CMHC 2008 Canadian Observer

CMHC came out with their 2008 Canadian Observer today…  In going through it, there were many interesting and informative graphs that I wanted to highlight and pass on to you.

Looking forward to hearing any comments or future predictions on the real estate market in Calgary or even in Canada…

Fraud Alert! What you need to know…

As I'm typing this post on mortgage fraud, I can't help but hear Oprah's voice in my head. No, she hasn't recently done any shows on mortgage fraud but the "what you need to know" starts off seemingly every show aired that plans on informing the general public of something you weren't previously aware of but most definitely should be. The second most famous line she uses is "all new..."

For this weeks all new post, I'll be enlightening you on what you need to know about mortgage fraud. Having recently sat in on a presentation from First Canadian Title, I'm confident that the majority of us brokers in attendance promptly went home and signed up for title insurance.

What is title insurance?

Title insurance covers you if someone fraudulently obtains a mortgage on your home. It also protects you from a myriad of other potential issues, such as errors in surveys, incomplete/out of date real property reports at the time of purchase, legal fees required to resolve title issues, problems if the previous owner completed renovations without a permit, etc.

An example that was shared with us was of someone who had moved into a property whereby the garage extended by several feet onto the city-owned back lane. My details are likely to be somewhat limited here as this is from memory but the gist of it is this: the property was in this condition when it was bought. A City of Calgary encroachment agreement was obtained from the City of Calgary at a cost of $500, basically stating that the garage is, indeed on city owned property by a margin of several feet. When they wanted to develop the back lane, the garage needed to be moved. However, if it was moved the other way it was then situated too close to the home and deemed a fire hazard.

Luckily the owner of the property had title insurance so they stepped in and valued the home's worth with/without the garage, found the garage to be worth an estimated 15K and reimbursed the homeowner in that amount. The $500 City of Calgary easement essentially served no purpose and for that cost (and technically much less) the owner could have bought title insurance as a one-time fee, for the duration of time that they live in the home.

See the below link for an eye-opening, first hand account of a BC elderly man who was the unfortunate victim of mortgage fraud. His home, valued at 600K had a fraudulent mortgage of 400K taken out on it and this story is currently being fought out in court.

http://www.househunting.ca/buying-homes/story.html?id=9664ef04-9afd-4561-83de-fdaabf6a907f

Also:

http://www.protectyourtitle.com/reallifefraudstories.htm

How much does it cost?

Compared to the majority of insurance premiums, it is relatively inexpensive as it is a one time cost for the duration that you live in that home.

If your home is under 500K, the cost is $299 (with a mortgage; $200 without an existing mortgage)
For homes valued over 500K, add an additional $1/per $1000 over the 500K.

Identity Theft

Might as well cover yourself from identity theft while you're at it. For lifetime coverage it will cost you $40. This way, no one can ever impersonate you and take out a mortgage in your name.

Contact me at leah@mortgagegrp.com or 403.630.9534 for more information on how to sign up.

Habitat for Humanity

New Look Coming To The Calgary Real Estate Blog

I wanted to give you a heads up that we will be looking at a new change in the coming weeks here at The Calgary Real Estate Blog.com  Below is just a sneak peak of what you will see coming your way…

Much… Much… More to come…

Weekly Market Update – Week 47

We will be starting a new weekly post that will give you an update on what has happened in the Calgary market over the last week…

Please leave any comments you have about the Calgary market, and thanks for reading.

WEEK 47

We have noticed over the last week that this market has picked up in number of showings, the number of sales and the active number of listings on the market has decreased, and we are now under 8000 listings in Calgary.  This is good, but there are still many bargain hunters out there as we mentioned last week.

We are not expecting prices to see instant growth, and turn around over the next couple months, but rather reach new bottoms, and most likely bounce around the $390,000 median price.  We hit the $390,000 median price back at the beginning of October and have been around this number since then.  It is hard to say what the Christmas season will bring, but most likely we will see the number of listings decrease, due to sellers not wanting to sell over Christmas, and their listings expiring.  The number of sales could drop off a bit as we get closer to the arrival of Santa.

Heading into 2009 we could expect more listings to come back on the market, with more buyers coming out of the woodwork.  Will this change the average and median prices?  Probably not, because there are many sellers who are waiting until the spring to put their property back on the market.  If you are considering this, your home may have more showings and potentially get offers, but the price most likely will not be increasing.  Why?  There could be more listings, but there could be more buyers as well, and the supply will stay high, and in the big scheme of things, the demand still lower.

Backtracking on the Royalties

So it appears that the Alberta Government is going to relax the royalties and taxes on the oil industry…  This is a good thing, and hopefully will help the economy and the industry be more competitive in this market place…

Premier Ed Stelmach announced a new five-year plan that lets producers pay less than the rates set in next year’s revamped royalty regime, a move that affects thousands of conventional oil and gas wells.

In making the surprise announcement, the premier said this change is needed to shake off the effects of a slowdown in Alberta drilling and the global economic crisis.

He argued extra tinkering to the province’s royalty framework — announced with much fanfare in October 2007 — will help spur drilling of new wells between 1,000 and 3,500 metres deep.

“The world has changed in recent months and we must respond. We must be competitive, so we’re making this change to encourage new activity in the oilpatch,” Stelmach said.

“This is all about accessing risk capital and ensuring that the jobs are maintained here in the province of Alberta.”

Click on the Article Photo to read more…

Habitat for Humanity

Are you one of those people who are savvy with their flea-market finds? Love a good bargain? Did you know that there is a Habitat for Humanity store right here in Calgary where you can spend an afternoon looking through new and used furniture, appliances and building products? This is a great place for someone like myself, who devours HGTV and dreams of spray painting 1950's ornate silver chandelier with a color called "pearly pebble" and declaring it brand new. Generally those of us who have envisioned what our homes might look like if we were to declare our own personal 'home heist' a la Justin and Colin style, it would be an impressive feat. Sadly time, energy and plain skill are often lacking and we resort to maintaining the status quo.

There are places in Calgary such as the one listed above that won't break your wallet but will help you indulge your inner design diva. Another store recommended to me but which I have not as yet visited is the Consignment Gallery, located at 533 - 58th Ave SE. The information I received is that this is a great place to shop for pieces that were previously used to decorate show homes and we all know how gorgeous those homes are decorated. Their stock is thus constantly changing so it is certainly worth popping in from time to time.

Lastly, Fine Furniture Outlet off of Edmonton Trail is great for quality furniture (think kitchen tables, bedroom sets and sofas). When I was last there over a year ago they had scads of thick catalogs from various furniture stores in Calgary and should you be after a particular piece, they may be able to order one for you at a discounted price. Worth looking into.

I should mention that I have a personal soft-spot for Habitat for Humanity as in the upcoming week I'll personally spend a day volunteering with a group of mortgage broker's and lender's that I work with on a home in Evanston, in northwest Calgary. I'll be sure to post a few pictures alongside a story about that experience in a future post.

October 2008 Market Review

Calgary has been through quite the ride over the last couple weeks.  I’m sure that most of Canada has felt something with the financial crisis that we have all seen and gone through.

As I write this, we are in a better place than we were at the end of October.  But it is somewhat to be expected as invetory usually drops off this time of year.  End of October we were sitting around 8500 listings and right now we are just over 8000.  This is good, except that we still have 7.8 months worth of invetory on the market with the number of sales that are happening.  In a truly balanced market, we should see this number of months be around 2-4.

Advice to Sellers:

Right now, you are wanting to really stay on top of the pricing of your home.  We have bargain hunters out there, with low bids that are driving the prices down.  If you are in a true need to sell your home, you will have to most likely cut your price further, as this is what buyers are looking for right now.  As in the past, when it was the sellers day to shine, and prices were rising, and it felt you could ask almost anything for you home, it’s reversed.  Will it stay this way forever, and prices go back down to year 2000 prices… probably not.  We still have a strong economy.  Across Canada, prices have dropped about 14% and Alberta had the least amount of price reductions at 7%.  We are still THE province in Canada.  But make sure you take a serious look at what it is your selling, and what your asking for it…

Advice to Buyers

BUY… BUY… BUY…  Right now, more than ever, is a great time to purchase a new home or investment property.  Especially with Christmas coming up and the number of motivated sellers rising daily.  We have seen some incredible price drops, and buyers that we work with get some great deals.  These days will pass, and it will go back to a balanced or a sellers market, so you don’t want to miss your chance to get into the new home that you are waiting for…

Here is a link to the last CREB (Calgary Real Estate Board) report put out for October 2008

Below are some graphs about the Calgary Real Estate Market over the last year… Hope you find them helpful.

You can click on the images to enlarge them in a new browser window.

The Truth Behind The US Mortgage Crash…

Here is a great clip that explains what happened in the Mortgage melt down in the US.  Remember, this isn’t like the Canadian banking systems.  Right now in Alberta there are only apx. 1200-1300 mortgages out of 500,000 + that were just starting the foreclosure process, and not even there yet. That’s only .24% of mortgages in Alberta.

We’re Back…

We took a little time off from the blog… but it wasn’t by our choice… I wish we were somewhere sunny, but rather, in updating the blog, I was locked out and had to get a professional developer to unlock it for me… Anywho… We’re Back!

Thank you for your posts and thoughts on what we post here.  Looking forward to many more posts and discussions!

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