Calgary Housing Market Blog

Beware of massive pay-out penalties

2010-03-05T05:28:51Z

With today's low interest rates some sellers are getting unpleasant news when it comes time to sell the house and pay off the mortgage.

Most fixed rate mortgages come with a payout penalty (also sometimes called a pre-payment privilege) that is often calculated as an interest rate differential. This means that the bigger the difference between the rate of your mortgage and the current interest rate, the bigger your penalty. In the worst cases these penalties can reach tens of thousands of dollars.

One more crucial piece of information to find out before you sell your home, our policy is to verify the mortgage terms on all listings to make sure payout penalties don't come as a last minute surprise on the possession date.

February 2010 Calgary Real Estate Market Report

2010-03-02T15:57:00Z

Bring on the headlines about the "Hot Spring Market"! Have you noticed how positive the Real Estate news is all of a sudden? The market statistics for February were just released and show another big increase over last year in terms of the number of single family homes and condos sold during the month.

How meaningful is that when we consider how slow February 2009 was for real estate? Last month there were 1,035 single family homes sold, which is up 25% from 2009 but still 17% below 2008's numbers. Price meanwhile has increased 10% from last year to a current average of $458,254 but this is still a few percent away from February 2008's average of $471,696.

The numbers for condos are similar, sales were up 56% from last year but are almost on par with 2008 levels. Prices increased 5.2% from last year to $282,880 and are still 9% below 2008 levels.

Overall Calgary Real Estate market absorption rate for February 2010I'm not mentioning any of these things to be negative, only to keep the recent flurry of activity in perspective with the recent talk of a housing bubble. The new mortgage rules that take effect in April might slow things down a little but will probably have a positive impact overall by making sure people don't purchase more expensive homes than they can actually afford when interest rates finally do rise. Most people I've been talking to are still favouring longer-term fixed rate mortgages anyway; the new rules which apply to qualification for variable rates wont effect those buyers at all.

I'm still feeling positive about the market, February was a busy month and continued to build on the strong momentum that we started the year with. The absorption rate, which tracks the amount of inventory available based on the number of buyers in the market is currently 3 months for single family homes and 3.3 months for condos, which is considered to be a "balanced market".

What do you think will happen with the market this year? Will interest rates be a major factor? Please share your thoughts in the comments below.

Open House Saturday - Mt. Pleasant 2:00 - 4:00

2010-02-22T17:48:56Z

This Saturday I'll be hosting an open house in Mt. Pleasant at 614 19 Ave SW. (Map). Click here for full details of this home.

A stunning 1 and 1/2 story house recently renovated with 2 bedrooms and a den. The master bedroom takes up the whole second floor and includes a 3pc bath. Downstairs contains the other bedroom, den and bathroom with a clawfoot tub. The living room is accentuated with laminate flooring for easy maintenance. The renovated kitchen comes with granite counter tops and striking stainless steel appliances.

New mortgage rules from Flaherty - or are they?

2010-02-16T15:48:39Z

Jim Flaherty (Finance Minister) announced new mortgage rules today aimed at making sure people don't buy more house than they can really afford. The rule changes are:

Borrowers must qualify based on the 5-year fixed rate even if they choose a variable rate.
Refinances cannot be for more than 90% of the home's value (down from 95%).
Minimum down payment on secondary properties raised to 20%

The new rules come into effect on April 19th, 2010. There had been talk that the minimum downpayment would be raised from 5% or the maximum amortization of 35 years reduced, neither of these changes took place.

In my opinion, today's changes are very minor and probably wont have much of an effect on the overall market. The third point raising the minimum downpayment on properties that won't be lived in by the owner is obviously aimed at preventing people from buying multiple homes on speculation, this is a good move. A large reason for the overbuilding in Calgary a few years ago was buyers intentionally getting into positions where they owned multiple homes because they believed the prices would only continue to go up at a rapid rate.

What do you think? Please share your thoughts in the comments section below.

What can you claim for home reno tax credits?

2010-02-12T19:00:00Z

I'm sure I'm not the only one who will soon be sitting down to a pile of receipts from Rona and other stores trying to figure out which of the purchases qualify for the home renovation tax credit. Here's Canada Revenue Agency's page outlining what does and does not qualify.

Qualifying Expenses

Windows & Doors
Basement Development
New Furnace
Re-shingling a roof
Landscaping

Ineligible Expenses

Tools
Financing costs
Furniture
Appliances
Expenses incurred to the rental and/or business part of an eligible dwelling

I'm no tax expert but to me that means that renovations to a home office or basement suite aren't eligible.

Another interesting point from the website applies to condo owners and common-area upgrades. Check out the bottom of this page for details. If eligible renovations were done by the condominium corporation to common property, you can claim your portion of the expenses.

What is 'Moving Calgary Forward'

2010-02-11T18:36:15Z

Several people have asked me what I mean by 'Moving Calgary Forward', is it just a domain name and a slogan for my business cards or does it mean something to me? Basically it's a way of thinking about my job and what I do for my clients.

Real Estate is about important steps in our lives.

It could be moving away from the family home for the first time (or the second or third time for that matter), buying a starter condo or house, combining homes with a partner, making room for a family to grow, building an investment portfolio, downsizing or buying a recreational property.

Real Estate plays a major role in all of these pivotal moments in our lives.

I believe that it's not only about finding a place to live, it's about building the home and the lifestyle that we choose. Whether it's helping my clients buy their ultimate dream home or making an important step along the way, I believe I have a role to play in helping my clients realize their goals and move in the right direction, in other words, 'Moving Calgary Forward'.

Holmes Inspection Video Online

2010-02-11T18:26:38Z

I know at least one reader in particular (and I'm sure many others) will be happy to know that you can now watch full episodes of 'Holmes on Homes' and 'Holmes Inspection' online.

New Competition Bureau Developments - going to tribunal

2010-02-08T20:30:18Z

Today there is a new development in the ongoing action of the competition bureau's attempt to change the Canadian Real Estate Association rules about basic MLS® listings and what level of direct access consumers are given to the MLS® database. Unable to reach an agreement with CREA, the competition bureau has decided to take the dispute to a tribunal.

Basically there are CREA rules seen as anti-competitive because they limit the options that Realtors® are able to give consumers about which services they pay for. The competition bureau would like to change the rules to make it possible for a Realtor® to charge a fee to list a property on the MLS® system but not provide any further service such as ongoing marketing, presentation and negotiation of offers, arranging buyer showings etc. Basically a 'For Sale By Owner' service but with access to the largest real estate website in Canada, which has been created at great expense over many years, by Realtors® and Real Estate boards.

In my experience, most consumers who are dissatisfied with their Realtors® are unhappy because they don't receive enough service - not because they get too much. There are already plenty of "discount" (or limited service) brokerages in business who will list your home for next to nothing, and you get what you pay for. I enjoy providing good service and I hope that the standards in the industry aren't lowered even more.

However, it seems that change is inevitable when it comes to online access to real estate information. In a time when consumers have come to expect everything to be made available online for free, organized real estate might not be able to hold out much longer. Should the Canadian Real Estate Association even be trying to limit these developments? Or should they open up the system completely and let the market decide if hiring a professional Realtor® is worth the price.

From my point of view there are already plenty of options available to people who feel that Realtors® aren't worth the price and that we don't provide enough value. If you're in this group, you can go to Welist.com, FSBO.com, Comfree etc. The market has already responded to this do-it-yourself segment of consumers. An unintended consequence of lowering the level of service required from Realtors® could be that these FSBO services will be hurt as sellers wanting a discount service go straight to the MLS® and cut off these businesses from their market.

As with everything else on this blog, this is strictly my opinion on the matter... As an individual Realtor®, I'm in no position to put up a fight one way or the other - I'll simply adapt to changes as I always have to continue providing my clients whatever level of service they desire at competitive prices that provide excellent value.

I'm very interested in opinions on either side of this issue - please share your thoughts in the comments section.

Read the marketwire press release about todays developments here.

Tough Listing: Fisherman's cottage with exceptional views (of two nuclear power plants)

2010-02-04T02:03:22Z

I think it's only natural to photograph a property from the most flattering angles but is it possible to take the technique too far? Check out this exceptional cottage on a nature reserve, which just happens to be located next to two nuclear power plants mysteriously absent from any photo.

Open House Saturday - Auburn Bay 2:00 - 4:00

2010-02-02T22:35:35Z

146 Auburn Bay Close SE
$609,900

View all photos & impressive details here

This Stunning Home is better than a Showhome. Beautiful Baywest Olympia III with 2800 sq ft of development. Open to Below Design, Central Vacuum System, Air Conditioning, Kinetico Water Softener System, Upgraded Insulated Interior Walls, Home Theatre Room and Incredible Wet Bar & Lounge Area in Basement. Enjoy the built-in Speakers, Remote Lights, and other Upgrades noted on Feature Sheet Avail with Viewing. Exquisite Main Floor Kitchen with Granite Countertops and great Island with Eating Bar & Built-in Entertainment Ctr. Gorgeous Dining Room has a Coffered Ceiling and fits a large group. Upstairs the Master Bedroom is a Retreat from Everyday Life with a Wall Mount TV and an Incredible Ensuite. 2 other Bedrooms are large with Plenty of Closet space. The Bsmt is perfect for entertaining with a 10'Wet Bar & Incredible Theatre Room You Have to SEE! Outside you will enjoy the great 15'x15' no-maintenance Deck with Glass Panels, Hot Tub & Gazebo(Negotiable).

View all photos & impressive details here