Oct
10
Wall Street’s Melt Down Explained
Filed Under Foreclosures, Special Reports, US Economy, US Housing Market, World Economy, World News | Leave a Comment
I have to say that this is a good behind the look at what has happened in the US and the financial markets. The one thing they are missing is a ‘big thing’.
CONSUMERS…
The main reason this whole collapse has happened, as consumers / investors are always chasing the dollar and chasing the ROI (Return on Investment) that companies create risky products to keep shareholders happy, keep investors investing and their companies strong. This is a very simplified version of the reality, but it’s true.
What are your thoughts? How did this collapse happen?
Jul
16
Wanting to Buy a Tropical Home?
Filed Under Buying, Recreational Properties, Special Reports | 1 Comment
If you are looking at purchasing a home south of the boarder, there are 6 things that you should really look at and seriously consider before purchasing. There is a link to a document from REIN at the end of this article that outlines everything that you need to know about purchasing down south!
Rule One
Go There Twice, not just once… Don’t sign the dotted line until you fly!
You will want to view the home and area in different seasons. Don’t just take a local’s word for it, do your due diligence.
Rule Two
Always check out the Competition on Both Fronts
It is important to look at the competition not only locally, but also in other countries. Get to know the area and what is being offered. Don’t just buy the first property that you come accross because it looks like a great deal!
The other competition is to look at the competition that your potential renters will be looking at. If you are not planning on living there full time, you will most likely want to have some revenue on the property.
Rule Three
Know the Local Property Laws
This is very critical… if you don’t know the local laws, you are truly playing with fire… You will want to find out what restrictions there are to foreign owners.. as there may be many!
Rule Four
Have Your Own Legal Rep in the Country
This individual must have nothing to do with the development or property that you are purchasing, and should review absolutely everything before you sign it… Do it right the first time, or it could cost you!
Rule Five
Dig into the Tax Implications - How will Profits be Treated?
How will the taxes be handled with owning outside of Canada? Is there a tax treaty between the coutnries?
Rule Six
Know Exactly What You Are Buying
Do you know what you are truly buying? Is it a true real estate investment, or is it an investment into a company? Can you hold the title in a company name or personal name as a Canadian citizen?
Make sure you do all the due diligence that you can, as you don’t want to have to potentially pay for the property twice, cause you didn’t do your homework…
You can download the 6 Rules To Tropical Real Estate here which originated from REIN.
REIN - Real Estate Investment Network www.albertarein.com
Feb
27
Canadian real estate markets remain “remarkably buoyant”, especially in light of the deepening housing downturn in the United States and the generally softening conditions in most other advanced economies globally, says a national report released Tuesday.
The report, authored by Adrienne Warren, senior economist at Scotiabank, said from a housing demand standpoint, “economic conditions still favour Western Canada, with its booming resource-based industries and extremely tight labour markets.”
“The odds of significant overbuilding, or of the price declines that are now occurring in the United States, are still relatively low. Inventories of unsold homes, including condominiums, in Canada’s major centres are well contained, particularly when compared with the housing-market upswing of the late 1980s.
The current housing boom in Canada is the strongest and longest of the post-war era, she said. Between 1998 and 2007, average inflation-adjusted home prices have soared some 65 per cent, easily besting the 32-to-56 per cent appreciation of the prior three housing cycles of the 1960s, 1970s and 1980s.
“The current housing upswing is going on 10 years, whereas the prior three cycles ranged from five to six years,” said Warren. “It has also outlasted the housing booms experienced in many other advanced economies this decade.”
Mario Toneguzzi, Canwest News Service
To Read Full Article Click Here
Feb
6
Alberta’s Been on a Wild Ride…
Filed Under Oil Sands, Real Estate General, Special Reports | 1 Comment
If you haven’t noticed, Alberta’s real estate market and job market has been lately on a wild ride. Todd Hirsch, senior economist for ATB Financial was quoted in The Calgary Sun saying
“there are no ‘dire signals’ Alberta’s economy is in danger of running out of gas, or crashing. The speed of growth might be slower, but the signs point to more sustainable growth in 2008. It’s been a wild ride for the past few years, but a chance to take a breath - and catch up with runaway growth - should not necessarily be considered a bad thing”
He also compared “the ride we’ve been enjoying to a high speed cruise down the autobahn. When you have become accustomed to moving at 130 km/h, a deceleration to 80 km/h is very noticeable”
“Canadian energy giants such as EnCana, PetroCan and Husky plan to expand their oilsands operations and big international oil companies are manoeuvring to increase their stake. That’s not surprising when you consider the area is believed to contain some 175-billion barrels of oil, second only to Saudi Arabia’s reserves”
It appears that the Alberta market isn’t going to crash, but is rather taking a well deserved breath. The growth and increase can’t continue on like it has… that’s unsustainable. Just last week, Suncor sets to expand another $21 Billion just a day after it said that it would pay higher royalties to the Alberta government. I think we might still have a ways to go…
Jared Chamberlain
jared@tcgroup.ca
www.ChamberlainGroup.ca
Feb
5
Canadian Residential Real Estate Future is Solid
Filed Under Real Estate General, Special Reports | Leave a Comment
This was a news release from The Canadian Real Estate Association (CREA) on January 23, 2008. Here are some excerpts from the news article.
“Three key economic ingredients will keep Canada’s housing market on a different track from the United States. One is consumer confidence, the second is employment, and third is affordable interest rates. The Bank of Canada cut interest rates on January 22nd because of weaker prospects for Canadian economic growth in 2008. “Those lower interest rates will also help temper the erosion in housing affordability due to additional home price increases,” Bosley added. The Bank of Canada is expected to cut its trend-setting rate again in March.
CREA’s Chief Economist Gregory Klump says that the Canadian housing market in 2008 will pull back from the breakneck pace set in 2007, but this is still forecast to be the second-busiest year on record in almost all provinces, with residential unit sales reaching an estimated 512,705 units.”
I would love to hear your comments on what you think the Real Estate market in Canada will go???
Regards,
Jared Chamberlain
jared@tcgroup.ca
www.ChamberlainGroup.ca
Jan
22
Buying A New Condo? Watch This!
Filed Under Buying, Special Reports | Leave a Comment
Great towers of glass and steel are going up in every big city in this country, and in many of the smaller ones too. If you’re looking to buy your first home, or if you’re looking to downsize, chances are good you’re looking at condos.
You may be surprised to learn that the beautiful rooms you see in the model suites are not necessarily like the ones you’ll live in once your building is complete. The den on your floor plans may become a walk-in closet by the time you move in. Your ceilings may turn out to be a foot or two lower than the ones you saw in the model suite when you decided to buy.
As Wendy Mesley reports, buying a condo is fraught with risk for you, the buyer. The developers? They’re pretty well protected and this is why it’s good to have a second set of eyes with you, when you view show suites.
If you are looking at purchasing a new condo in Calgary, or elsewhere for that matter, please give us a call, and we can help you out!
Till next time,
Jared and Rebecca Chamberlain
Jared@tcgroup.ca
Jan
15
Is It A Bubble? Or Is It About To Burst?
Filed Under Real Estate General, Special Reports | 3 Comments
This is a great article from Macleans.ca, written by Jason Kirby in Dec. 2007, that talks about what is happening in the Alberta and Canadian Real Estate Marketplace… it’s a good read! It takes into perspective of what is truly happening, takes out thy hype, and looks at the fundamentals!
Enjoy!
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First-time buyers are wondering whether they’ll ever be able to afford their own place. Some wonder if they should buy now, or wait in hopes that prices will fall. Those who’ve already bought worry that they’ve paid too much — and will wind up overextended if interest rates jump — or that they’ll never be able to move up to something bigger. Even house-rich Canadians whose equity has soared in the frenzy fret that they can’t take advantage of their position — where could they afford to buy if they sold now? And what if you’re counting on your house to finance your retirement, and its value plummets? At the same time many fear the carnage in the U.S. housing market will make a collapse here inevitable. So with one eye on soaring prices here, and the other on the troubles south of the border, you can’t really blame Canadians for feeling like they’re living on the edge of a cliff.
Yet step back from the real estate listings for a moment and things start to take on a different hue. Yes, prices in Canada have risen dramatically in the last few years, but those gains are nothing compared to what’s been experienced in other countries, or even here, in years gone by. What’s more, thanks to continued low interest rates and new types of longer-term mortgages, housing affordability in some big cities remains decent compared to what we’ve seen in past booms. In fact, the evidence suggests that in Canada, if anything, we’re not at the top of the market and there’s still room for house prices to move higher in certain parts of the country.
There’s no question the housing market has been on a wild ride. The average Canadian family has seen the value of their home jump more than 10 per cent a year for three years in a row. Prices overall are up 60 per cent in the last five years. But national averages never tell the full story. While prices in cities like Ottawa and Montreal have grown slowly, house prices in Toronto are up about 86 per cent over the last decade to an average of $394,000, while the average home in Vancouver, at $570,000, has jumped 73 per cent since 2003 alone. In Oilberta, the average Calgary home has doubled in just four years to $432,000.
To buy at those prices, Canadians have had to pile on mounds of new debt. Between 2000 and 2006 the total amount of outstanding residential mortgages ballooned by 62 per cent to $694 billion, according to the Canada Mortgage and Housing Corporation, and many expect that figure will top $800 billion this year. It used to be said you couldn’t talk to a Vancouverite for more than five minutes before the topic of real estate came up. Now that applies to just about everybody.
But as Canada booms, America’s housing pain hangs over the party like a dark cloud. Across the U.S., house prices declined between the second and third quarters for the first time in 13 years. In specific markets in Michigan, Ohio, Florida and California, home prices fell as much as five per cent. There are some who predict — or is it pray? — the drop is just a brief pause before bidding wars erupt once again. But they are increasingly in the minority. Moody’s, the debt rating agency, predicts U.S. prices will fall by 15 per cent over the next two years as the market softens. Once-hot urban centres in California and Florida could even tank by more than 30 per cent. “In the United States, they basically went from double-digit price growth to an outright price correction in about six months,” says Craig Alexander, deputy chief economist at TD Bank. “That’s a classic bubble bursting.”
What’s driven things in the U.S. was a parlous mix of overheated financial markets, a culture of debt accumulation, and a heaping dose of pure speculation. The problems began a few years ago when Americans with poor credit and no cash for down payments were lured into the housing market by lenders offering subprime mortgages. Lenders had many tactics, but the most popular involved offering adjustable-rate mortgages with absurdly low initial payments. Many buyers jumped in, only to run into trouble once rates were cranked up. Borrowers eventually began to default on their mortgages. As many as two million Americans may lose their homes and pull the rug from beneath the housing market. As Mark Zandi, an economist at Moody’s, said recently: “This is the most severe housing recession since the post-World War II period.”
No one would dare claim the U.S. meltdown doesn’t pose at least some threat to the Canadian economy and, hence, house prices here. Our two economies are closely linked. If America falls into a deep recession, it could bring global economic growth to a standstill. But that’s by no means inevitable. Emerging markets are still strong, and that’s driven commodity prices. With its bounty of minerals and resources, Canada has seen record low unemployment. Even in Ontario, where manufacturing has been hard hit by the high loonie, the province has added jobs over the last year. The situation bodes well for continued strength in the housing market, assuming employment remains strong.
But the biggest difference behind the situation in Canada and the U.S. has to do with fundamental differences in the two markets. At the peak of the U.S. housing market, sketchy subprime loans accounted for more than 30 per cent of all American mortgages from 2004 to 2006. In Canada, they never made up more than five per cent of the mortgage business. That’s largely due to the buttoned-down style of Canadian financial firms and borrowers. But it’s also because Canada’s big banks control so much of the lending market. Absent the aggressive competition America’s financial services sector is famous for, there just never was the urge up here to pursue the riskiest slices of the market.
Instead, the main driver of our boom has been this country’s firmer economic fundamentals, say analysts. There are speculators in the market — there always are. But a tight labour market has led to rising incomes, allowing people who never thought of owning a home to claim a plot of land for their very own. “I can understand the concerns people have about the Canadian housing market,” says Alexander. “But I think what’s driven things here is fundamentally different so the risks are far less.” Adds real estate analyst Frank Clayton: “There is no bubble.”
Click Here to read the whole article!
Would love to hear your thoughts on this market place, as well as this article!
Regards,
Jared Chamberlain
www.ChamberlainGroup.ca
Jan
11
RBC Economics Provincial Review - January 2008
Filed Under Real Estate General, Special Reports | Leave a Comment
Below is an excerpt from the following document released today from RBC Economics regarding the Alberta Provincial review…
Alberta — High oil prices help offset downsides to growth
Coming off a strong run this cycle, several trends in Alberta are now on a decelerating path as housing markets, consumer spending, fiscal surpluses and capital spending remain at elevated levels but have, nonetheless, come off their growth peaks. Higher royalties have had exactly the expected effect, with reduced, but still high, levels of capital spending and hiring plans to help cool off runaway cost escalation. Scaled-back capital spending plans at still enormous volumes are a problem that most other provinces wish they had. High oil prices, however, should help to cushion the impact, such that Alberta’s growth will stay well above the Canadian average even though it is past its peak.
The easy money in housing markets is now gone. Stressed affordability conditions have priced many prospective homeowners out of the market. The pace of house price gains is rapidly cooling, and the ratio of sales to new listings is pointing toward retreating markets. Consumer spending has been well supported by strong wage growth. The key supports for a strong spending profile remain intact, but growth in spending should slow as income gains moderate amidst an overall slower economic expansion profile. Fiscal surpluses surprised to the upside this year, largely due to higher income tax and oil prices. However, natural gas accounts for roughly 50% of resource revenue, and natural gas prices and royalties are well below late 2005 peaks. Weaker prices and cost escalations have driven sharply slower drilling activity.
Jared & Rebecca Chamberlain
www.ChamberlainGroup.ca
Jan
11
The Sky Isn’t Falling… Prices in Calgary Come Back To Earth
Filed Under Real Estate General, Special Reports | Leave a Comment
The sky isn’t about to fall on Calgary home owners, although what used to be the country’s hottest housing market is poised for an uncharacteristically average year in 2008.
The price of a detached bungalow in Calgary rose 5.2 per cent in the fourth quarter of 2007 from the same quarter the year before. That compared with double-digit gains in the previous eight quarters, according to data released yesterday by Royal LePage Real Estate Services.
“People deal in relatives, and when the relative rate of price appreciation over the course of two years moves from 50 per cent to 5 per cent it feels like the market’s in decline,” said Phil Soper, chief executive officer of Royal LePage.
Calgary’s slowdown bucked the trend in much of the rest of Canada, where house prices blasted at warp speed through what is usually a holiday breather.
The national average price of a detached bungalow increased by 11.6 per cent to $337,555 from $302,497 the year before. The price of an average two-storey property rose 11.3 per cent to $399,738, and a condo unit 11.7 per cent to $240,395.
More modest gains all around should be the norm in 2008, Mr. Soper said.
However the slowdown is being felt sharply by some sellers in Calgary, where for two years price increases have blown the doors off the national average.
“People have gotten so used to their house appreciating 2 per cent every darned month, it’s taking a while for reality to set in. There’s still lots of money, there’s still lots of confidence, but there are also a lot of people out there who think they’ve got more house than they do.”
If you are wondering what your home is valued at, with the price of homes changing, give us a call or send an email!
Jared & Rebecca Chamberlain
www.ChamberlainRealty.ca
Source of Article: Report on Business.com
Jan
3
December 2007 Market Review
Filed Under Monthly Stats, Special Reports | Leave a Comment
Year end sales for residential and condominium held steady in 2007, showing very slight decreases in both categories, according to figures released by the Calgary Real Estate Board (CREB®).
Year-to-date Calgary single family metro sales as of December 31, 2007 were 18,438, a decrease of 3.53 per cent from the year-end 2006 sales figure of 19,113. Single family Calgary metro sales for December 2007 were 846, a decrease of 28.91 per cent from the 1,190 sales recorded in December 2006. Single family Calgary metro new listings added for the month of December totaled, 984, a 1.55 per cent increase over the 969 new listings added in December 2006. New listings coming to the market year-to-date were 31,722, an increase of 17.44 over the 27,011 new listings brought to market in 2006.
The median price of a single family Calgary metro home in December 2007 was $406,788 showing a 10.54 per cent increase over December 2006, when the median price was $368,000. The year-to-date median price was $421,000, an increase of 16.62 per cent from the 2006 year-to-date median price of $361,000.
“As we can see from the final numbers in 2007, sales have definitely held steady. In my opinion this can only point to two things; consumer confidence and stability in the market place. Calgarians continue to have confidence in our economy and real estate market”, remarked CREB® President, Ron Stanners. “The spring of 2007 was an unpredictable market, with multiple offers and relatively low inventory. As we moved into the summer months we saw a slow down in the sales activity and an increase in the amount of inventory on the market. This was a correction in the market, which was inevitable.” concluded, Stanners.
As we move into 2008, it will be very interesting to see where the market will go. As I stated in a post yesterday with the number of listings that went off over the last month, and what could happen this spring, could make our market flooded with properties again.
Jared Chamberlain
Source: Calgary Real Estate Board Stats December 2007
The Chamberlain Group
