My Edmonton Realtor® Blog

I try to keep on top on local trends and reports for my clients (as much as my real estate business allows).  If you’d like to comment on any of these postings, please feel free to either phone me directly on (780) 984-7696 or send me an e-mail using my contact page.

Edmonton Realtor® Peter Estephan
 

Friday, February 5, 2010 - Old Masters get New Home at Renovated Art Gallery of Alberta

The celebrated works of Edgar Degas, Francisco Goya and Yousuf Karsh, along with those of their Canadian counterparts George Bures Miller and Janet Cardiff all have a new home in the city.  The Art Gallery of Alberta has been completely renovated, complimenting the masters’ artworks with curved white ceilings and an expanse of clean lined polished metals.

10,000 tickets were up for grabs for the grand opening this past Sunday and many took advantage of the online reservation service to secure their spots.  Sisters Germaine Chalifoux and Jeannette Filthaut were among the lucky ones.  They lined up on the dishy red carpet outside the newly finished gallery doors with 9am tour tickets in hand and were two of the first to enter.

Visitors covered the three story structure in a one hour whirlwind tour, meant to focus on the highlights.  The two sisters will be back to spend more time just taking in all the art collections and getting a more intimate look at the new building.

As with most public projects, there were some comments about the money being better spent on social programs rather than a new art gallery for the city.  Even so, most of that mind set did want to go inside and see what all the fuss is about.  The general consensus is that the modern, airily styled building is a great addition to the city.

Tuesday, January 26, 2010 - Edmonton Lady Accused of Real Estate Fraud

A woman in Edmonton has recently been charged with fraud for allegedly defrauding fellow investors.  The woman was able to steal over $200,000 with her scheme in which she claimed to have real estate investment opportunities in which clients could invest capital.  Her name is Celine de Castro, and she is charged with nine counts of fraud and three counts of using a forged document.

Multiple victims made numerous complaints to the Red Deer police in August, after large sums of money were provided to Castro to purchase what she claimed was property under foreclosure by the bank.  Police say she was not running a business and that most the victims were referred to her by associates who may or may not have been in on the ploy.

The RCMP is currently helping the victims regain as much of the stolen money as possible, but much of the money given to Castro at the beginning of the scheme, in 2007, may be forever lost.

A court date of February 9, 2010 has been set for her to appear in Red Deer Provincial Court to face the charges.  In a unrelated case, Celine de Castro is also facing another fraud charged which occurred between 2008-2009.

Thursday, January 14, 2010 - No Bubble Spotted by the Bank of Canada - Yet

The Bank of Canada has been keeping a close eye on the recovering real estate market making sure there are no signs of a real estate bubble. So far, so good. In light of that it is unlikely that interest rates will be raised until at least the fourth quarter of 2010. To do so prior to that, with Canada’s real estate market leading the nation’s economic recovery, would likely be a big mistake.

In April the Bank of Canada reduced its lending rate to .25 percent bringing borrowing rates down to what they were during the Korean War. The nation experienced a 67 percent increase in home sales in November 2009 over January of that same year. The average price per sale went up 19 percent during the same time frame, translating into $337,231 per home.

Concern over property being over valued is perhaps justified. Economists estimate there is currently a 5 to 10 percent overvaluation of properties but this is expected to adjust as more homes come on the market. Listed inventory is on the low side due to people hanging on to their properties while waiting for values to rise.

If indications of a bubble are found, the government would most likely take the step of increasing the minimum down payment requirement rather than increasing the interest rates during the first part of 2010. Interest rates are expected to increase in the last quarter of the year.

Right now business owners and consumers are enjoying the low interest market and ease of credit requirements. The Bank of Canada will keep watch for that bubble and act accordingly should it arise.

Tuesday, December 15, 2009 - November Home Construction Jumps 236 Percent in Edmonton

Edmonton homebuilders have reason to celebrate this holiday season, with construction of new residences up 236 percent in November versus a year ago. Per preliminary data from Canada Mortgage and Housing Corporation, November marks the fifth consecutive month to show an uptick in housing starts versus the previous year.

Jim Sirup, who is executive vice-president of Jayman MasterBuilt, commented that his company is operating at levels comparable to the years 2002 and 2003, and that his workers are considerably busier than they were in the fall of 2008. Sirup noted that after a slow start to 2009, Edmonton home buyers began to take notice of attractive interest rates as well as lower costs for labour and materials. Jayman is currently managing 25 home starts monthly, for a total of 300 residential starts in 2009.

Construction has begun on 938 residences in the Edmonton area in November, as compared to only 279 during November 2008. These residences include 605 single-family homes, as well as town homes and condominiums. The level of housing starts was so high in November that it nearly reached the peak number of 1,091 starts achieved during November 2007.

Housing market analyst Richard Goatcher reported that many of unsold new homes from November 2008 have found buyers. This has prompted builders to create more inventory for the spring 2010 home-buying season.

Starts for multiple-unit homes, which include row houses and apartments, rose to 333 residences for November, as compared to a meager 55 for the same time in 2008. This surge is attributable to a large increase in construction in the row house category, which rose to 110 starts in November versus 23 for the same period last year. Some 160 semi-detached homes were started at the same time, compared to 32 in November 2008.

Friday, December 11, 2009 - New LRT System in Phoenix and Tempe Already a Huge Success

Tempe, AZ is a suburb of Phoenix, and the place was mainly a collection of cheap motels, trailer parks, adult bookstores, warehouses, and other struggling shops.  The town had crime and prostitution problems, but all of that seemed to change when the city opened a new light rail system a year ago.  The 32 kilometre line runs from downtown Phoenix to Tempe and Mesa.  Since then, residents say the neighborhood feels much safer and busier.

Even despite the recession, some shop owners say they see sales up over ten percent since the light rail began running.  The rail system has attracted enough demand to begin constructing solid, upscale public housing. 

The LRT system, known as METRO, has pleased many citizens of Phoenix, and Hillary Foose, spokesman for the METRO project, says that the project has seen huge success with over $7 billion in public and private investment money.

Land prices near the new METRO stations in Tempe rose over 400% after the line became operable.  The project seems to already be a huge success within the first year of the project, and the rail system has provided huge opportunity for a metropolitan area such as Tempe.

Friday, November 20, 2009 - Five Great Acquisition Tips

To begin, usually the best deals on property exist in low-income neighborhoods.  Not only will buyers find great deals, if they plan on renting the homes, these neighborhoods are home to tenants who rely on the government to pay the rent, so owners can be guaranteed to receive the rent.

Second, for the investor who may not have enough money, find a partner who is able to finance the deal.  Profits can be split 50/50.  Make a team in which one person has time to search and the other person has the money to put down.  A person who lacks money can search for properties for a person who lacks time but has great financials.

The best way to get a feel for the overall market in a specific area is to consult multiple brokers.  Each broker will have different listings, unique insights, and additional information about the area.  Expand you options and consult more than four real estate brokers for the best due diligence.

Understand what the qualification requirements are for Section 8.  Its best to buy a house that qualifies for Section 8 so that it is easy to rent under the government’s aid program for tenants.  Payments will be much more sure since they are guaranteed by the government.

Also, do not speculate.  If you cannot make a hefty profit from the day you buy, reconsider the deal.  Keep looking, in a down market there are always good deals.
 

Monday, November 9, 2009 - First Time Homebuyers Rule Current Housing Market

Based upon studies conducted by real estate experts, the current market offers some unique chances for first time homebuyers.

If you’ve been contemplating the purchase of your first home or condominium but procrastination seems to be your best friend and fears concerning prices dropping and the instability of the economy have you on edge, there’s no need to worry because the time to buy is now. According to a recent board of financial and real estate professionals assembled by the Bank of Montreal as part of a newly orchestrated information kit for first time homebuyers, the recent market offers some authentic chances for first time homebuyers.

The board of professionals didn’t mince their words when it came down to the near destruction of the housing market over the previous years. As a matter of fact, the senior economist of the Bank of Montreal, Sal Guatierri, showed that home sales were down by as much as 40% national and that the construction business will continue to spit out jobs for the upcoming six months at a never witnessed since the early 1980’s. But the president of Century 21 in Canada, Donald Lawby, added that the truth is just as complex as it is less alarming than indications would show through statistics. He also added that the real estate market is always local which is evident in the Windsor and Edmonton market which are considerably different while the worst market was found in Vancouver/Lower Midland area. But the type of housing had to be taken into consideration as well. According to last year’s statistics, the top-end property sales were extremely low while the entry level ones which have a tendency to completely drive the market showed signs growth and productivity.

Today’s Real Estate Market

One of the most obvious; yet important modifications in the make-up of today’s real estate market is a successful close to the sort of speedy-flipping conjectures that helped caused prices to hit the roof during the height of the most productive years. The panellists would usually agree that while there are no sure signs that prices would hit a decline the steep drop shown over recent months are complete and that self-effacing, more typical increases are predicted to return, especially for people who are purchasing a home in place of an obvious investment. So it’s fair to conclude that affordability and worth is a lot more solid; now getting attractive mortgage rates are a foregone conclusion.

Wednesday, October 14, 2009 - Mortgage Borrowers Still Targets Of Fraud

Just after the beginning of the decade, fraudulent real estate lending was prevalent and many Canadian solicitors participated in a host of fraud schemes which cost borrowers hefty sums of money. Though the practice has subsided with changes in regulations and an increase in borrower knowledge, mortgage fraud still exists.

Deceptive mortgage practices in Canada track the most popular areas and most expensive homes, according to experts. Markets such as Ontario are plagued by the problem more than less populous regions.

Even educated borrowers with deed security on their property stand a chance of being deceived. The complicated process of buying property makes it ideal for obfuscation, and fraud cases often involve professionals in the business.

Though the number of new cases is down, the dark economic climate in both the U.S. and Canada mean mortgage fraud remains attractive. Certain niche types of schemes, such as prohibited drug-making set-ups using vast areas of land or sublet properties listed under another’s name, have come to light in this decade. The volume of future fraudulent real estate loans may be restrained only by the originality of the scoundrels involved.
 

Sunday, September 29, 2009 - Edmonton drought conditions lead to new fire restrictions

There have been drought conditions in Edmonton for almost the entire month of September. The average rainfall for the month, as reported by the Weather Network, is approximately 40 millimetres. However, Edmonton’s cumulative rainfall this month has only been 7 millimetres.

Ron Jeske, the local fire marshal in Edmonton, was heard saying that the weather conditions being so dry has led to an increased risk of fires. Because of this danger new restrictions have been implemented for the safety of all Edmonton residents. These restrictions will remain in effect until the current weather conditions subside. Failure to abide by the restrictions will result in fines.

The key points of the restrictions are:
1) No fires are allowed in any park areas using wood, briquettes, or charcoals.
2) Absolutely no open-air burning is allowed.
3) Existing fire permits are suspended, and no new permits will be issued during the current weather conditions.
4) Legal backyard fire pits are still allowed. However, it is imperative that residents exercise the utmost caution while using backyard fire pits, charcoal barbecues, and other ignition materials.

Similar restrictions have been passed in neighboring Strathcona County. However, the forecast is optimistic; for there is a possibility of rain before the month ends.
 

Sunday, September 13, 2009 - Alberta leads Canada’s ending Recession

According to national economist, demands for energy is rising in the world’s up-and –coming markets, resulting in increasing commodity prices in Alberta over the next two years.

Economist say Canada’s recession is over; in fact the country will lead all G-7 peers in economist growth next year. It is predicted that Canada will see growth in 2010 by two per cent and by 2011, 3.8 percent. Alberta’s economy will grow by 2.5 percent in 2010 and by 4 percent in 2011.

Housing prices has aided to stabilize Alberta’s economy. Though natural gas prices remains obstinately low. In agreement with Statistics Canada’s new housing price index, contractors’ selling prices improved by 0.3 per cent in July after a 0.2 per cent fall in June. This was the earliest improvement at the national level since September 2008. For Calgary, they increase by 0.5 per cent, which was the biggest monthly increase since March 2008. However, on a year-to-year basis, new home prices were still down 7.3 per cent in Calgary and 3.2 per cent nationally.

Economist predicts a steady growth in Alberta, However, Todd Hirsch, senior economist with ATB Financial in Calgary states “It may be a while until Alberta regains its title as fastest growing economy”.

Friday, August 21, 2009 - Canada’s real estate market jumps in July

Canada’s housing sales established a record for the month of July, the Canadian Real Estate Association announced Friday. Home sales also marked their steepest year-to-year increase in two years. Business has been particularly brisk in the western part of the country, and buyers are taking advantage of low prices and low interest rates.

A total of 50,270 homes were sold over the multiple listing service in July, up 18.2 per cent from the same time last year. Homebuyers chose the five-year fixed-rate mortgage above others with some lenders still offering rates at around four per cent.

The surge in home sales is a marked turnaround for a market that was painfully slow just last winter. Consumers seeing an opportunity for good buys rushed to take advantage of good prices and rates before they begin to rise again. By the end of July, there was about 4.4 months of inventory left on the books compared to nearly 13 months of inventory on the market in January.

According to CREA economist Gregory Klump, the MLS statistics in July indicate a trend toward improved housing sales. The number of new homes entering the market is down helping keep inventory low and stabilizing prices.
 

Monday, August 10, 2009 - New Homes Continue To Be Built In The Local Market

More builders are being active in building new homes in the Edmonton area, a direct result of the upswing in the resale market.  Over the last quarter, local home builders have seen a 50% increase in the amount of consumers coming to visit their show homes which subsequently has led to an increase in sales volume.

Most of the activity is due to the pent up demand in the market, which has now trickled down to the new home market.  Consumers are starting to realize that prices are good in comparison to their incomes and what they can afford.  Prices in the new home market have gone down around 20%, which is making them attractive to many people.

The current supply has been sold now forcing builders to build again.  Most builders are trying to become a little leaner in response to the current economy, but it’s not long now before the market activity leads to more people buying homes in every segment of the market.