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Archive for July, 2011

Open House in Inglewood on Sunday

Friday, July 29th, 2011
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Inglewood, Edmonton  –  We invite everyone to visit our open house at 11727 127 st on July 31 from 2:00 PM to 4:00 PM.

Property information

Making your Real Estate needs my priority
 
Dave Dry
Realtor, Re/Max Real Estate
Office: (780) 457 3777
Cel: (780) 446 3727
Fax: (780) 478 7017

2 Story For Sale in Klarvatten

Tuesday, July 26th, 2011

1,796 sq. ft., 4 bath, 3 bdrm 2 story – MLS® $412,900

–  What a great family home, fantastic location, backing on to a park and playground in the quiet community of Klarvatten. With almost 3,000 sq ft of air conditioned space. Vaulted ceilings in the formal living and dining rooms along with the spacious foyer give an air of elegance. The kitchen is open to the breakfast nook and family room. French doors open on to the large deck with private hot tub overlooking a park. The main floor is finished off with a luandry / mud room off the garage. Upstairs there is a massive master bedroom with 3 piece en suite, 2 large bedrooms, and a full 4 piece bathroom. The basement is partially finished with an office, currently used as a bedroom, full bathroom with stand up shower and rec room for movies, games or to hang out – ideal for the teenager. This home has everything the growing family would like. Come, take a look, and bring the family.

Property information

Dave Dry
Realtor, Re/Max Real Estate
Office: (780) 457 3777
Cel: (780) 446 3727
Fax: (780) 478 7017

Higher borrowing costs on horizon

Wednesday, July 20th, 2011

Below is an article taken from the Globe and mail today. It spells out the end to Canada’s record low interest rates. The cost of borrowing in the next year is expected to increase, in order to try and slow inflation. This would mean higher mortgage rates: for every $100,000 borrowed a 1% increase would add $1,000 dollars a year in interest. Not only that but those who qualify for the lower rates may not qualify at the higher rate.

 This bieng said, once the interest rates start to move upwards, will buyers rush into the market to capitalize on lower rates, therefore increasing property prices?

 Record low interest rates and a stable market, are the best indicators of a great time to buy!!

From the Globe and Mail July 20 2011

Mark Carney has put borrowers on notice that he is not afraid to raise interest rates even in the face of global turmoil, if that is what it takes to keep hotter-than-expected inflation under control.

The Bank of Canada governor left his benchmark rate at 1 per cent, pointing to threats on both sides of the Atlantic and a still-sluggish performance for Canadian exports because of the strong dollar and soft U.S. demand. But, after staying on hold for a seventh consecutive time, he all but eliminated any doubt that borrowing costs will rise this year, sooner than many market observers had come to expect.

Most economists see the overnight rate climbing by 75 or 100 basis points in the next year, which would bring it to 1.75 per cent or 2 per cent, as the central bankproceeds with caution and keeps one eye on foreign developments. Those moves would be felt most by Canadians with variable-rate mortgages and other floating loans, and the central bank has fretted that many households will have trouble carrying the debt they’ve piled up as interest rates rise. As a result, economists say it’s very unlikely Mr. Carney will hike aggressively.

With the U.S. Federal Reserve holding the line on rates near zero for the foreseeable future, any Bank of Canada hikes would widen the gap with the U.S. and fuel the already surging loonie, causing more grief for exporters. The Canadian dollar jumped 0.88 of a U.S. cent Tuesday to $105.17, the highest level since April.

“The base case is very modest and parsimonious hikes, depending on the flavour of the day and how things evolve,” said Sébastien Lavoie, assistant chief economist at Montreal-based Laurentian Bank Securities and a former Bank of Canada economist, predicting an increase as early as the next decision on Sept. 7 and a benchmark rate of 1.75 per cent by mid-2012.

Nonetheless, in a teaser to a full forecast due Wednesday in Ottawa, Mr. Carney painted a picture of a domestic economy that is more than holding its own amid a range of global risks, and implied that inflation would need to be addressed soon.

The central banker left himself room to manoeuvre, saying his outlook assumes authorities in the euro zone can contain the continent’s debt crisis and acknowledging there are “clear risks around” such an outcome.

But by tweaking his announcement at Tuesday’s decision to say, “some of the considerable monetary policy stimulus currently in place will be withdrawn” – instead of “eventually withdrawn,” as in his May 31 statement – Mr. Carney made clear that if things don’t worsen, he will use at least one of his three remaining decisions in 2011 to tighten policy.

“His main mandate is to keep the cost of living advancing by 2 per cent, and you have to go with the base-case scenario that nothing goes wrong in Washington and nothing goes too wrong in Europe,” Mr. Lavoie said, noting the bank didn’t mention U.S. debt-ceiling negotiations, suggesting it believes they will be resolved before the Aug. 2 deadline.

“Markets assumed the bank thought the risk of hiking was perhaps greater than the risk of staying on the sidelines, but now the picture has changed, and the bank is showing its inflation-fighting credentials.” Indeed, Mr. Carney and his deputies said even as “widespread concerns” over sovereign debt problems have “increased risk aversion and volatility in financial markets,” financial conditions in Canada “remain very stimulative” and the growth of private credit is strong.

The central bank barely touched its growth projections for Canada from 2011 to 2013, and said the preferred gauge of inflation, which is approaching its 2-per-cent target sooner than predicted, will hover around that level through 2013. Significantly, the bank also left untouched its prediction for the so-called output gap – essentially, a measure of the slack left in the economy by the recession – to be closed by mid-2012.

By not pushing the timing further out, policy makers signalled that global risks, while worrisome, are not having enough impact on Canada to throw the domestic rebound off course.

On consumer prices, after saying for months that both total inflation and the “core” rate – which strips out volatile items like gasoline and fresh foods – would converge around 2 per cent around mid-2012, the bank conceded that core inflation, at 1.8 per cent in May, is rapidly approaching that level already.

In addition to the caveat about Europe, whose leaders are scheduled to meet Thursday in a bid to break an impasse over a new rescue for Greece that has roiled markets, Mr. Carney acknowledged that the recovery in the United States –Canada’s chief export market – has been held back as consumers tighten their belts and the world’s biggest economy fails to produce a meaningful number of new jobs.

Some economists suggested that a rate hike is more likely in October or December than in September, since the European debt saga could easily still be playing itself out later this summer, and because it will take a while for evidence to materialize that the Canadian rebound picked up in the second half after a dismal second quarter.

Angelo Melino, an economics professor at the University of Toronto who sits on the C.D. Howe Institute’s shadow monetary policy council, said the central bank struck the right balance between reassuring investors and economists that it will not let inflation get out of control, while giving itself an ‘out’ should conditions deteriorate.

To Prof. Melino, Mr. Carney’s statement marked a notable shift from the past few months, when observers had started to openly question whether the central bank was putting too much emphasis on risks that might not materialize, even as the domestic economy gathered momentum.

“They sent a signal to the markets that tightening could occur if all of these various financial-sector risks aren’t realized, and things proceed as their best guess suggests they will,” Prof. Melino said. “They still are putting a lot of emphasis on tail risks, but this statement balances things again.’’

From the Globe and Mail July 20 2011

Making your Real Estate needs my priority
 
Dave Dry
Realtor, Re/Max Real Estate
Office: (780) 457 3777
Cel: (780) 446 3727
Fax: (780) 478 7017

July Newsletter and stats

Monday, July 18th, 2011
    May Change from   April 2011   to May 2011   June Change from  May2011            to  June 2011
New Listings 3,526 248 +7.6% 3,260 -266 -7.5%
Active listings 8,180 465 +5.6% 8,432 +252 +2.9%
Sales 1,857 370 +19.9% 1,768 -89 -4.7%
Average Sale price*House and Condo sales $310,812 $4,173 +1.3% $305,631 -$5,181 -1.6%
House $380,545 $1,488 +0.39% $379,409 -$1,136 -0.3%
Condo $241,080 $6,860 +2.8% $231,853 -$9,227 -3.8%

 

What do these statistics tell us?

  The month of June as we can see turned out to be rather interesting as; most of the market seemed to remain relatively stable with the exception of condominium prices, taking a bit of a hit, to the tune of $9,227. What do I attribute this to? From my experience, and after talking to some of my colleagues, there appears to be an influx of lower priced properties on the market, combined with a healthy group of investors looking to re stock their real estate holdings, bringing down the average sale price. As we start to feel more confident in the economy, we also feel more confident in investing our money and not “putting it under the mattress”. The promise of continued low interest rates through the summer, and fear of rising rates in the fall have spurred these investors into action.

 A big boost to our confidence has come in the form of continued growth in spite of the fact that the US government is in a quandary as to how to pay its bills. I believe that the economic downturn in Canada, while real with real effects, was more emotionally than economically driven, our fear that being tied so closely to the US would drag us down too. Yes there were some that lost their job, their homes and some are still what we call upside down, meaning they owe more on their properties than they could sell them for, the majority of us still have our jobs and a roof over our heads. By way of comparison I know of a home in a stable area of the north eastern US, not one of the worst hit by any means.These people have paid an interest only mortgage, common in the US, for 7 years, this means that they still owe the bank what they bought it for. It was valued a 49% of its purchase price a few months ago. By comparison Edmonton is down only 6% from the peak in July 2007.

Making your Real Estate needs my priority
  
Dave Dry
Realtor, Re/Max Real Estate
Office: (780) 457 3777
Cel: (780) 446 3727
Fax: (780) 478 7017
The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. Trademarks used under license from CREA.
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