Red Deer Real Estate Blog

It’s always a thrill to be able to help first time home owners find their first home.  It always takes me back to when De and I found our first home.  We really didn’t know what was happening or what we were doing, and really kind of shocked to know we COULD own a house.  That was 1996, in a market place that was more a buyers market than a sellers.  Interest rates back then were 7.75% and we thought that was great because the car loan we had was around 10%.

Today buyers have the luxury of selection and low, low, low interest rates.  With some rates at half of what they were when I started, the affordability factor is a driving factor for first time home owners today.

Becky and Ryan, are newly weds and just purchased their first home together.  Congratulations!

It was a real pleasure for De and I to assist you in finding your home.  Enjoy.

Your Friends in Real Estate,

Patrick and De Galesloot

Last week in real estate was a busy week. Sales increased, pending sales increased, and new listings slowed down just a bit. It ads up to a good week.

Overall sales numbers continue the April trend that saw us mirror the sales results of 2006. With interest rates continued to be fore-casted at record lows, and oil prices steadily climbing, the so called spring fling market blip is turning out to be a trend. A lot has to happen in order for us to be come a full fledged balanced market but the seeds are there, and the mood is right.

Your Friend in Real Estate,
Patrick Galesloot.

If you are getting a mortgage and putting less than 20% down on that home purchase you were required to get mortgage insurance.  This insurance is provided through two companies, one being CMHC.

Who is CMHC?

Canada Mortgage and Housing Corporation (CMHC) is Canada’s national housing agency. Established as a government-owned corporation in 1946 to address Canada’s post-war housing shortage, the agency has grown into a major national institution. CMHC is Canada’s premier provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs, and housing research.

On January 1, 1946, the Central Mortgage and Housing Corporation was created (changed to “Canada” Mortgage and Housing Corporation in 1979) to house returning war veterans and to lead the nation’s housing programs.

CMHC’s basic functions were to administer the National Housing Act and the Home Improvement Loans Guarantee Act, and provide discounting facilities for loan and mortgage companies. The capital of the Corporation was set at $25 million (a substantial amount for the times), and a reserve fund of $5 million authorized to be accumulated from profits. This requirement and capital structure are still in effect today.

National Housing Act

The purpose of the Act is to promote the construction of new houses, the repair and modernization of existing houses, and the improvement of housing and living conditions.

Canada Mortgage and Housing Corporation Act

The purpose of the Act is to incorporate the Canada Mortgage and Housing Corporation, Canada’s national housing agency, and provides the objects and powers of the Corporation

Premiums:

Should we be concerned about the sustainability of CMHC? 

Lately there has been increasing numbers of announcements of CMHC spending.  Some are grants some are loan guarantees to different sources other than home owners.  All those premiums paid by home owners being used to build affordable housing is great, but at what cost?  Are we at risk that CMHC will not have money to save the banks from a collapse of American proportions?

Here is a list of recent announcements:

Affordable Housing in Yukon Gets a $60-Million Boost
May 22, 2009
 
Affordable Housing in Northwest Territories Gets a $117-Million Boost
May 22, 2009
 
Affordable Housing in Nunavut Gets a $117-Million Boost

Affordable Housing in Newfoundland and Labrador Gets a $93 Million Boost
May 22, 2009
 
Affordable Housing in Prince Edward Island Gets a $13 Million Boost
May 22, 2009
 
Affordable Housing in Saskatchewan Gets a $161 Million Boost
 
Affordable Housing in Nova Scotia Gets a $128 Million Boost

Part of the federal government’s $1.9 billion commitment for housing and homelessness programs announced by the Government of Canada in September 2008, which extended the Affordable Housing Initiative and the renovation programs for low-income households for two years.

$1.9 Billion seem like a lot to you?  How much surplus does CMHC have or rather used to have?

The concern would be that if a large number of foreclosures occur similar to our friends in America, would CMHC be able to weather the storm after spending money of projects to help affordable housing and stimulate the economy?  Perhaps that is a debate on whether or not owning a home is a right or a privilege?

Perhaps the bigger question is:

Why do we have to pay premiums for Insurance when the program has this kind of a surplus?

OTTAWA, October 10, 2008 - Canada Mortgage and Housing Corporation (CMHC) will purchase up to $25 billion in insured mortgage pools as part of the Government of Canada’s plan, announced today, to maintain the availability of longer-term credit in Canada.

The latest financials on CMHC can be found in a PDF here.

Let me know your thoughts.

Your Friend in Real Estate,

Patrick Galesloot

on Twitter:  @pgalesloot

onFacebook

Days on Market is a measure of sales typically an average number.  A better measure may be the “median” rather than an “average”.  The average DOM for April sales was 44 days while the median DOM for April was 40 days.  An indicator that buyer’s are looking and buying at those listings that are “fresh” on the market.  On the Red Deer MLS® system we have our housing data sorted into categories.

• Active
• Conditional (also known as pending)
• Sold
• Expired
• and Canceled

What is not reflected in the “Average Days on Market:

• Whether or not the properties were previously listed and re listed for sale.
  • Properties that were on and then expired or they canceled the listing and were subsequently re listed for sale do not carry their previous data forward.  If you have been reading my previous weekly updates you are aware that I have been reporting expired and canceled listing numbers.  These sellers do not always change their mind when it comes to selling.  They may in fact re list with the same agent or a new company and agent.  A good REALTOR® will be able to reference data on the house you are considering buying.  We can, through our MLS® system, analyze the listing history for many homes.  This historical data may be helpful in determining the level of motivation for a seller.  Motivation for selling can influence the accepted selling price.  If my home has been on the market for 90 or 120 days, then listed again with new “spring” photos and now 4 weeks later you want to make an offer purchase, knowing how long I have been trying to sell for and any price history should assist a buyer in negotiating terms they favor.  Sellers have long been told that pricing to high and reducing price later can impact their net.
• Whether or not an offer was accepted and the financing fell through or other conditions that resulted in that property becoming active again.
  • The impact of accepting an offer that ultimately doesn’t complete can be similar to pricing to high.  The first question the next buyer asks is “why did the offer fall”?  To often the answer is because of financing and the buyer’s representative did little to confirm the buying ability of their client. 
• Canceled listings consist of listings that sellers changed their mind, re listed at a new price and reset their DOM to zero.
  • Their were 66 canceled listing in Red Deer during the month of April.  Most of those were canceled after 75 days on market.
• The current inventory and how long they have been on the market.  
  • The average DOM for active listings today is 50 days.  On average most listings are on the market longer than those that sell.  Should be no surprise their if the list to sell ratio has been below 50% for several months which it has.
• Conditional listings, these are the listings that recently accepted an offer.
  • The median DOM is a mere 24 days right now.  The most activity occurs in the first few weeks of a listing, the median DOM of 24 days is a strong indicator of that.  If you are selling take note.  If your REALTOR® does not know this take special note and probably some action.

The moral of the story is data is good.  The REALTOR® that has the data and the knowledge and uses it will be more successful at bringing buyers and sellers together.  It’s okay for you to ask for data, it’s okay for your REALTOR® to look up data, and it’s okay for him/her to ask for more details.

Your Friend in Real Estate,

Patrick Galesloot

Follow Century21 Advantage on Twitter:  @C21Advantage

Follow Patrick on Twitter:  @pgalesloot

One of the more frequently asked questions I and my peers receive is “How long has it been on the market?”, and another is “how long will it take to sell my home?”.  Both questions essentially centered around “days on market” (DOM).  Days on Market (DOM) is reported on sold properties, and not often calculated on active properties.  The days on market for active properties can be influenced by new listings coming on market so that number can be more fluid or a snap shot in time, while days on market for sold properties is on transaction that are for the most part complete.

Today the average DOM for Red Deer sold properties is 44 days on market.  That number includes the pending or conditional time which could be 1 week or 2 weeks depending on the conditions accepted.  The actual time frame until an offer is agreed upon is closer to one month.  You may be thinking “so what”, “what does this all mean?”.  It is a measure as to how well your listing is doing versus those that are actually selling.  If the average DOM is 44 and on average those homes received an offer around that 30 – 35 day mark, and your home is still for sale with no offers you have some decisions to make. 

Your home is on the market longer than the average you should:

• Review your price with your REALTOR®.  Who’s price is it?  Yours?, the REALTOR’s®, or the markets?
• Ask for an updated market evaluation (CMA).  Has the market changed and you are not aware?
• Ask how many similar priced homes have come on (competition)
• Ask how many similar homes have sold since you’ve listed
• Ask or verify how your home compares for showing condition
• Ask did we respond to the feedback that was given (to small).

Now is not the time to let your feelings of frustration and anger regarding your home not being sold.  You should put those feelings in check and objectively ask questions as to how you can improve or increase your opportunities for securing an offer.

The market has been improving as discussed in my earlier posts but it is still competitive.  Today their are 665 active properties for sale in Red Deer compared to 95 sales reported for the month of May.  Definitely far more not selling than selling today.  The average DOM for those sold properties was 44 days, compared to today’s average for the active listings of 48 days.  The days on market range for those active listings is 0 or new on market to 290 days.  Average days on market can be interpreted as what buyers are looking for.  That is to say, they are looking at “new” listings and choosing those that are newer on market and those that are on longer than the average are often carrying a stigma.

As you can see by the graphs the DOM varies by city and town, and it also varies by price range.  To ensure you are market competitive contact us today, Century 21 Advantage (403) 346-0021.

Your Friend in Real Estate,
Patrick Galesloot

Just in time for the long weekend, Stats.

As you can see, the market is looking up.  All in all there has been lots of activity.  Busy open houses, and lots of buyers taking advantage of the record low interest rates.  The spring like conditions are also bringing more would be sellers to market.  New listings increased by 31% form the week before, while sales increased 16%.

Pending deals however slowed down.  We’ll be keeping close eye on that.  Pending deals are how we measure new purchase contracts written.  If the change weekly is a decline in deals written that may pose a problem for sellers in the future, hopefully it is a sort term blip and we see a return this week.  Not the end of the world as there was a net decrease in inventory when looking at the big picture.

Long weekends tend to be quiet in real estate but always enjoyable despite the threat of snow.  If your not camping and thinking “I have extra time to be looking” we can help.  There is a sizable amount of inventory out there to navigate thru and the best way to filter out the homes that don’t meet your expectations is by speaking with your REALTOR®

Your Friend in Real Estate,

Patrick Galesloot

Moving from one house to another is always a challenge, but it doesn’t have to be a nightmare.  Here are some simple tips on how to get it done with minimal stress and strain.

• Look at all the alternatives: hiring a moving company, for example, versus renting a truck and doing it yourself. Whichever alternative makes most sense for you, get bids from more than one vendor.
• A few days before the moving company is scheduled to arrive or you’re supposed to pick up your rental truck, call to confirm that everything is on track to happen when it’s supposed to .
• Prepare your change of address cards in advance and send them out as soon as it’s appropriate to do so. The post office, utilities, companies and people you do business with, city hall, friends, relatives – all should be notified of your move.
• Get an early start on packing by concentrating on seldom-used items first. Each box should have its contents and the room those contents belong in written on it clearly.
• Take a hard look at things you seldom or never use and throw away as many of them as you can. The more you throw away, the less you’ll have to move. Every item you throw away is one less item to clutter up you new home.
• Use your extra towels and linens to protect breakables. When your supply of these things is exhausted, crumpled newspaper makes an excellent substitute. Write “Fragile” on all appropriate boxes.
• Put your valuables (such as jewelry) and important documents (birth certificates, car titles, etc.) aside in some safe place where they won’t be misplaced.
• When the house is empty, go back for a thorough final inspection. Check closets, crawl spaces, basement, attic, out-of-the-way nooks and crannies of all kinds. Have a second person make the same inspection separately.
• Clean your new home thoroughly before moving in. It’s infinitely easier that way.
• Decide in advance where you want the heavy furniture. Changing your mind after the movers have departed is no fun – especially for your back!
• Locate all fuses, circuit breakers, and water/gas and electrical valves. Record the meter readings and check the smoke detectors.
• List the phone numbers of the local police and fire stations, doctors, nearby hospitals, etc. Put a copy of your list near each phone.

Above all, plan, plan, plan and plan some more. Make a schedule you can live with, and then stick to it.  Preparation and forethought will help you to keep everything under control and finish the move with your sanity and your nervous system intact.

 Your Friend in Real Estate,

Patrick Galesloot

Welcome to May!  April is always a mixed bag when it comes to weather.  We had snow, followed by double digits and temps into low 20′s for a brief period, then frigid snow again.  We were up and out BBQing, then hunkered down while the chill was in the air.  Interest rates mean while remained low, and dropped slightly.  Happy home buyers can now lock in for under 4% with rates often below 3.9% for a 5 year mortgage term.  All of us old timers can`t believe how low the rates are and how affordable it is to borrow.  With the economy still in the dumps in many sectors the government looks like they will hold rates for the foreseeable future.  This is a great time to be refinancing or upgrading.  Many buyers today are able to upgrade to the home they want while keeping their payments relatively the same.  Looking at our monthly stats, buyers were buying with April 2009 being recorded as exceeding 2006 sales levels.

When we started April we had approx. 650 active listings in Red Deer.  We start May with 638 active listings according to my MLS® stats for May 1st and 2nd.  This could be a significant point for Red Deer real estate.  April sales increased to 178 MLS® sales from 123 in March an increase of 55 sales or 44%. 

April Vs. April? Was this a normal April?

As far as April being normal in the sales department it looks like we can answer that one as “YES”.  The other half of the story is listings, new listings vs. sales, and inventory levels.  As mentioned above we had a net decrease in inventory levels.   The sales to listing ratio is on the rise.  Sales are rising, listings are not being carried over for the backlog of inventory is starting to thin out and go down.  With the sales.new listing ratio jumping to 59% we are moving into “balanced” market territory from a strong buyers.  Yet another indicator to the fence sitters that were waiting for “the bottom” I think you may have missed it.  That’s the thing with wanting to buy at the bottom, you never know when you hit bottom until it passes.

Buyers still have the benefit of inventory to choose from and amazingly low interest rates.  If you’re ready to get off that fence and take advantage of market conditions give us a call.  (403) 346-0021.

Your Friend in Real Estate,

Patrick Galesloot

What a gorgeous day it was to be outside for our inaugural “Shredathon“.

The shredding event we dubbed “Shredathon” is a new concept in Red Deer and area for the most part.  The response was well received by those that attended.

The shredding was free courtesy of Merlin Shredding, and co sponsored by us, Cenutury 21 Advantage.  All that we asked was you bring your shredding to us, your old invoices, statements, tax returns, and other sensitive materials.  We accepted donations for the Red Deer Food Bank while we were their and we collected several bags of dry goods and $10 in cash.

It was a great day to be outside meeting everyone and talking to our new friends at Merlin Shredding.

Until next time, your friend in real estate,

Patrick Galesloot