Did you know that between 2002 and 2007, Canadian home prices soared 78% from $177,100 to $315,800.  If you are planning on flipping in this market, YOU WILL LOOK LIKE A HERO… But not so much anymore…  As the market is softening and correcting itself, flipping is one of the hardest, if not THE hardest way to make money in Real Estate.

There are so many factors that come into play here…  Right location, property, market you purchased in, renovations (and not over building for area).  Plus then you have to ask the right price and get it on the market at the right time, in order to get the maximum profit out of it…  To me… that’s too many variables in order to make money.  This is why I believe in purchase, hold, rent and sell in 5+ years.  You have cash flow, and potential equity growth.

I think that we are going to start to see the HGTV channels (and others like it) start to look at different shows than Flipping for Profit type shows, but rather we may start seeing shows that will target cheap reno’s and loving the home that you’re in, instead.  The market can’t handle mom and pop flippers, and it most likely will not be the ‘in’ thing too much longer…

Although the number of sales dropped over all, the number of condos sold actually increased by 5 units vs. last week.  The number of showings over the past week, we have noticed to slow down, and most showings are happening on the weekends, as the evenings get shorter.

Again, heading into Spring of 2009 we could expect more listings to come back on the market that have been or will be taken off, 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.

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

Much… Much… More to come…

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.

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…

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.

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

New homeowners have different options as of October 15 and the new rules put in place by the federal government. Under the new rules homeowners need 5% as a down payment. This can come in the form of their personal savings or a gift from a family member. The maximum amortization is 35 years from the 40 years previously. Most new home owners are looking at having a cosignor to help with the qualification.

Canadian mortgage rates are directly affected by the actions of the Bank of Canada. By monitoring the interest rate on bonds issued by the Bank, anyone can get an indication of interest rate directions. The bond market is essentially a reflection of investors’ interest rate expectation for the future of the Canadian economy.

Purchasers who do their homework know that bond rates have been declining. The decline in bond rates results in lower interest rates on mortgages in Canada. The Bank of Canada has backed away from increasing rates due to recent unrest in the market. However, there is speculation the Bank of Canada may slightly raise interest rates in the coming months, but time will tell.

For any of your mortgage needs please contact Michael Grabmuller at michael.grabmuller@td.com