Edmonton Real Estate Blog

Weekly Update on the Edmonton Real Estate Market

Here is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:

New listings: 599 (617, 550, 558)
# Sales: 293 (254, 273, 321)
Ratio: 49% (41%, 50%, 58%)
# Price changes: 554 (511, 522, 563)
# Expired Listings: 270 (261, 787, 72)
# Canceled/withdrawn/terminated listings: 65 (55, 158, 163)
Net loss/gain in listings this week: -29 (47, -668, 2)
Active listings for single family homes: 4236 (4242, 4183, 4457)
Active listings for condos: 2910 (2901, 2882, 3094)

We had a question this week about the number of vacant and never lived in homes on the market, out of the 4236 single family homes on the market 1316 are vacant and for condos 1054. In other words, 33% of the listings on MLS are vacant!

Flaherty Speaks: "No Bubble!"

"There is no bubble in the Canadian housing sector."

That's what Jim Flaherty told reporters in Calgary yesterday. He says there is concern with the longer amortizations, and home purchases with little or no money down (hence the changes made last week to government-backed mortgages) but "Flaherty said he isn't fretting about the health of Canada's banks, even as subprime mortgage woes hammer financial institutions in the United States."

He also said that while the economy is going through "turbulent" times "our economy is strong."

Blame Alberta! Whether Prices go up or Down it's Our Fault!

When prices were skyrocketing, Alberta was praised for bringing up the national average sale price, and now prices are falling and we are to blame for that too! At least according to the media interpreting stats released by the Canadian Real Estate Association yesterday.

According to the report new listings have reached record levels nationally (up 8% from the same time last year), while sales are decreasing (down 13%).

"New listings reached record or near-record levels in Toronto, Vancouver, Ottawa, Regina, and Saskatoon. This more than offset a decline in new listings in Edmonton and Calgary, which continue retreating from peaks in March."

Has Canada finally caught America's cold?

"The Canadian real estate market, while cooling, is still much different than the U.S. market with its record low number of foreclosures or defaults" says the President of The Canadian Real Estate Association, Calvin Lindberg. In the United States home prices dropped by 14.1 per cent in the first quarter of the year, according to the Case Shiller national home price index."

The stats show prices are up for the first half of the year - 3.2% over last year at the same time and 1.4% from the end of 2007. However, prices for June dropped .4% and this seems to be what the media has grabbed onto.

From the report:

"The slight decline in average price comparison reflects the impact the surge in average price in Calgary and Edmonton had last year. The average price in these markets retreated after rising dramatically last year, but has stabilized since March 2008 in line with a balanced market. "

From the media:

• Housing not so hot, Winnipeg Sun
• Calgary Home Sales Take 32% Slide, Calgary Herald
• First Decline in Nearly a Decade, Metro Canada
• Home Prices Slip for First Time in 9 Years, ReportOnBusiness.com
• HOUSING: Warnings grow of further weakening in Canada, Alberta Index
• Homebuyers get a break as BC house prices flatten, Vancouver Sun
• Housing prices drop across Canada, But Ontario still strong, CityNews
• Home Sweet Home gets Cheaper, The Gazette (Montreal)

Nearly everyone of those articles pegs the price drop on Alberta, when we actually saw average prices increase in June. Oh well, I guess it's nice to get some attention after years of being ignored!

Anyway, there are certainly interesting times ahead for us (Edmontonians, Albertans, Canadians...Earthlings...), lets hope the ride isn't too bumpy.

How NOT to Expire: Top 4 Tips to Improve the Salability of Your Home

We had planned on posting this last week, but got interrupted by the changes to mortgages in Canada. So without further adieu...  A simple salability checklist.

This is not intended to be an all purpose list but it is intended to help some people give their heads a shake. Here are my top four tips to avoid having your listing expire (and to get your home sold!):

1. Pricing. This is very important and is partially determined by supply and demand. I don’t care if there are 30 units for sale just like yours asking the same price if none of them are selling that won't help you. Look at the ones that sold and when then they sold. Best bet hire a REALTOR. Some will tell you to use an appraiser and I’ll tell you I’ll see you in 6 months when you haven’t sold.  Especially if you understand how appraisals work. Certainly your competition is an indicator but if they aren’t selling then figure out who is and price accordingly. Again, best bet here is to hire a REALTOR. 
2. Marketing.  Okay people this is going to sound really harsh but is worth spending some time on.  Where is your property going to be marketed?  How often and for how long?  What type of marketing?  What is the quality? (samples would help you here).  If you don't ask, you get what you get, and if what you get is the do it your self hand book that says you’ll save the commission in one breath and in the other to reduce your price by the amount you’ll save I’ll see you in another year when you still haven’t sold.
3. Service. However you sell your home or your property servicing your sale is hugely important.  This in and of itself could be an entire set of blog posts but a few examples include scheduling of appointments, following up on showings, feedback, working with interested parties, providing information and communication, monitoring changes in the marketplace, monitoring the transaction, identifying and dealing with issues, potential issues and so on...
4. Accessibility. Make your property as accessible as possible and as attractive as possible. The REALTOR has the huge advantage through the MLS since most listings require very little notice and the agents always have access to the key box. This is why your home should always be in showing condition.  You never know when the buyer I'm showing may want to change directions and view your home instead of the ones I have set up.

If you follow these simple steps you’ll at least increase your chance of selling in a time when over 80% of the homes on the market each month don't sell.

Rainy Days and Mondays Never Get me Down

My smile widens with each passing day and each member of my team returns from their holidays. The weekend was great weather to show properties in.  Sure beats -30!  Even though I was short Sara who was volunteering at the “jump with hope for kids with cancer” horse show to raise money for kids with cancer research, as well as three other people.  The light at the end of the tunnel was there, and like a kid just waiting for the last two days to finish it has arrived.  Only Lisa remains on holidays and that lightens my load significantly.

Even though July is almost always a ligter month in terms of sales its still a busy month for those around.  There is no question though that it is a funny market.  Some listings get tons of attention and interest and still others almost none.  Pricing can have a lot to do with that especially when you look at the buyers options.  Almost every buyer I work with now there are cross over properties they can look at that increases their choices.  If they are looking for a one bedroom there are probably some two bedrooms in their range.  If they are looking at something with 2400 square feet there might be some 2600 square foot homes to consider.

Showing properties this weekend to a couple of out of town buyers just amplified this thought.  It also amazes me that with so many listings on the market just how few are actually competing.  An old rule of thumb for me going back to the 90’s was that 50% of what was on the market for any given buyer was “crap” (based on their criteria).  Today that’s probably up to 70% in my opinion.   So that leaves 30% of the listings actually competing for the buyers.  The sales obviously suggest a different story.

Anyway, even though it's a rainy Monday it’s a very sunny day for me.

Weekly Update on the Edmonton Real Estate Market

Here is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:

New listings: 617 (550, 558, 686)
# Sales: 254 (273, 321, 310)
Ratio: 41% (50%, 58%, 45%)
# Price changes: 511 (522, 563, 693)
# Expired Listings: 261 (787, 72, 74)
# Canceled/withdrawn/terminated listings: 55 (158, 163, 290)
Net loss/gain in listings this week: 47 (-668, 2, 12)
Active listings for single family homes: 4242 (4183, 4457, 4415)
Active listings for condos: 2901 (2882, 3094, 3111)

Fun times out here right now... we went from dead calm on the long weekend to chaos right after the long weekend and now it's reasonably calm again. At least that's how it's going at our office. All in all I'd call this a pretty average week (compared to the last few months anyway).

The Realtor's association is reporting the average sale price for July so far is $340,214 which is right about where we ended off in June.  There have been 523 sales so far this month, which suggests we'll hit about 1620 sales by the end of the month, which is pretty typical for July, but would put us ahead of last year for the first time this year. Our prediction is that sales will fall more in line with last years pattern, with the exception sof September which always seems a bit soft, we expect it to be significantly stronger then last year. If that does happen, there is the potential that we will end out this year with as much inventory as we ended off with last year. Of course, that all depends on how many new listings come on the market, and a few other factors.

Have a great weekend!

By the way congratulations to Gord McCallum of First Foundation Residential Mortgages who was voted one of the top 50 mortgage brokers in Canada. (#16 I think).  Great job Gord!

Breaking News - No More Zero Down, 40 Year Mortgages

We interrupt the current programming to bring you this breaking news.  According to CTV news the Federal government is making significant changes to some controversial lending protocols in Canada.  The main change is the elimination of the 40 year amortization, the second amounts to the elimination of O% down mortgages being eligible for mortgage insurance.

To be completely honest this has sideswiped me somewhat as I was not even aware these changes were being contemplated.  My first thought is right policy, wrong timing.  My second thought is what impact will this have? Apparently, according to CTV, the impetus for this is to prevent a U.S. style melt down.   If that’s their motive for these changes then Its probably too late.

I personally like the changes, I'm just a little uncertain as to the timing - why wasn’t it sooner in the year when the housing cycle was beginning its upswing of activity? The reality is the rules are the rules, and the demand will be what it is. So if fewer people (according to the rules) can buy then its good news to the rental market, but overall I suspect the impact will be reasonably minimal.

The impact of this move is also lessened by the fact in Edmonton now that housing prices have become more affordable than last year. One of the reasons the 40 year amortization period was brought in was to deal with the rapid acceleration of housing prices, and since that isn’t the case anymore it may not be needed anymore.

Across Canada though the changes should have a definite impact. The elimination of the 0% down insured mortgage will affect the lower tier of the market and then the move up market. I’m not sure of the benefit of this if the buyer can meet the TDSR (Total Debt Service Ratio) required and can afford the payments what does 5%. I’m no actuary but I’d bet the percentage of defaults of 0% down to 5% is minimal at best.

This move will stir some activity prior to its implementation deadline (October 15) as some buyers who are currently in the market act to take advantage of their situation, but I would have to think the pent up activity caused by this would beminimal. There may be a more significant flurry of refinancing activity as people who are carrying a number of unitended long term hold investment properties act to lower their payments as much as possible to make riding the market out a little more palaple.

Maybe this is a new trend for this regime though just like the changes in income trusts. No discussion just action. I’m not sure what’s worse - bad rules or the thought that the rule will constantly change without discussion and without warning. We'll have some more thoughts about this over the next few days.

The government press release is here.

Expired? Expect the Unexpected.

If you're one of the hundreds of Edmonton home owners who've recently had you're listing expire I bet you never thought that after months on the market your listing would end by expiring instead of selling.

So what happended?  Many times I get asked this question (more and more frequently it seems these days). Usually with the seller's frustration directed at the previous agent. Reality is there are two sides to every equation but there are several reasons a property may not sell:

• Initial Pricing – This is the obvious one but not the only factor. It may have been the initial pricing strategy that caused the home to be left behind the market. Regardless of how much information is out there on the market some sellers believe things will bounce back in the fall.  Just like last fall many people thought it was going to bounce back in the Spring.
• Poorly timed price reductions - If you reduce your price when no one is looking or at a time when it may not make an impact there is no point in lowering your price. During a long weekend is an example of a poor time to make a price reduction (or to come on the market for that matter).
• Poorly planned price reduction -  A price reduction itself is not helpful if a property is still way over the market value, or it is simply reduced to where it should have started - especially if that price may no longer be applicable.
• Ineffective marketing - poor or few pictures, incorrect information and poor marketing strategies can totally nullify a properly priced property.
• Service – a buyer's call unreturned or slowly returned can be as bad as poorly handling your contact with your potential buyer. Improperly qualifying a buyer and accepting their offer could result in a missed opportunity while your property is essentially tied up and off the market.
• Accessibility - getting potential buyers into the home is the only way it's going to sell. If your pricing and marketing are working and getting appointments, it's now up to you to make sure they can view the home. If you refuse showings or have uncooperative tenants you are decreasing your chances of selling.
• Slob factor -  yes it does happen. I’ve booked my appointment with the seller a day or so in advance and the besides the impressive array of bongs and empty liquor bottles is random piles of laundry, the weekly used dish collection and the always popular ruffled sheet look.  No matter what the price or the marketing this can kill a buyers mojo for your property.
• Improper negotiation strategy – Hey you’re new on the market and you got an offer and now its time to play hardball.  Maybe a good idea maybe not.  One thing is consistent with people who contact us regarding their unsold property...they received an offer on and rejected it and wished they had it back now.

One thing is for certain, if you re-list with the same pricing and marketing strategy you're just heading down the same road you were already on.

Tomorrow a Simple checklist to help you review your salability...

Just How Does MLS.ca Work?

Occassionally we get phone calls from home owners asking why their home doesn't have photos on MLS.ca, or why their listng doesn't have the same information as another in their area - apparently some people think WE are the MLS! I can assure you we are not the MLS, we are just a small brokerage in West Edmonton.

That being said, we do have a very good understanding of how the MLS works and would like to clarify a few things. First off, MLS.ca has just been replaced by Realtor.ca! The old URL will still work but it will redirect you to the new site. There are some significant improvements on the new site, including interactive, searchable maps - yes, you can now search by map! You can also search by address and MLS number and more.

But just how does your listing in little old Edmonton get to Realtor.ca? It starts with a listing input form - your Realtor will fill out a very thorough 8 page listing input form and may ask you to check it for accuracy and sign the form. Some Realtors will then fax this form to the MLS department at the Realtors Association, who will then enter the listing into the Edmonton database within 1 business day. Other Realtors will "broker load" the listing directly to the MLS database in Edmonton, which allows the Realtor to control exactly when the listing goes into the database (more on that in a minute).

Listings are uploaded from the Edmonton database to the national database daily. In other words, there is a delay between your home appearing in the Edmonton database and the national database.

When it comes to photos.... if the listing has been faxed in, the Realtor needs to wait for notification that the listing is in the system, then they can go in and upload the photos for the listing. If the Realtor has "broker loaded" the listing they can add the photos to the Edmonton database immediately.

In my opinion, it's very important that the photos are uploaded right away. Why? Because as soon as the listing is in the Edmonton database it is emailed out to all the buyers looking for a home like yours. If it goes out without photos you've missed your first (and very important) chance to make a good first impression.

Anyway...if all is working properly, once the photos are in the Edmonton database they should be uploaded to the national database as part of the daily upload but sometimes there are delays.

And just to be clear, the Multiple Listing Service® is a co-operative marketing program among members of the REALTORS® Association which ensures maximum exposure of properties to the greatest number of potential buyers. It is available only to REALTORS®.

Weekly Update on the Edmonton Real Estate Market

Here is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:

New listings: 550 (558, 686, 627)
# Sales: 273 (321, 310, 257)
Ratio: 50% (58%, 45%, 41%)
# Price changes: 522 (563, 693, 628)
# Expired Listings: 787 (72, 74, 202)
# Canceled/withdrawn/terminated listings: 158 (163, 290, 62)
Net loss/gain in listings this week: -668 (2, 12, 106)
Active listings for single family homes: 4183 (4457, 4415, 4382)
Active listings for condos: 2882 (3094, 3111, 3105)

The monthly stats just came out yesterday so I'm going to keep this brief. That's the biggest drop in inventory all year, and the highest number of expired listings. I guess people don't have a big imagination when it comes to expiry dates. I would expect we will see a lot of those come back on the market, but I also am hearing a lot about sellers trying to rent out their "second" homes. Our thoughts on that are here...

As you can see inventory is dropping, sales will also drop as the year goes on. Please note I have changed the start date for the chart below to January 08 so it is only showing stats for this year now. Ineresting how the new listings and sales trends are almost parallel with about 400 more listings than sales on average.

Alright I guess I wasn't that brief....sorry...have a great weekend!

Edmonton Real Estate Market: Has Inventory Peaked?

The numbers are out for the Edmonton real estate market for June 2008. You may remember back in April we predicted inventory would peak by June and it looks as though it may have peaked in May.

The number of new listings in June was down from May by 7% to 3985 which had more of an impact on inventory than the flat-lining sales:

Prices are also holding fairly steady at $341,376:

Single family home average prices dropped 0.5% while condo prices rose 0.5% over May, while single family homes are up .25% since the beginning of the year and condos are down 3%.

As you can see inventory remains above the normal levels for Edmonton, this means buyers have a lot to choose from and sellers have a lot of competition:

So I thought I'd throw in a new chart this month: Supply vs. Demand. A lot of people seem confused - how can prices be dropping when Alberta's economy is so strong? Well it's a simple story of supply vs demand, as you can see, thins are a little out of whack:

Both the absorption rate and the sales to new listings ratio suggest we are in a balanced market (the absorption rate is (5.8 months, which means if inventory and sales remained steady it would take 5.8 months to sell all the homes on the market):

    

Monthly Update Coming Soon

My sincerest apologies for not having the monthly stats updated yet. There are 8 people who work at our company, 6 of whom are currently on vacation so Sheldon and I are focused on our client's needs at the moment. As soon as the board releases the monthly figures I'll be able to post our update but I won't be able to post any preliminary figures as I normally do. It does appear that June will look a lot like May, with sales and average prices about the same as May (and April for that matter). Thanks for your patience.

Weekly Update on the Edmonton Real Estate Market

Here is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:

New listings: 558 (686, 627, 757)
# Sales: 321 (310, 257, 280)
Ratio: 58% (45%, 41%, 37%)
# Price changes: 563 (693, 628, 617)
# Expired Listings: 72 (74, 202, 625)
# Canceled/withdrawn/terminated listings: 163 (290, 62, 62)
Net loss/gain in listings this week: 2 (12, 106, -210)
Active listings for single family homes: 4457 (4415, 4382, 4287)
Active listings for condos: 3094 (3111, 3105, 3061)

Chalk this one up as the best week Edmonton home sellers have seen all year! The most sales and the fewest listings in a week in 2008 adds up to a sales to new listings ratio of 58% which could be the only seller's market we see this year. The question is, is this a blip or has the market pendulum started to swing the other direction? Personally, I think we'll see lower sales next week with the kiddies out of school and summer vacations on the brain. In fact, I think this week could have been the peak for the year.

The average sale price is holding pretty steady - we're at $344,368 so far for the month - and the average price per square foot is also holding ($279 SFH and $259 Condo). 

Have a Happy Canada Day Weekend and enjoy the amazing weather and activities Edmonton has in store for us for us.

Who knew moving could be so much fun?

We've been extremely busy over the past little while at our little company....Not only did we recently move days after I had surgery but one of our agents went on a family reunion tour of Norway.  Ufta. Another one just decided to head out and celebrate her wedding anniversary which leaves me a little in the lurch. Thankfully Sara's just back from visiting her mom and dad in Ontario to help out before I become a complete basket case.  Just in the nick of time! Oh well its not like its going to cause any hair loss.

Some thoughts on what is going on with Edmonton real estate:

• While its too early to call June sales should be slightly up or the same as last month, and the month before that, and the month before that.  We'll see what July's like but if early indications are correct it should be just the same as the past 3 months.
• A recent supreme court case regarding an agenty's duty during an open house makes me wonder if sellers are going to start requesting that their REALTOR has General Liability coverage? While Errors and omissions insurance is mandatory, GL is not. I wouldn't recommend an inspector who's not covered by worker's compesation or have E&O, I think it will get to the point that it's a must.
• On another note we recently attended a meeting for our franchise. It is fairly large in the U.S. with over 118,000 agents and over 142,000 world wide.  A Sr. exec from the master franchise spoke about the issues that Real Estate companies are facing with the states. It's interesting to hear the inside scoop from their perspective.  In a nutshell there are a number of markets in serious trouble and a number of them are doing very well.  We just are hearing more about the markets that aren't doing well.  Their expectation is for a turn around sometime in 2009, whatever that means.  It does remind me of the September "Prices plunge" article in the Journal when the average price slipped 1% but in December when the average went up 1.4% that article was buried in page 4 of the business section
• I also here alot of talk that now isn't a good time to buy a home - so is it better to buy when inventory is low and competition for properties is extreme?  Granted many have said that right now is not a good time to buy because of high inventory and the potential for falling prices which may indeed be a valid arguement.  So when is a good time to buy?  It totally depends on the buyer and their circumstances of course. If you are buying though you may have to gag chicken little.

#1 Reason to Get an Appraisal

I recently had a client referred to me who had put an offer on a million dollar+ property being sold privately. They put their offer on the property with the hope that they would sell their own property and everything would be hunky dory. The only conditions were a standard financing clause and the usual inspection.

It turned out that the seller was asking $200,000 more now, than when their listing had expired on the MLS. The buyers thought that they were getting a steal of a deal at $200,000 below their current asking price.

When I met with them to review the value of their property and the current market conditions their eyes got a little wider, that's when they asked for some information on the property they were buying.  Since they weren’t being represented by someone else I could put my two cents in and say “are you crazy? Nobody wanted it at the previous price on MLS after 6 months and the market has not improved.”

The long and the short of it is the comparable sales were not close to their offer price, and the bank's appraisal was significantly less then their offer price, which meant they would have to cover the significant shortfall in cash. 

I asked what conditions they had on their offer: they didn’t know.  I asked who drafted the offer: the meek reply was a lawyer assisted them with an Alberta Real Estate Association purchase contract.

So what’s the big deal? If you have experience in these matters you’d know that even though the property doesn’t appraise out they could still qualify for the mortgage, especially with their income and equity. Therefore, even though the appraisal was significantly lower than the agreed to purchase price, their financing condition did not relieve them from their contractual commitment to purchase the property.

A better protection in a case like this is an appraisal condition that gives the buyer the option whether or not to proceed if the value of the appraisal is lower than the purchase price.  Given the current market it should not be hard to get an appraisal for higher then the purchase price since the comparables taken are generally from a period when the market was performing better.