THE BLOG

22
Jun

Are Foreign Buyers Moving to Calgary?

Foreign Buyers Have no Interest in the Calgary Real Estate Market

Interest Rates are rising.

The Toronto real estate market is ‘imploding’.

RBC is cutting 450 jobs.

Foreign investors ignoring Calgary, Edmonton & Montreal Real Estate Markets.

What does all of this have in common?

These are headlines from various articles from around the web. The two most important though are the rising interest rates and the foreign investors ignoring us.

First, rising interest rates.

The Bank of Canada looks 18-24 months in advance at various aspects of the Canadian economy and makes projections or estimations based on the data that they collect.

The fact that they are looking to raise interest rates is actually good. It means they feel that our economy can handle a small rise in the overnight lending rates.

As a caveat to that, if oil prices continue to soften, we likely won’t see or hear anymore ‘hawkish’ talk coming from Poloz, the BoC governor.

Now, don’t panic.

Rates in Canada have a tendency to rise by .25% or 25 basis points. This means that the overnight lending rate at the BoC would come to .75%.

To give you some context, 10 years ago the best 5 year fixed rate was 5.7%. The BoC overnight lending rate was 4.25% in June of 2007. Over the course of 2008, the overnight lending rate dropped to 1.5%.

Why?

Because their analysts could see what was coming over the next couple of years. They knew that the economy was going to need stimulating.

For rates to get back to those numbers we would have to see consecutive increases by .25% for the next 15 quarters.

That’s 5 years.

My Advice?

If you don’t like the rollercoaster ride and are on a variable interest rate, maybe have a talk with your mortgage broker about locking in over the next few years.

No Foreign Buyers: Who cares

A recent article in the Globe and Mail suggested that the Asian buyer (that was accused of driving prices up in Vancouver and Toronto…not true, btw.) is not interested in our market.

The governments of BC and Ontario were looking for a scapegoat to blame for the falling inventory (lack of supply) and the increased demand for housing in their two major centres in Vancouver and Toronto.

According to TREB and Teranet, approximately 2% of all MLS sales were attributed to foreign buyers in the Toronto market in 2016.

This is a market that saw 113,000 sales last year. This would be a total of 2260 sales.

That number doesn’t even come close to shorting the supply to a level that we could attribute a mass amount of blame onto one segment of the buying market.

If we had those same stats, our supply wouldn’t drop. Our demand wouldn’t be increased, therefore, our prices would not rise by 30% year over year.

No foreign buyers? Who cares.

12
May

Is the City of Calgary Getting it Right with the Green Line?

Calgary’s Green Line: Does the City Have the Right Plan?

A few days ago the City of Calgary told us that the alignment they are proposing for the green line will go from Crescent Heights down to Shepard.

This is a dramatic reduction in scope from the most recent alignment which essentially ran right from the north end of the city down through to the South Calgary Health campus in Seton.

The new alignment will most greatly benefit inner city Calgary, with communities such as Crescent Heights & Inglewood being the clear winners.

Who Loses in this New Plan?

The losers, unfortunately are the families that live in the suburbs at either end of town.  

They are being short changed due to planning decisions that have increased the cost and scope of the project to the point that the same proposed budget of $4.5B is chewed up with only 14 stations instead of 28, with the biggest contributor to this no doubt being the $1.95B tunnel to go under the bow river.

This allows the new line to only reach one station on the other side, Crescent heights, which isn’t exactly far from the downtown core to begin with.  

Now, $1.95B would make sense to me if they were spending it to connect to a major piece of infrastructure, like a hospital, university or the location of a new arena, but this alignment does none of that.

What Would be a Good Alternative?

An alternative here would have been for the City to pick one end of town, north or south, and take the line all the way, to allow inner city and suburban demographics alike to share in this enormous project.

An even better option is to stick with the first plan and go all the way with both and spend more money on it.  I can think of few public initiatives more deserving of capital than rail transit.

Instead, we have an alignment that caters to the inner city of both yet leaves the suburbs in no man’s land, with neither of the districts to the far north or south getting an LRT.

Let’s hope we see a few more kicks at the can with this before shovels hit the ground.

24
Apr

The Guaranteed Sale Tactic

What is the Proctor Guaranteed Sale Program?

The Real Estate Council of Alberta recently published an article on what the guaranteed sale program is and whether consumers should be wary.

Their position is that ‘wary might not be the best word’.

Here is some history on this sales tactic:

The Guaranteed Sale Program was first developed by Canadian real estate agent and now real estate coach, Craig Proctor. See the video from Proctor about his program.

It was developed, not to help the consumer get away from carrying two mortgages if they buy before they sell, but to pad the pocket of the agent offering his sales tactic.

Not sure what I mean? Here are some details from the video below that we have posted below regarding the program:

  • The purchase price of the home will be 5% below market value
  • Commissions and all other costs associated with the sale will come off of the net value (In Calgary, that is a lot more than just 5%, it’s closer to 9%)
  • You have to buy your next home through the listing agent and it has to be one of their listings
  • According to the program it will only work for a sale price below the area’s average (In Calgary that would be about $500,000 and below)

Towards the end of the video he lists the benefits to the real estate agent, one of which being ‘double ending a ton of your own listings’.

This means the agent would be representing both the buyer and the seller in the same transaction.

After looking at this program, the only person that stands to benefit seems to be the real estate agent. This is a sales tactic designed to get you, the real estate consumer, to pick up the phone and call that sales person to inquire about the program and about selling your home.

Other Advice From RECA

Now RECA does mention to read the details of the program and to make sure that you understand those details before you sign any listing agreement.

They’ve informed you that a real estate brokerage has to be the one to offer the tactic and not the real estate agent.

They’ve also informed you that the brokerage wants to minimize their risks associated with buying your home.

Advice From us at Redline Real Estate

Definitely read the details of this style of agreement and the fine print, do not miss anything as it pertains to the sale of your home.

If you can afford to sell your property for up to 10% less than what you have it listed for, then go ahead and follow through with that style of program.

In a market that sees most homes sell for between 2-3% off of the asking price, as advisors we would not be doing our job if we didn’t tell you how bad of a deal that would be for you financially.

Check out this article to learn more on this tactic.

Here’s the Proctor Guaranteed Sales Tactic Video I Mention Above

*happily edited from the original version so as to be in compliance with our regulator the Real Estate Council of Alberta

11
Apr

Calgary Market Stats for March 2017

What Happened in the Calgary Real Estate Market in March?

Some really positive news in the market for March in Calgary.

Here are some of the highlights but make sure you watch the video below to get in 2 minutes or less!

  • Sales were up 20% from this same time in 2016
  • Sales in March were up 42% month over month and a big improvement from February’s numbers
  • Inventory jumped 13.5% from February
  • Inventory levels were down 16% from March of 2016 keeping in line with a balanced market

Calgary’s Detached Housing Market

If you have a single family detached home, we have some very good news for you:

  • Overall months of supply is 1.97
  • All price points for detached homes are seeing improvements in sales numbers as well as slight improvements in prices
  • The entry to luxury and early luxury markets of $800,000 – $1.25M saw 50% of its total sales in March alone
  • The West side of the city is seeing the highest appreciation so far this year with an increase in prices of 2.5%

The Hottest ‘Hoods in the City

Here are the hottest neighbourhoods in the city, do you live in one of them??

  • Cougar Ridge and West Springs in the $500,000 – $600,000 market
  • Chinatown had a whopping 200% of its new listings sell in March
  • Upper Mount Royal had 167% of its new listings sell, and over half of the its sales for the year in March
  • Eagle Ridge saw 200% of its new listings sell in March, and 100% of the total sales for the year
  • Two communities are seeing extremely low inventory right now, with 0.3 months of supply for Riverbend & Southview.

Want more information on the Calgary real estate market? Watch the video below

 

 

27
Mar

Coming Soon!

Stay tuned.