto from 88.85 cents late yesterday. One U.S. dollar buys C$1.1300. The currency reached a 28-year high of 91.44 U.S. cents on May 31.

The currency has weakened since then as investors anticipated Canada's central bank would stop raising rates. The Bank of Canada paused on July 11 after seven consecutive moves. Two days later, Governor David Dodge said he expected the high dollar and slower U.S. growth to curb demand for exports, in particular manufactured goods.


Manufacturing led the July decline with 33,300 jobs shed, the industry's biggest loss since January. The related transportation and warehousing sector shed 16,900 jobs in July. Factories have fired 224,000 workers since the end of 2002, or 9.6 percent of their staff, StatsCan said today.

Canadian Dollar

The dollar's 40 percent rise since the end of 2002 has slowed exports to the U.S., which make up a third of Canada's C$1.1 trillion economy, the world's eighth-largest. Exports fell to the lowest in a year in May as energy and lumber shipments dipped, StatsCan said July 12.

The job market has been volatile in the past three months, swinging from a near-record 96,700 new jobs in May to a loss of 4,600 in June, and the July decline that was the biggest since December.

Carmichael said the average growth of 29,000 jobs during the past three months shows the market hasn't collapsed.

Employers added 21,600 full-time jobs last month. They shed 27,000 lower-paid part-time staff, StatsCan said today. The labor force, the number of Canadians 15 and older holding or looking for a job, rose by 64,200.

Hourly Wages

Average hourly wages advanced 3.7 percent in July from a year earlier, faster than June's 3.5 percent gain. The consumer price index, the main measure of inflation, advanced 2.5 percent in June from a year earlier, and StatsCan reports the July consumer price index on Aug. 22.

The 10,100 jobs lost in the last two months compares with a loss of 25,500 during July and August 2004, the last time employers shed workers in two straight months.

There are other signs the economy isn't slipping much. The price of an existing home rose 12 percent in June from a year ago, to a fifth-straight record, the Canadian Real Estate Association said July 17. Exporters are adjusting to the higher dollar and interest rates and consumers are still spending, Governor Dodge said July 13.

Still, StatsCan's report on economic growth in May, which was released July 31, also showed declines in areas that have fueled the economy during the last few years. Retail sales, construction, and oil and natural gas production all dropped, the report said.

Full Capacity

Record retail sales, construction and oil and gas production had helped push Canada's economy past the limit of what it can make without rapid inflation, the central bank said last month. The currency and interest rate will slow economic growth through 2008 and return the economy to full capacity, the bank said in its July 13 monetary policy report.

Canada's economic growth will slow to 2.9 percent next year from 3.2 percent this year, the central bank's report said.

U.S. employers created 113,000 jobs in July, fewer than economists expected, the Labor Department reported today in Washington. The U.S. unemployment rate rose to 4.8 percent, from 4.6 percent.