‘Wild card’ props up Canadian housing markets

over past decade

Inventory remains key to stability in 2011

Tighter inventory levels helped to make the last decade one of the healthiest periods on record for Canadian real estate, insulating markets in major centres from the peaks and valleys characteristic of past decades, according to a report released by RE/MAX.

The RE/MAX Housing Barometer Report measured monthly sales-to-new listings ratios in 18 major centres across the country from January 2000 to December 2010.  The report found strong seller’s/balanced conditions prevailed for much of the time frame, prompting significant gains in housing values.   The lone exception was when the market dipped into buyer’s territory during the latter half of 2008 and early 2009.  However, fewer listings served to offset diminished demand and provided greater stability. Average price increases from 2000 to 2010 ranged from an annually compounded rate of return of 4.82 per cent in London-St. Thomas to a high of 9.56 per cent in Regina. The national average was 6.82 per cent.  By far the tightest market in the nation was Winnipeg, where seller’s ruled the roost for 85 per cent of the decade, followed by Hamilton-Burlington (67 per cent), Regina (63.6 per cent), Kitchener-Waterloo (59.8 per cent) and Edmonton (57.5 per cent).

While population growth, pent-up demand, and a strong economy also contributed to the run up in activity, inventory played a major role in price growth.  The recent recession was case in point.  Supply remained largely in check, keeping prices on the upswing despite softer demand.  That is expected to continue, given an improved global economic picture, lower unemployment rates and rising consumer confidence—all of which have buoyed home buying activity since November.  While sales figures are expected to be slightly off 2010’s heated pace, housing values are forecast to continue to climb in Canadian real estate markets in 2011—with most a direct result of lower listing levels.

A number of city centres are already reporting stronger than usual housing activity out of the gate, with first-time buyers comprising the vast majority of purchasers and move-up buyers in close pursuit.  Demand and supply are on relatively even keel at present in most areas, but the traditionally busy spring season is expected to keep the market at a perfect equilibrium in the days and months ahead.  However, there may be some exceptions to the rule.  The country’s largest markets—Greater Toronto, Greater Montreal, and Greater Vancouver—are expected to head into the second quarter with fewer listings overall.  Two centres—Newfoundland & Labrador and Kelowna—are still firmly entrenched in buyer’s markets.

Inventory has always been the wild card.  Its influence is remarkable, but a number of other factors will serve to bolster Canadian real estate moving forward including land scarcity, intensification, immigration, continued infrastructure and capital spending, improving money markets and the rebounding economy.  The threat of rising interest rates and the changes to mortgage lending may also prompt a flurry of activity affecting price growth in the weeks ahead.  Yet, overall, gains in 2011 will be more moderate than those noted in the past decade.

-more-

RE/MAX Housing Barometer…2

Western Canada experienced some of the highest rates of return for real estate over the 11-year period.  While values in Regina posted the greatest percentage increase (9.56 per cent), Edmonton, (9.25 per cent), Saskatoon (9.2 per cent), Winnipeg (9.01 per cent), Kelowna (8.42 per cent), Greater Vancouver (7.8 per cent), Calgary (7.7 per cent) and Victoria (7.59 per cent) all outperformed the national average. 

Equally strong gains were posted in Quebec.  While solid balanced market conditions prevailed for much of the decade, housing values in Quebec City and Montreal rose 9.2 and 8.48 per cent respectively on an annually compounded basis. 

Increases were more moderate in Ontario and Atlantic Canada—with the exception of Newfoundland & Labrador, where values escalated 8.14 per cent on average.  Ottawa led in terms of price appreciation in Ontario at 6.78 per cent, followed by Hamilton-Burlington at six per cent, Kitchener-Waterloo at 5.69 per cent, the Greater Toronto Area at 5.35 per cent, Moncton at five per cent, and London-St. Thomas at 4.82 per cent. 

There’s no question that price growth has been solid over the past decade, but history tells us that exceptional growth supported by sound fundamentals is healthy.  Concern is only raised when the underpinnings are insufficient to justify the trajectory.  By all accounts, Canada’s real estate market measures up to conventional wisdom, and the faith in homeownership has not been misplaced.

While the statistics are impressive, they alone cannot tell the tale.  The gains realized over the past decade speak to the tremendous resiliency of the Canadian residential housing market.  Considering catastrophic events, both natural and manmade, that occurred throughout the period—SARS, forest fires, ice storms, 9/11, a recession—the performance of the real estate sector proved that much more significant.  It remained a consistent bright spot supporting economic growth and ancillary spending, and subsequently helped lead the nation out of the greatest downturn in recent memory—its hardy nature heightening its appeal as a long-term investment.

###

RE/MAX professionals lead the industry in terms of experience, education and sales. In Western Canada, they average about 16 years of experience, and across the network, hold a higher number of professional designations than associates of any single competitor.

RE/MAX Premier Market Presence,Premier Quality Professionals

RE/MAX professionals lead the industry in terms of experience, education and sales. In Western Canada, they average about 16 years of experience, and across the network, hold a higher number of professional designations than associates of any single competitor.

Premier Brand Name Awareness

The RE/MAX hot air balloon trademark is one of the most widely recognized trademarks in North American business and is now a global brand. No other real estate organization has the level of brand recognition and definition of RE/MAX. The brand draws buyers and sellers and as a result no one in the world sells more real estate than RE/MAX.

Premier Customer Satisfaction

Repeat and referral clients are the lifeblood of the real estate business. Approximately 70% of RE/MAX business comes from repeat and referral clients, a testimonial to the high caliber of service RE/MAX customers have come to expect from their Sales Associates.

A survey completed by RE/MAX found that 95% of RE/MAX customers report overall satisfaction with their RE/MAX Sales Associate, 92% say they will use RE/MAX again and 93% will recommend RE/MAX to others. This is, by far, the highest rating in the real estate business.

Premier Community Citizenship

RE/MAX is a front-runner in terms of giving back to the community, often devoting endless support to countless charities and local causes. The RE/MAX sponsorship of Children's Miracle Network is a great example of RE/MAX community citizenship. Since 1992, RE/MAX has been a major contributor to the Children's Miracle Network; a North American fund-raising organization dedicated to generating funds and awareness programs for the benefit of Children served by its over 170 associated hospitals. RE/MAX across Canada raises over $4 million annually on behalf of 14 Canadian children's hospital foundations.

As well, RE/MAX of Western Canada created the "Quest for Excellence Program". This bursary program was established to recognize the success and on-going pursuits of Western Canadian students. A "Quest for Excellence" involves any student in Grade 12 who demonstrates passion, commitment and dedication, positive attitude and enthusiasm for on of the 6 categories. RE/MAX presents 24 cash bursaries of $500 each. The categories are Leadership, Sports, Technology and Trades, Fine Arts, Performing Arts and Community Service. RE/MAX is proud to recognize students, in the very communities in which we live and work, for their outstanding achievements. Education is the building block of our future and if the children we hear from every day are any indication, our future has never been brighter.

RE/MAX is committed to help raise awareness of the ongoing need for organ donation. CA of T assists Canadians in making informed decisions regarding organ, tissue and bone marrow donation. The www.transplant.ca [1] site provides some national information regarding organ and tissue donation, but more importantly acts as a portal to the many provincial organizations that are mandated to oversee organ and tissue donation programs across the country.

Yard Sale for the Cure

As a national presenting sponsor of Yard Sale for the Cure, RE/MAX associates support the need to raise funds to find a cure for breast cancer. This one-day event, held the last Saturday each May, is dedicated to hosting yard sales accross the country, with the proceeds going towards breast cancer research and treatment. 

Premier Market Share

In large part, our community minded top producers who provide industry leadership, experience and excellent customer service under a respected company banner add up to leading market share. RE/MAX dominates virtually every market in Canada, in terms of market share. On average, RE/MAX outsells the competition 3 to1 across Canada. RE/MAX is supported by over 35 years of brand name development, referral services, promotional support and other benefits that today are an integral part of the RE/MAX network of over 100,000 Sales Associates in over 7,000 offices in 65 countries worldwide. RE/MAX has the network to provide the best real estate experience throughout the world.

 

Source URL: http://www.remax-western.ca/remax-advantage

Mistake #1.  Not Getting Pre-Qualified

Before looking for your next home take the time to get pre-qualified by the bank or mortgage broker you choose.  This can save you hours of searching for homes in the wrong price range or worse, purchasing a home and then finding out you don’t qualify for financing.  Pre-qualifying gives you peace of mind, helps narrow your search criteria and most importantly, gives your RE/MAX agent a negotiating edge by being able to alleviate the sellers concern over financing. The latter is especially important should a competing offer surface.

Mistake #2.  Not Shopping For Mortgage Terms

Rates are negotiable! Banks will sharpen their pencils to get your business especially if you have a good credit rating and bring other business to them e.g. RRSP’s, general account, savings etc. Posted rates should viewed as a starting point. You need to know what the best rate is and this is usually done by get competitive quotes. Also, ask whether the bank will cover appraisal fees, and about buy-out fees, penalties, payment options, portability etc.  The time spent can save you thousands of dollars over the life of the mortgage.

Mistake #3.  Not Getting Professional Inspections

Nobody wants to purchase a home only to find out later there are defects, latent or otherwise.  Ensure you obtain inspections where needed e.g. home inspection, structural engineer, insect, radon etc.  If the inspection identifies deficiencies you may be able to negotiate the purchase price to cover required repairs or make your satisfaction of the inspection subject to the homeowner remedying the problem. Your RE/MAX agent can advise you on inspections you should consider.

Mistake #4.  Not Using A Professional Agent.

Your RE/MAX agent can help you make a purchase with the least amount of problems.  He or she can ensure the price you pay is market value.  They can offer expert advice on what to look for, conditions to include, negotiation strategy etc. After all, they work for you.

Mistake #5.  Buying First Before Selling

If price is important you should always sell your present home before buying another.  It has the advantage in letting you know exactly how much money you will have available for your next purchase.  Selling your home first allows you to place fewer conditions on your purchase which makes your offer more attractive to a seller.  They often will demand more money to take a “subject to” offer which takes their home off the market.  The other advantage is if you find a terrific house, chances are others will also find it attractive and you stand to lose it if you can’t make an unconditional offer.

Mistake #6. Not Knowing The Full Cost Of Buying

Know all the costs associated with your purchase.  Consider the following costs:   legal fees, transfer tax, property taxes, new home landscaping, fencing, appliances, window coverings.

Source URL: http://www.remax-western.ca/6-mistakes-buyers-make

Housing performance expected to accelerate in 2010,

as economic stability returns to Canadian markets, says RE/MAX

Fifteen markets to set new records for average price in 2009

In the midst of one of the most tumultuous economic periods in recent history, residential real estate has proven to be a safe harbour, with sales and average price expected to post gains in most major Canadian cities in 2009, according to a report released by RE/MAX.

The RE/MAX Housing Market Outlook for 2010 examined residential real estate trends in 23 markets.  The report found that sales are forecast to recover in almost all major centres by year-end 2009, led by an anticipated 45 per cent increase in Greater Vancouver. Two markets --Ottawa and Quebec City -- are expected to hit historic highs in the number of homes sold.  Average price should post new records in 65 per cent of markets surveyed this year.   As economic performance ramps up across the country, so too will residential real estate.  Eighty-three per cent of markets (19/23) are expecting sales to increase over 2009 levels while housing values are forecast to escalate in 91 per cent (21/23) of Canadian centres in 2010.  The remaining markets will match 2009 levels.

Approximately 465,000 homes are expected to change hands nationally in 2009, a seven per cent increase over one year ago.  Canadian housing values are forecast to close the year at $318,000, up five per cent from $303,594 in 2008. By year-end 2010, the number of homes sold is predicted to climb another two per cent to 475,000 units.  The average price of a home is also expected to experience an uptick, rising two per cent to $325,000 – the highest level in Canadian history.

Some of the greatest percentage gains were reported in Western Canadian markets in 2009– demonstrating the higher the peak, the lower the valley.  That said, the recession barely registered on year-over-year activity in most major centres.  The economic fundamentals in place going forward ideally position the ten provinces, and the sector overall, for further growth.

The upswing in residential housing values speaks volumes.  By year-end 2009, average price is expected to increase in 15 of the 23 markets surveyed, led by St. John’s, NF (15 per cent); Quebec City, QC (eight per cent); Regina, SK (seven per cent); Saint John, NB (six per cent); and Winnipeg, MB, Ottawa, ON, and Greater Toronto, ON (five per cent). Other noteworthy developments include shattered price benchmarks in Greater Vancouver at $600,000; Toronto at $400,000; Ottawa at $300,000; and Quebec City and St. John’s at $200,000.   St. John’s will once again lead the country in terms of percentage increase in average price in 2010 with a projected upswing of 11 per cent.  Quebec City and Regina are expected to experience escalation of six per cent, while Calgary, Kelowna, and Victoria are forecast to climb five per cent next year.  Victoria, Kelowna, Edmonton and Calgary – all down marginally in 2009 – are all positioned for growth in 2010.

2009 was without question the year of the house.  Real estate not only defied industry and analysts’ predictions in 2009—it’s performance went well beyond the realm of expectation by boosting consumer confidence levels and ultimately kick starting the national economic engine.  While low interest rates were a principle factor driving home buying activity, no one can discount the value that Canadians place in owning a home.

The major frontrunners in terms of unit sales appreciation in 2010, are all located in Western Canada, including Kelowna with an anticipated upswing of 10 per cent in housing sales; Calgary with an expected increase of eight per cent: and Victoria, which rounds out the top three with a seven per cent hike forecast for unit sales. 

Canadians continue to demonstrate their commitment to homeownership – regardless of the economic climate.  No where in Canada is that more evident than in Quebec. The province, with one of highest percentage of renters in the country, is well-poised for an escalation in homeownership levels as renters enter the market en masse to take advantage of ideal market conditions. Prices remain well under the national average, making ownership more attainable and leaving more room for appreciation that’s been long overdue.

A number of factors will help prop up activity going forward, including improved economic conditions, continued low interest rates, rising consumer confidence and solid capital spending which will buoy employment.  Inventory will once again assume the wildcard role, with any decline placing upward pressure on prices.  Multiple offers will remain the exception in most markets, more commonplace on quality entry-level product which remains in tight supply. 

1.

In most cases, buying or selling a home

requires disclosure forms, inspection

reports, mortgage documents, insurance

policies, Real Property Reports and titles.

A knowledgeable

help you avoid delays or costly mistakes.

2.Do your homework before you start looking.Decide specifically what features you want in your home and which are most important to you.

3.Get your finances in order.Review your credit report and be sure you have enough money to cover your down payment and closing cost.

4.Don't wait to get a mortgage pre-approval.Talk to a lender and get overqualified for a mortgage before you start looking.

5.Don't ask too many people for opinions.It will drive you crazy.Select one or two people to turn to if you feel you need a second opinion.

6.Decide when you could move.When is your leases up?Are you allowed to sublet?How tight is the rental market in your area?

7.Think long-term. Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer?This decision may dictate what type of home you'll buy as well as the type of mortgage terms that suit you best.

8.Don't let yourself be "house poor". If you max yourself out  to buy the biggest home you can afford,you'll have no money for maintenance or decoration or to save money for other financial goals.

9.Don't be naive. Insist on a home inspection and ask to see if any recent renovations done to the home have development permits.

10.Get help hire a REMAX REALTOR. Their duty is to work for you.Most times their professional real estate fees are paid by the seller of the home.

2.Savings.Building equity in your home is a ready-made savings plan.Over 10 years homes on average have appreciated 2% per year in Lethbridge. That means if you buy a home today for $250,000 it will be worth approximatley $300,000 in 10 years.

3.Perdictability.Unlike rent,your mortgage payments don't go up over the years so your cost may actually go decline as you own your home longer.How ever,keep in mind that property taxes and insurance cost will rise.

4.Freedom. The home is yours.You can decorate any way you want and be able to benefit from your investment for as long as you own your own home.

5.Stability.Remaining in one neighborhood for several years gives you a chance to participate in community.

The so-called "short sale" of a home can be a viable alternative to foreclosure and will become more prevalent as millions of adjustable-rate mortgages reset over the next 18 months.

There is no ‘right’ answer. In the end, it’s really about what works best for you and your family. Here are some things to think about.

Location

In real estate, you’ve probably heard it’s all about location. Families should bear that in mind when choosing a home:

New homes are most often built in subdivisions away from the city’s core.  The lots may be smaller than you’d find in older neighbourhoods and the houses are built closer together.  Coming from the same builder, the homes may look very similar, with minor differences in colour or siding. There won’t be many trees or landscaping. While there will be essential services (water, gas), there may not yet be adequate public transportation.

Resale homes are most often found in established neighbourhoods. There are fixed local services, parks and schools. The lots may be larger, although the homes may be smaller.  You can often find more individuality in older neighbourhoods.

top

Amenities

These are the kinds of things you’d like to have quick access to, such as schools, fitness centres, grocery stores and other retail outlets.

New homes are often built with future promises of schools and parks. However, they may not be constructed until after the development is completed. These neighbourhoods away from the city core may be closer to large retail outlets offering more competitive prices.

Resale homes are already part of an established area  – schools and parks have been built, neighbourhood conveniences established. There is less likelihood that new development will take place.

top

Size

According to the Canadian Mortgage and Housing Corporation (CMHC), the average size of a Canadian house in 2004 was 1800 square feet. That’s a big leap from the average 800 sq. ft. recorded in 1945 and the 1075 sq ft. noted in 1975.

New homes may be bigger than their older counterparts, answering today’s lifestyle demands that include open layouts, ensuite bathrooms, storage space and attached garages.

Resale homes may have more interior walls, creating more rooms but less of an open feeling. There may be more character to the homes – ceilings, archways and built-ins to make the home distinctive.

top

Technology

Today’s modern family is so comfortable with technology that it’s become an expected part of everyday life.

New homes, particularly if you’re buying before construction, can be wired for 21^st century living, including multiple phone lines, high-speed Internet and extra cable outlets.

Resale homes may not be wired to handle all of our tech toys. There may be fewer electrical outlets in the home and an electrical system that may need to be upgraded.

top

Efficiency

As the costs of heating and electricity increase, homeowners discover the state of their windows, furnaces and foundations can make a big difference in their monthly expenses.

New homes must meet higher energy standards. New building materials boast of lower energy costs for homeowners, including glazed windows and thicker insulation. The appliances offered by builders are more energy-efficient.

Resale homes will cost more to run, unless the systems have been upgraded. It is expensive to replace older windows and furnaces but those improvements will cut down on those expenses in the future.

top

Maintenance

Moving into a home is more than just unpacking boxes. You’ll have to devote your time and money to keeping it up.

New homes are just that – new construction, new foundations and new fittings. In Alberta, builders who are members of the New Home Warranty or National Home Warranty Program offer limited protection for homeowners for materials and workmanship. New appliances are covered by the manufacturer’s warranty, not the builder.

Resale homes equal increased maintenance, especially if the previous owners didn’t maintain it. It could be harder to match the existing materials and there may be a significant investment for a total refitting.

top

Interiors

When you imagine yourself in your new home, you want to make sure the inside is something you can live with.

New homes are a blank canvas – literally! You can pick your paint colours, flooring, window coverings and cabinetry. You can customize details to your heart’s content or within your budget!

Resale homes either grab you with their décor or get you imagining how your design stamp will look. Resale homes often include window-coverings, light fixtures and appliances, savings that may factor into your budget.

top

Health and Safety

No matter what you choose, feeling safe and secure in your home should be high on your priority list.

New homes feature materials to keep the space healthy. For example, asbestos and lead are no longer used in construction. Many new homes feature hard-wired smoke detectors on every level. As well, a sturdier electrical power system may be installed to deal with today’s heavy electrical demands.

Resale homes come with a history. As a proactive buyer, find out all you can about how the home was maintained or any structural problems or issues. Have the home inspected before you make your final decision.

top

Future Development

The way your neighbourhood looks today could change, depending on future construction plans and zoning.

New homes are built in a subdivision, but that may not be the end of the construction.  If there’s a vacant field near your house or a pristine view, check out the city or town zoning board to find out how the land is zoned and if more development is planned for the future.

Resale homes, generally, aren’t subject to the same kind of development going on in the suburbs. Neighbourhoods will remain intact, although nearby future road projects could affect the home’s value and your ease in getting around.

top

Price

You came into this project with a budget – the amount of money you could spend for your purchase and the variety of costs associated with it.

New homes are generally more expensive than resale ones. The cost of materials, labour and land has all increased as cities and towns build out from their centre core. Fees for bringing municipal services to the new area are also factored into the price. Builders have a base price for their homes and you may discover there are costs for the homeowners’ association, architectural controls and other mandatory fees.

Resale homes are priced with a number of factors in mind: location, condition and current market selling trends. Prices for these homes are also influenced by neighbourhood desirability or closeness to the downtown core. Renovated homes can account for large price variations within the same neighbourhood.

top

The Decision to Buy

REALTORS^® are prepared to help you with your choice.

If you choose to buy a new home, a REALTOR^® may be involved in representing the builder (for example, at an open house) or representing you, the buyer.

Should you choose a resale home, a REALTOR^® with access to the Multiple Listing Service^® can help you find the home to fit your budget and your dreams.

Using a REALTOR^® means you can be confident you’re getting a trusted professional to take the journey with you.

If you're buying, the purchase of a home is probably the largest single investment you will ever make and if you are thinking of doing it alone, you may want to reconsider. All the details involved in the home buying process can be confusing. A REALTOR^® has the time, resources and contacts to make the home buying process as trouble-free as possible. You can trust a REALTOR^® to protect your interests and to look after the details.

If you're selling, a REALTOR^® can walk you through the more than 140 steps needed to complete a real estate transaction. Selling your home is a very complex procedure that involves large sums of money, stringent legal requirements and has the potential for costly mistakes.

• REALTORS^® in Alberta were the first in Canada to achieve mandatory professional development for the members of their industry.

• REALTORS^® in Alberta use plain language contracts carefully designed to provide maximum protection to you, the consumer.

• REALTORS^{® __} and only REALTORS^{® __} offer the Multiple Listing Service^®, a database of properties for sale. The MLS^® (which includes mls.ca) is a powerful marketing system that provides wide exposure for properties ^__ a benefit to both buyers and sellers.

• REALTORS^® adhere to a Code of Ethics and Standards of Business Practices that are strictly enforced by the local real estate board. When you deal with a REALTOR^® you are assured of the highest level of service, education and integrity.

• REALTORS^® can save you time, money and sleepless nights. See 'Why Should I Use a REALTOR^®' below to find out how a REALTOR^® can help you, whether you are buying or selling.

• REALTORS^® have a wealth of information on various topics, including tips on how to add value to your home, how to use your RRSP to buy a house and what costs to expect during the course of the transaction.

• REALTORS^® use the Agency Relationships guide, developed by AREA, to explain the relationships between the parties to a real estate transaction and the service expected of a REALTOR^®. To learn more about agency disclosure, view the Agency Relationships page.