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Archive for January, 2012

Why it’s a good time to buy a home

Saturday, January 28th, 2012

This is an interesting article and makes some good points and sense.

I agree that if you are thinking of buying a home there may well not be a better time, with oil prices around $100 per barrel and stable the Alberta economy is expected to lead Canadian growth in 2012.

A concern I have heard from some is, where am I left if interest rates go up, which is the the only way the can go its just a matter of time. If this is of concern, taking advantage of the low interest rates on 10 yr fixed is a safe bet. During the term of a 10 year mortgage you will have guaranteed payments and pay down a greater amount of the principal, lowering the amount to be re mortgaged.  This longer period will give the world and Canadian economy time to stabilize.

In my opinion, while there is risk in anything we do, and purchasing a home is no different, there is less risk at this time than there has been in recent history.

 

By Mark Weisleder   Fri Jan 27 2012

I believe there has never been a better time to buy a home. I’ve been in the industry for 28 years as a lawyer and I haven’t seen so many positive signs for housing, whether you are thinking or buying or locking in a mortgage.

Here’s why:

Mortgage rates at historic lows: They can’t get any lower. Four to five-year fixed mortgages at 3 per cent are unheard of. It is lower than the variable rate that most Canadians have been paying for years. Rates have nowhere to go but up, either later this year or next. If you are paying a variable interest rate, lock in now.

Canada’s appeal: This country has everything going for it — a stable banking and political environment, steady real estate market, the natural resources people want and few social tensions. That makes us a safe haven in a volatile world.

Our immigrant draw: Because of the above, we’re a draw for immigrants, often wealthy ones. When they get here, they need a home. So in my view while the real estate market may level off in some areas of Ontario, it should stay strong in most of the GTA and likely Canada’s other large urban centres as well.

Mortgage defaults: According to CMHC, over 99 per cent of Canadians pay their mortgages on time. It quite a different picture in the U.S. where 7 million homes are in foreclosure and perhaps another 7 million homeowners are under water. This represents almost 15 per cent of all homes. So while the American housing market will likely be weak for the next few years, this should not occur in Canada. Our banks are not dumping homes onto the market, so there is no downward pressure on prices.

Recourse Mortgages: In many U.S. states, if you can’t pay your mortgage, the only thing the bank can do is foreclose; they cannot sue you for any shortfall. So when homes go under water, owners give the keys back to the bank. In Canada, loans are almost all Recourse, meaning if you don’t pay and there is a shortfall, the lender can sue you for the difference. This is another reason why, in my opinion, even if times do get tough, Canadian homeowners will find a way to make the payments until things improve.

Income-to-price ratio: Another misleading statistic is that in major markets, like Toronto, the average price of a home is now 4.6 times the income of the average Canadian. This same statistic was found just before the U.S. and UK markets went into the tank. However, if you look at median incomes of Canadians against the median cost of homes, this average comes down to around 3.5, which is not dangerous. Using averages are wrong. A person receiving social assistance will not buy a home, and should not be included in any relevant statistic.

High consumer debt: The warnings about rising debt ratios must be examined carefully. The Governor of the Bank of Canada is worried that the average personal debt ratio is now 156 per cent in Canada. This means a household making $100,000 per year, owes $156,000, two-thirds of which is mortgage debt. Why is this so bad? At an interest rate of 3 or even 5 per cent, the amount needed to service the debt is manageable. Most people do not pay off their mortgages in one year. Still, this is another good reason to consolidate your debt now, at these low interest rates, and lock in.

No guarantees: Nobody can predict the future and there’s always the possibility of a major economic shock. Yet, in a U.S. presidential election year, politicians will do whatever is necessary to prevent it. If the economy goes into the tank, so do re-election chances. The U.S. is already showing signs of economic recovery.

No matter what, do not take on a monthly payment higher than what you can afford. Meet with your lender or mortgage broker in advance to figure out what you can afford before you start looking for a home. It may be the best time to buy, but you need to buy smart.

Mark Weisleder is a lawyer, columnist, author and speaker to the real estate industry. You can contact Mark at mark@markweisleder.com

Making your Real Estate needs my priority!

Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

Open house in Inglewood Sunday January 29

Thursday, January 26th, 2012

Please join me for an open house 2-4 pm 11727 127 street.

Property informaton.

Making your Real Estate needs my
priority!

 Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

Single Story For Sale in Inglewood

Wednesday, January 18th, 2012

Old world charm and modern convenience.

• 849 sq. ft., 2 bath, 3 bdrm single story-MLS®$295,000

Inglewood, Edmonton – Original hardwood floors, and cove moldings give this home old world charm. Upgraded plumbing, 100amp electrical, newer furnace, hot water tank, kitchen cabinets, appliances, all new windows, siding, and maintenance free front porch give modern convenience and reliability. The kitchen has been completely remodeled and made functional and comfortable, somewhere you will want to sit with your coffee and morning paper. The formal living room retains every bit of its original elegance. The fully finished basement has a raised engineered hardwood floor perfect for relaxing family time. Cedar lined closets show the care and thought that has been put into this home. Situated on a large lot with room enough for a garage that would make any man jealous. The perfect blend of old world charm and modern convenience. Someone is going to take advantage of all the work that has been put into this home, why not you?

Property information

Making your Real Estate needs my priority!

Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

 

Mortgage rates at an all time low.

Tuesday, January 17th, 2012

Mortgage rates hit an all time low with BMO offering a five year fixed rate of 2.99% the lowest rate in modern Canadian history. TD and RBC followed suit by cutting their 4 year rates to 2.99%.

Now here is where a good thing can go south quickly. These look like good deals however there are somethings to check out. Payment flexibility: are you still able to make extra payments? if you have to / want to sell your home what is the payout penalty? If the rates go up during the amortization period of the mortgage are you going to be able to afford the new payments, bearing in mind that just a week ago the advertised  5 year fixed rate at BMO, RBC and TD where all 5.29%? That would be a full 2.3% increase in your mortgage rate.

On a $300,000 mortgage at 2.99% with a 25 year amortization (a requirement by some banks for this rate) your payments would be about $1,418. In 5 years at the end of your term, if we use the 5.29% from a week ago, that same $300,000 mortgage will cost you $1,722, even extending your mortgage out to 30 years at the end of the 5 year term will cost you about $1,410 a month.

If you manage to negotiate this rate (2.99%) with a 30 year amortization period, after 5 years you may have the option to extend back out to 30 years, using the 5.29% the payments would be about $200 more a month.

Now we have seen the figures how does this help? Well if you are willing to accept that at the end of your 5 year term, the rates may go up and to stay on track to pay off your home within your original amortization period you will have to substantially increase your mortgage payment, or increase the time it takes to pay off your home, then it will help you.

The other group that this will help is those who already have a mortgage at a higher rate. I would encourage you to talk to either your bank or a mortgage broker about refinancing at the lower rate. Most times there are penalties involved in paying out your mortgage early, however if we use the same $300,000 mortgage and 25 year amortization, the savings in interest during the 5 year term would be in the order of  $6,400. If you where to re invest that back into a payment on the principal it would pay large dividends, by lowering your principal therefore total interest paid over the amortization period and shorten the time to pay off your home and become mortgage free!

In summary this something that should be looked at, and taken advantage of when you fully understand the possible risks and drawbacks.

Please do not hesitate to contact me. I would be happy to give you the name of an independent mortgage broker that can give you more information.

Making your Real Estate needs my priority!

Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

 

 

2011 Market statistics

Saturday, January 14th, 2012

Please find below the statistics for the Edmonton Real Estate market in 2011.

Making your Real Estate needs my priority!


Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

Average residential resale price 2005 – 2011

Friday, January 13th, 2012

Please see the information below for the average price of a resale home in Edmonton from 2005 – 2011. Some interesting numbers here.


Making your Real Estate needs my priority!


Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

2012 Edmonton Realtors housing forecast

Wednesday, January 11th, 2012

Today I attended the 2012 version of the Realtors Housing forecast. This is an event hosted by the Realtors association of Edmonton where a number of presenters recap the previous year, but more importantly look to the year ahead.

The resounding message from all the presenters was that Real Estate is regional, some of what is being reported in the media is reflective of Canada as a whole. Emphasis is being put on Vancouver and Toronto where the Average home prices are: Vancouver $728,118, and Toronto $480,421. Then look at the average household income (2009 the latest statistics available from stats Canada)  Vancouver $67,550, Toronto $66,790. In contrast to the average household income for Edmonton at $86,250 and an average home price of $319,559, this puts a little more perspective on the Edmonton Real Estate market.

What sets Alberta apart is economic growth at 4% for 2011 and a projected growth of 3% for 2012. The Edmonton economy grew 3.25% in 2011 and is expected to grow 3.75% in 2012. Nationally our economy grew at  2% in 2011 and is expected to grow 2.3% in 2012. Edmonton’s unemployment rate at 5%, is 2% below the national average, with 40,000 new jobs in Edmonton in 2011 second only to Vancouver. Levels below 5% typically trigger wage increases and in-migration.

The oil industry in Alberta is growing currently producing about 3.5 million barrels of oil a day, and increasing, and this is only set to continue. There are currently 4 pipelines in various stages of development, there is potential to produce 6.0 million barrels a day by 2021. Based on the this continued growth, direct employment from the oil sands would grow from 132,000 to 533,000 by 2035 and royalties to the Alberta Government would grow from $3.5 billion to $60 billion by 2020, assuming the continued rise in oil prices. Conventional oil producers drilled just over 2,000 wells in 2010 and where licenced to drill just over 4,000 wells in 2011.

Due to Alberta’s unique economic base it needs to be looked at individually.  As one presenter put it today “we are an economy within an economy.”

The Edmonton Real Estate market showed a growth of 2.59% in 2011 finishing out the year with an average residential price of $375,703.

So what is in store for the Edmonton Real estate market in 2012.  We heard from Mike Drotar from Servus Credit union, that interest rates have remained unchanged since September 2010. The current prime rate sits at 3.0% his prediction is that by the end of 2013 this could be anywhere between 4.0% and 4.5%, an increase of 1.0% to 1.5%. That could equate to an increase of $255 per month on a $300,000 mortgage amortized over 30 years. However any rise in interest rates must be tempered with the knowledge that Canadian households have record debt levels, so any rise may put some at risk.

Richard Goatcher presented on behalf of the CMHC and Doug Singleton on behalf of the Edmonton Realtors association. Both had the same message. With increasing migration we can expect a decrease in rental vacancy rates from 3.4% to 3.0%, and an anticipated rent increase in the order of 3%, with the average rent for a two bedroom apartment at $1,060 by the end of 2012. Opinions varied slightly on the average resale price for 2012, from $332,000 to $336,000 up about 2% from 2011. Recreational and acreage properties are expected to see little change in 2012.

I have tried to make this a quick overview. I have more detailed information, please give me a call and I would be happy to share it with you.

Making your Real Estate needs my priority!


Dave Dry 

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

Open House in Ellerslie on Sunday January 8

Friday, January 6th, 2012

Ellerslie, Edmonton – We invite everyone to visit our open house at 324-151 Edwards Drive on January 8 from 2:00 PM to 4:00 PM.

Property information

 

Making your Real Estate needs my priority!

Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

 

2011 Edmonton Real Estate statistics at a glance.

Thursday, January 5th, 2012

For those who like stats here’s 2011 at a glance.

Jan Feb March April May June
Total actives 5,633 6,389 6,885 7,715 8,180 8,432
Total Listings 2,142 2,631 2,960 3,278 3,526 3,260
Total Sales 735 1,044 1,503 1,487 1,857 1,768
Sales/ list ratio 34% 40% 51% 45% 53% 54%
Sales/ active ratio 13% 16% 22% 19% 23% 21%
Average sale price $310,766 $312,840 $327,725 $327,415 $331,974 $330,298
July Aug Sept Oct Nov Dec Avg
Total actives 8,421 8,343 8,062 7,296 6,588 5,316 7,271.7
Total Listings 3,038 2,951 2,585 2,166 1,800 1,085 2,618.5
Total Sales 1,441 1,507 1,345 1,170 1,084 827 1,314.0
Sales/ list ratio 47% 51% 52% 54% 60% 76% 51.5%
Sales/ active ratio 17% 18% 17% 16% 16% 16% 17.8%
Average sale price $334,054 $324,217 $332,782 $319,985 $321,135 $316,415 $324,124

If  you have any questions about these stats, or any thing Real Estate related I would be nore than happy to help.

Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

January Newsletter and December stats.

Wednesday, January 4th, 2012

January newsletter and December stats.

November

Change from 

October 2011 to November 2011

 

Change from 

November 2011  to December 2011

New Listings

1,800

-366

-16.8%

1,085

-715

-39%

Active listings

6,588

-708

-9.7%

5,316

-1,272

-19%

Sales

1,084

-86

-7.4%

827

-257

-23%

Average Sale price

*House and Condo sales

$296,817

$3,423

1.1%

$296,241

-$576

-0.1%

House

$365,734

$2,837

0.7%

$364,803

-$931

-0.2%

Condo

$227,901

$4,009

1.7%

$227,679

-$222

– 0.1%

 

 

What do these statistics tell us?

  As far as I see there is nothing too surprising here, while listings and sales are down for December this is not unexpected for this time of year.

 What is encouraging to see is that the relative price drop from the high in July of this year is small this bodes well for 2012.

  The article in this newsletter ‘What are the analysts saying about the 2012 market?’ has some interesting perspectives. While it is difficult to predict the future I agree with most points. The only real exception being the rate at which the price of oil may rise. If the situation in the Middle East continues to deteriorate, with regards Iran and the threatened closure of the Strait of Hormuz, then oil prices may increase more rapidly. While causing an increase in fuel and consumer goods prices, Alberta will reap the benefits with countries looking for a secure and reliable source of oil. Canada has been approached by China, to fill its ever growing need.

 Prices in 2011 finished the year $5,649 (1.7%) higher than in January and $7,918 (2.5%) higher than December 2010.

 The Edmonton market was stable with only a 6% variation from the market low in January to the market peak in July, 2010 a 10% variation and 2009 at 6%. In contrast 2007 showed a 14% variation and 2006 a massive 32%.

 My overall prediction for 2012 is a good one, the market will continue its steady climb, maybe not eclipsing the highs of 2007, but coming close, this is not necessarily a negative, a volatile market makes for unstable prices, a quick and steep climb in prices usually predicates a sudden drop as was seen through 2008.

Making your Real Estate needs my priority!

Dave Dry

Realtor, Re/Max Real Estate

Website: www.davedry.com

Blog: www.blog.davedry.com

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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