Edmonton Real Estate Blog

“Less is only more where more is no good.”

Every so often, someone comes along who just makes you question every purchasing decision you’ve ever made. Like Miami-based designer Marianne Cusato, whose home design philosophy embodies living better with less.

Working with a team of designers, Cusato created the Katrina Cottages: attractive, affordable homes between 300 and 500 square feet. That’s not a typo. I don’t know how big your place is, but my kitchen and eating area is around 300 square feet, and I still trip over my dogs.

Her team’s task was to design an alternative to the FEMA trailers that housed those left homeless after hurricane Katrina. The Katrina Cottages are well-designed and apple-pie cute to boot. They won the Smithsonian Institution’s National People’s Design Award in 2006.

Of course, Cusato’s not the first build-better-not-bigger disciple. Sarah Susanka, author of The Not So Big House, also reveres architectural quality over quantity.

But regardless of whether your home is big or small, its design — far more than its size — determines how well you live. Bigger isn’t always better — though it can be.

Here are some ways Cusato says we can work around common design flaws in newer homes that may negatively affect how we enjoy our spaces.

– Mistake: Dominant garages. As people began to rely more on cars for daily living, garages started taking over the front of the house. Next, people retreated further inside their homes and became less connected with their neighbours and communities.

– Fix: Enhance your street connection. Consider how your home meets the street. It should pull you in. Punch up your home’s curb appeal. Focus on the front door and your porch if you have one. Make the path to your door say, “Welcome.”

– Mistake: Focus on size. To max out square footage, many builders have opted for bigger houses at the expense of high end finishes.

– Fix: Upgrade door handles and knobs that feel flimsy for ones that look and feel solid. Similarly, trade hollow core doors for solid ones.

– Mistake: Tacky add-ons. Among Cusato’s many peeves are tacked on architectural details that are just for looks. Specifically, she’d like to abolish fake shutters and three-foot porches.

– Fix: Use it or lose it. “A home should have nothing gratuitous,” says Cusato. “Either the shutters work or they go.” Even her 300-square-foot cottage has an eight-foot-deep front porch (not included in the square footage). “Keep it authentic.” Now think about that while I go take the fake shutters off my garage.

Marni Jameson, Calgary Herald

Average price up 19% nationally in December, but just 2.65% locally

Sales and prices of existing homes in Canada soared in December, capping a whirlwind 2009 that began weakly and then went on to set record highs for prices, and further stirring debate of a housing bubble.

The Canadian Real Estate Association said Friday that a total of 27,722 homes changed hands in December, up 72 per cent from the same month in 2008, when activity ground almost to a halt in the wake of the global financial crisis.

“Sales activity in 2009 came in like a lamb and went out like a lion,” said CREA President Dale Ripplinger.

CREA said the national average price in December rose to $337,410, up 19 per cent year-over-year. For the year as a whole, the national average price climbed five per cent from 2008 to a record $320,333.

In the Edmonton region, the average residential price in December was $319,201, up 2.65 per cent year-over-year. For the year as a whole, Edmonton’s average price for a single-family home was $364,032 while the average for a condo was $240,322.

After the slowest start since 1996, resales in the Edmonton region reached 19,139 residential sales in 2009 to beat the forecast from the Realtors Association of Edmonton.

The Canadian association reiterated that the national average price was skewed due to activity in Canada’s priciest markets.

Year-to-date activity was still trailing 2008 levels at the end of September 2009, but a 59-per-cent year-over-year gain in the fourth quarter, the best ever, pushed 2009 sales activity above annual levels for 2008, it said.

The robust figures continue to show the housing sector is leading the overall domestic economy out from a long downturn. But the housing market’s strength has also been at the centre of a debate over whether a bubble in sector is forming.

“The raft of data will do nothing to quell talk of a bubble, talk that the Bank of Canada and the Canadian Real Estate Association have studiously downplayed,” said Doug Porter, deputy chief economist at BMO Capital Markets.

“And, before we officially jump on the bubble bandwagon, we would again point out that the reported price change is skewed by the surge in Vancouver and Toronto sales.”

The Bank of Canada, ahead of its interest rate decision next Tuesday, said this week it was premature to talk about such a possibility, a view echoed by Finance Minister Jim Flaherty on Friday.

“I do not see evidence of a bubble right now, but we’re going to keep watching. There are some steps we can take, that we will take if necessary,” Flaherty said Friday.

He pointed to tools the government could use to cool the market, including raising credit requirements for insured mortgages, ensuring cautious lending practices, and reducing the maximum amortization periods of mortgages.

Record-low interest rates have helped fuel the housing boom, while low supply and pent-up demand have also driven up prices.

But Scotia Capital economists Derek Holt and Karen Cordes said “dismissing housing risks is being a tad Pollyannaish.”

They said in a report that it was likely that housing will “experience a more sudden decline in activity in the back half of the year and into 2011.

“The drivers are pointing to signifi-cant softening in both the supply and demand supports, such that downside risks to house prices by 2011-12 are material and merit caution,” the economists wrote in a report.

CREA said December sales records were reported in Ontario, Quebec, Saskatchewan, New Brunswick, and Newfoundland and Labrador.

Average prices set annual records in a majority of local markets in 2009, and in every province except Alberta, the association said.

Seasonally adjusted national home sales totalled 46,805 units in December, concluding the strongest fourth quarter ever. A total of 137,957 homes were sold on a seasonally adjusted basis in the fourth quarter of 2009.

Edmonton Journal

A home may be one of the biggest investments you ever make. Saving up a down payment is just the first step. Find out more.

What factors affect the value of a home?

• Location: Real estate people always say “Location, location, location.” That’s because the area you live in will be the biggest factor affecting your home’s price. It’s smart to buy a home where housing prices are likely to increase. Also, the people who may buy your home from you one day may be willing to pay more for a home that is close to schools, sports centres, stores, services, and so on. Keep that in mind as you look.
• The condition of the home and the property it is on: Does the home need a lot of repairs? How is the roof, plumbing, and electrical wiring? A home in good repair may be worth more. Also, the condition of the outside of the home, the lawn, gardens, driveway, and trees will all affect the value of a home. These are the first things that buyers see, and are together known as curb appeal.
• Renovations and updates: An older home might need some work to keep it safe, modern, and comfortable. If you are buying at a home that has had some renovations, check the quality. When you do work on a home you own, do it as well as you can. Poor work can lower the value.
• The economy: There are some things you can’t control that affect house prices, like interest rates. Higher interest rates mean it costs more for a mortgage, so fewer people buy homes. When that happens, the prices of homes can fall. Lower interest rates, on the other hand, can boost buying and drive prices up. House prices often go up for a while, and then come down a bit. Try to find out as much as you can about how prices are changing, or may change, when deciding to buy or sell a home. Often there will be stories in the paper about housing prices.

How much is my home worth today?

If you’re considering buying a home, or you just bought one, you know how much it’s worth. But if you’ve owned your home for a while, its value has probably changed. Here’s how you can find out how much it’s worth now:

• Call a real estate agent: Ask them for an estimate of your home’s value. You may be able to get an agent to do this for free, because they hope to get your business in the future.
• Ask an appraiser: Your bank or a real estate agent should know a number of appraisers. Banks use them to estimate house values before they approve mortgages. You can also look in the yellow pages. An appraiser will charge a fee for the service.
• Check to see what other homes in your area have sold for recently: Compare your home with similar ones that have sold. Unless you keep up with what’s happening in your area, this information may be hard to get. Ask your real estate agent if you can’t find it yourself.

How much will my home be worth in the future?

To estimate a home’s future value, you will have to do some informed guessing. Start with finding out what has happened to prices in your location over several years.

Source: Canadian Real Estate Association (MLS®)

Remember: There’s no guarantee what housing prices will do

Location and the condition of the home are both important factors, as is the economy as a whole.

A home may be one of the biggest investments you ever make. Saving up a down payment is just the first step. Find out more.

A good investment in a renovation should increase the value of your home by at least the amount of money you spent, or close to it. A bad one doesn’t get you much of your money back. Here are some investments that have proven to return their value, or close to it:

• Low-cost improvements that make your home look better: Painting, new wallpaper, and items like new rugs and curtains help to brighten and improve the look of a home, and add value to your house if they are done close to the time of sale.
• New or improved kitchens and bathrooms: Improvements to your kitchen and bathroom seem most likely to increase the value of your home. Keep in mind that these improvements lose value over time.
• Improvements to the living room and the master bedroom: These are also good investments and will usually return most of the money you spent, if not more.
• Investments in more efficient use of energy: Oil, gas, and hydro costs continue to go up. That’s becoming more of a concern when people are looking to buy a home. You can make your home more energy efficient as an investment in its value. Some government programs help reduce the costs of these projects. Also, consider buying appliances that waste less energy.
• Keeping up with repairs. If you do a little at a time, you can avoid doing a lot of expensive repairs at the same time. A reasonable amount to spend yearly is 1% to 2% of the value of your home.

What are some renovations that don’t add much value to my home?

• Swimming pool: Make sure you want a pool before you invest in a pool. The cost of putting in one won’t show up in the price that you get when you sell a home.
• Costly appliances: Most people won’t want to pay an extra $4,000 for your home to pay for a $7,000 refrigerator instead of a $1,200 refrigerator. If you pay thousands of dollars for top-of-the-line appliances, enjoy them. You probably won’t get your money back if you sell them with your home.
• Costly landscaping: The way your home looks from the street can really help interest buyers. It’s called ‘curb appeal.’ But if you spend $30,000 in landscaping, don’t expect to get it all back. Most buyers probably won’t see or appreciate the value.
• Renovating in an area where homes are being torn down: Tear-down activity involves homes being sold, torn down, and replaced by bigger, more expensive homes. If someone is going to buy your home and tear it down, a renovation won’t return any of your money. The buyer will have no interest in the building, just in the land.

Remember: Don’t assume you will get all your money back from a renovation

The key to renovating is to keep the house in good repair and do the renovations you want to enjoy. If you think you might be selling in the near future, focus on renovations that are more likely to get your money back.

When you are looking for top dollar for resale, you need to pay a lot of attention to detail. People are smarter than they were six years ago. They can really see through a quick and dirty renovation job.

OK, so our economic future is uncertain, energy costs keep rising and the Visa bills are already mounting from pre-holiday spending. Add to that the construction of a new home or pricey renovation and the bank account is sure to run dry.

Not so fast. Ottawa designer Ulya Jensen says with careful planning, selective choices and an eye to the future, you can stretch your budget without compromising on good style.

But the owner of Ulya Jensen Interiors admits the process can be daunting. What fixtures to choose? Hardwood or carpet on the floors? And what about the colours?

With so many decisions to make, she says buyers can get mired in “analysis paralysis,” setting themselves up for costly design mistakes.

Earlier this year, Jensen moved into a new home in Westboro — a home she and her boyfriend bought while it was still under construction and tailored to their needs while it was being built.

Fresh from that experience, she offers these tips to help buyers get the most bang for their buck when buying a new home or renovating an existing one:

HAVE A VISION

As a designer, Jensen is trained to have a vision — a good idea of what she expects the house to look like when she’s done. And as soon as she saw the 2,200-square-foot Westboro semi-detached under construction last spring, she knew how she wanted to tweak it.

Jensen wanted an open-concept main floor, which includes a living room, a kitchen and a dining area. Builder Frank Curcio of Bedrock Developments Inc. had planned to put up a wall between the kitchen and the dining area. Jensen worked with him to do away with the wall and make other changes.

“You don’t want to make mistakes,” says Jensen. “It’s good to get in early, but you do need someone to keep you in check.” Which is why she suggests working with a designer if you don’t have a vision.

“It’s very difficult for the average person to envisage the finished product,” she says. “If you can’t see where you are going, you aren’t going to be able to know where you need to go.”

WISE UPGRADES

“We didn’t go crazy on the upgrades,” she says, adding that while she might not have chosen the builder’s oak floors, they decided it wasn’t worth changing. They decided to put the extra money into upgraded vanities and quartz countertops.

“We upgraded only four light fixtures — but they are in smart places.”

You also have to be ready to make decisions quickly. “We had only three days to choose the lighting fixtures,” she says, adding this is when vision comes in handy.

Yes, it’s your home — possibly the home of your dreams. “But you always have to keep resale in mind,” warns Jensen. She tries to do that by being on the cutting edge of design, so that in five years, the home will still look fresh and contemporary.

Actually, the designer got a whole lot of experience in the resale market. She is co-host with Peter Fallico of Home to Flip, a 13-episode real estate-meets-design reality series on HGTV Canada.

“When you are looking for top dollar for resale, you need to pay a lot of attention to detail. People are smarter than they were six years ago. They can really see through a quick and dirty renovation job.”

RESTRAINED COLOURS

It’s best to keep to a few, quiet and related colours.”Because new homes are so white, a lot of people put in more colour than necessary. You don’t want to go crazy with colour on the walls. You can add colour with the furnishings.”

Her Westboro home is full of cool tones of soft grey. “This whole house is the same colour,” she says, explaining that the tone and intensity change from room to room.

PAPER PLAY

Jensen got the plans from her builder, and then made to-scale paper cutouts of her furniture. Every night, before moving in, she sat down with the plans and the cutouts and moved her furniture around to determine the best fit.

“Not everything from your last place works,” she cautions. “Sometimes you have to let some things go.”

Another advantage to playing on paper is that you may be able to order new furniture months before you move in.

ONE FINAL PIECE OF ADVICE

If you can handle it, don’t be afraid to take on a big job. Otherwise, says Jensen, you will find yourself living with someone else’s renovation, or someone else’s idea of what a new home should look like.

A sold sign is displayed in front of a home in Toronto December 15, 2009. A red-hot housing market fueled by cheap money has helped Canada climb out of recession, but fears are growing that it could be a bubble much like the one that brought the United States to its knees.

OTTAWA – As Canada’s red-hot real estate market shows no signs of slowing down in 2010, analysts are beginning to caution some buyers that their best move may be to step to the sidelines.

“If you’re somebody in a situation that you have only five per cent down and you’re stretching to get in the market with a 35-year amortization, I think that would be a very precarious situation right now,” said BMO Capital market economist Robert Kavcic.

Conversely, he said, “if you’re sitting on a pile of cash and looking to move into the real estate market, it would almost be a no-brainer to just wait for lower prices.”

Notes of caution simmered to the surface this week after realtor Royal LePage forecast home prices would continue to “appreciate significantly” during the early months of the year. Already in 2009, they’re up 19 per cent, according to the Canadian Real Estate Association.

The trouble is that while prices are rising, incomes are not.

Yet rock-bottom borrowing costs continue to lure buyers, and investors are rushing in – despite a shortage of listings – for fear that if they don’t get into the market now, they’ll miss their chance.

“It’s absolutely not debatable that housing prices cannot rise faster than incomes over the long term,” said Will Strange, professor of real estate and urban economics at the Rotman School of Management.

Sooner or later, incomes have to rise, or home prices fall, for balance to be attained.

Many analysts argue that home prices are not yet out of line with the incomes it takes to pay for them, Strange said. Yet with the job market still weak, and unlikely to drive new employment and higher wages, odds are that if something’s got to give, it will be prices.

“If I didn’t personally have most of my wealth tied up in housing, this would not be the time that I would choose to jump in,” Strange cautioned.

At the same time, interest rates have nowhere to go but up, which could leave some buyers in a position similar to U.S. homeowners, who had houses worth less than their mortgages after the subprime bubble burst and prices crashed.

“We’re certainly urging people to error on the side of caution,” said Bruce Cran, president of the Consumers’ Association of Canada.

“If you’re paying an amount of money, whatever that might be, that you couldn’t sustain if interest rates rose by say 25 or 30 per cent – I can see that being a problem for a lot of people.”

Canada’s not headed for anything similar to the U.S. subprime mess because lending standards here are higher and because people can’t just walk away from their homes as they can in the U.S., other than in Alberta.

But there may yet be an economic impact if home prices turn down, as home values relate directly to the economy, fuelling spending as they rise and tightening personal budgets as they fall, Strange said.

For now, many observers are predicting, as does Royal LePage, that the market will find its balance later this year as rates rise and more listings come on the market.

In the meantime, there are still many good reasons to buy a house, Strange said, “but don’t buy it because you think the price is going to go up.”

Emotions are a big part of the homebuying process. People have to feel good about the house they are considering purchasing.

Both physically and financially, there has to be a comfort level or the cheque won’t be signed.

The location might be perfect and the price may fit, but the house might need some work– and the cost of, say, new kitchen cabinets, flooring and windows might just be enough to break the deal.

Laura Parsons, Calgary-area manager of national business development for the Bank of Montreal, has heard this scenario countless times from those on the front lines of the real estate industry.

“I talked with one realtor who showed clients something like a hundred homes and there was always something wrong,” she says.

“They couldn’t put a deal together.”

Banks want to help realtors sell homes to get the financing business, so Parsons had to find an answer to the you-scratch-my-back, I’ll-scratch-yours problem.

In the back of her mind, there was something she recalled that might solve the problem–some financing vehicle that would help both realtors and potential homebuyers.

After much mulling, it came to her.

More than five years ago, Canada Mortgage and Housing Corp. introduced a Purchase Plus Improvement Program (PPIP) that would allow homebuyers to finance the purchase of the home plus the cost of immediate renovations–all in the original mortgage.

Because there was no big flag-waving, horn-blowing announcement of the program, it’s been under-utilized to some extent.

Parsons decided it was time to brush the dust off the PPIP–which is available through both CMHC and Genworth Financial Canada –and put it to better use.

“We wrapped our arms around how to deal with this issue and came up with mortgage staging–our way of helping people fix up their homes without spending much extra money on a mortgage payment,” she says.

In a nutshell, here’s how the PPIP works,

A home is purchased for, say, $400,000. Based on a five-per-cent down payment and a 35-year mortgage plus things like the mortgage insurance, PIT (principal, interest and taxes). and property taxes, the monthly payment would be $1,524.

But $50,000 worth of renovations are needed to bring the home up to snuff at move-in. Add this amount to the original mortgage and the monthly cost goes up just $169–less expensive than taking out a separate loan.

When the decision has been made to make an offer on a home that needs upgrading, Parsons says the offer is conditional for a longer-than-normal period to arrange for a contractor to look at the place and give an estimate for the work.

If everything is satisfactory, the timing of the work is then between the buyer and contractor.

Bart Dutchak is one of the early success stories for the program.

The 32-year-old bought a unit in a 25-year-old condo building in April, knowing ing full well he was going to be spending money to fix it up on his own–things like laminate for new countertops, as well as new flooring, crown mouldings and baseboards.

“I worked for two solid months after work to get it done,” he says.

The bill was $10,000– which, when added to his original mortgage, didn’t make all that much a difference to the monthly outlay.

He shopped around, but he says he couldn’t find a lender who would let him add the renovations onto his original mortgage.

“Then the Bank of Montreal treal said, ‘Yes,’ and I was pretty excited to be able to combine everything,” says Dutchak, who is a senior draftsman and detailer at Canam Steel. “It just made it all so much simpler.”

Elena Salikhov, Calgary based based area manager for business development for CMHC, says the program was established to help people wanting to make improvements that would increase the value of the property.

The key to the program is that the cost of the renovations must be reflected in the expected future value of the home.

In the example of the $400,000 home with $50,000 worth of renovations, CMHC or Genworth must agree the home would have a value of at least $450,000 after renovations are done.

So, with CMHC and Genworth worth firmly on side, Parsons set out to find other partners who would help increase the profile of the mortgage program.

Because she is involved with the Canadian Home Builders’ Association-Calgary Region, Parsons explained the program pro-to its Renomark committee, which represents many of the city’s renovation contractors.

Unlike Dutchak, some people don’t want the challenges of doing the renovation themselves. They’d rather hire the work out.

Paul Klassen, president of Pinnacle Group Renovations by Design Ltd., was in the Renomark audience for Parsons’ address and says the timing was uncanny.

As part of the company’s five-year strategic plan, Klassen developed a 3-D application to show people how a renovation would look when complete.

The fact a program was available to help clients pay for it was an added bonus.

“I ran out to speak to her, explaining that this was a perfect marriage for us and would be another tool in our business arsenal,” he says.

Since that meeting, he has talked about PPIP with a couple of his clients.

“What we thought was a wall (to a renovation decision) has become a door,” says Klassen.

Parsons then went in search of a supply partner. Because of prior business dealings with Rona, she received the support of Mel Anderson, manager of the retail chain’s Crowfoot location.

“We thought it would tie in well with services we were already offering at the store,” says Anderson.

Rona has an installation department that includes designers and estimators. They also have programs and facilities to assist customers with all aspects of a renovation.

“We are an option to hiring a contractor,” says Anderson. “We can walk customers through the design and buying processes right here in the store, or we can go to their residence and give them an estimate.”

With program partners on side, Parsons says consumers are able to take advantage of another federal government program that might save them money and time.

“Its been around for a long time, but few have taken advantage of it because they don’t realize the little impact it will have on them financially,” she says.

———

In Short

If you intend to buy a home that needs some immediate upgrades, the Purchase Plus Improvement Program may be the answer. A qualified mortgage consultant can guide you through the process:

– Step 1: Mortgage pre-approval– Arranging a pre-approved mortgage not only protects you if interest rates increase, it also gives you a

clear price range for your new home. At least a five-per-cent down payment is required for a PPIP mortgage.

– Step 2: Obtain cost estimates for upgrades– Once you have found a home, you need to get written quotes from licensed contractors on the planned renovations.

– Step 3: Mortgage application–For example, with five-per-cent down, your mortgage consultant would apply to a lender for whatever’s lowest: 95 per cent of the purchase price plus 95 per cent of the cost to finish the renovations, or 95 per cent of the “as improved” market value, determined by the institution which insures the mortgage after the renovations.

– Step 4: Finalize purchase–Your realtor and mortgage consultant will walk you through this part of the process. The funds for renovations will be sent to your lawyer in trust when the mortgage closes.

– Step 5: Complete upgrades–The lender will hold back funds for the renovations until the work has been completed and inspected, at which time the contractor can be paid.

———

The Buyer

Bart Dutchak.

AGE: 32.

BACKGROUND: A senior draftsman and detailer for Canam

Steel, Dutchak bought an apartment condo in a 25-year-old building that he knew needed some renovations, including flooring, baseboards, crown mouldings and countertops. Using an estimate of the renovations costing $10,000, Dutchak shopped around for a lender who would add this cost to his original mortgage through the Purchase Plus Improvements Program offered by Canada Mortgage and Housing Corp. and Genworth Financial Canada. He got in touch with a Bank of Montreal mortgage official and received approval. He did the renovations himself over the course of two months working in the evenings.

TORONTO — Canada’s residential real estate market is expected to remain unusually strong through the first half of this year after a strong finish to 2009, according to a survey published Thursday by Royal LePage.

The Royal LePage analysis is consistent with other recent reports on the state of the Canadian real estate market, which has rebounded over the past 12 months after sales dried up in late 2008 and hit a multi-year low in January 2009.

The Canadian market’s sudden plunge was sparked by a credit crunch that originated in the U.S. housing and lending industries – eventually spreading globally, causing a worldwide recession in the late summer and early fall of 2009.

However, the Canadian real estate market has been much quicker to recover than its American counterpart, in part because of a more stable banking industry, historically low interest rates and improving consumer confidence.

Royal LePage executive Phil Soper says Canada’s real estate market enters 2010 with “considerable momentum from an unusually strong finish to the previous year.”

The stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity to new highs, he said in a statement.

Royal LePage says house prices appreciated in late 2009, with fourth-quarter price averages higher than in the fourth quarter of 2008.

The average price of detached bungalows rose to $315,055 (up six per cent), the price of a standard two-storey home rose to $353,026 (up 5.2 per cent), and the price of a standard condominium rose to $205,756 (up 6.4 per cent).

Regions that saw the strongest declines during the recession are now showing marked gains. Those regions include Toronto and the Lower Mainland, B.C.

Vancouver, which is frequently Canada’s most expensive real estate market, experienced a particularly robust quarter, with home prices rising across all housing types surveyed.

“No other sector of the economy has been as highly affected by economic stimulus as housing,” said Soper.

“As consumer confidence has improved, Canadians have shown a lingering reluctance to acquire depreciating assets such as consumer durables, but have embraced the opportunity to invest in real property.”

Royal LePage estimates that Vancouver’s real estate prices will rise a further 7.2 per cent this year, although February may be soft because of the Olympic Winter Games that will be held in the city and nearby Whistler, B.C.

Detached bungalows in Vancouver sold for an average of $828,750 in the fourth quarter, up 11.4 per cent from the same period last year. Standard condominiums in Vancouver went up 11.8 per cent year-over-year to an average of $452,750. Prices of standard two-storey homes in Vancouver rose 9.6 per cent year-over-year, selling at $917,500.

In Toronto, the average price of a standard condo rose 2.9 per cent to $309,316, detached bungalows rose 9.9 per cent to $446,214 and standard detached homes increased 3.5 per cent to $564,175.

In Montreal, the average price of a detached bungalow rose to $245,125 (up 3.1 per cent; a condo increased to $216,667 (up 16 per cent) and a two-storey house increased 12.3 per cent from a year earlier to $345,789, Royal LePage said.

The Greater Montreal Real Estate Board reported Thursday that the number of sales last year increased 41,802, up three per cent from 2008. The median price of a single-family home was $235,000 last year, up four per cent from 2008.

“Although sales decreased the first four months of 2009, Montreal’s real estate market rebounded and finished the year on a positive note,” said Michel Beausejour, the Montreal board’s chief executive.

The group that represents Toronto-area realtors reported Wednesday that there were 87,308 transactions last year through the Multiple Listing Service, a 17 per cent increase over 2008.

In December, there were 5,541 sales in the Greater Toronto Area (average price $411,931), up from 2,577 sales in December 2008 (average price $361,415), according to the Toronto Real Estate Board.

The Toronto board also said the number of sales of existing homes rebounded in the latter half of 2009 after a slow start at the beginning of last year.

Royal LePage’s average price estimates for other Canadian cities include:

-St. John’s, N.L.: Detached bungalow, $217,167 (up 14.3 per cent); standard two-storey house $298,833 (up 14.1 per cent).

-Halifax: Detached bungalow, $238,000 (up 10.7 per cent); standard two-storey homes, $265,333 (up 1.8 per cent).

-Charlottetown: Detached bungalow, $160,000 (up 1.9 per cent); standard two-storey $195,000 (up 3.7 per cent).

-Saint John, N.B.: Detached bungalow, $228,000 (up 1.3 per cent); standard two-storey $299,000 (up 1.5 per cent).

-Moncton, N.B.: Detached bungalow, $152,300 in the fourth quarter (up 1.5 per cent); standard two-storey home, $131,000 (up 4.0 per cent)

-Fredericton: Detached bungalow, $182,000 (up 12.3 per cent); standard two-storey, $210,000 (unchanged).

-Ottawa: Detached bungalow, $332,417 (up 3.4 per cent); standard two-story home $331,917 (up 3.7 per cent).

-Winnipeg: Detached bungalow, $241,650 (up 9.9 per cent); standard two-storey home $275,500 (up 10 per cent).

-Edmonton: Detached bungalow, $299,286 (down 0.7 per cent); standard two-storey home, $340,557 (down 1.2 per cent)

-Calgary: Detached bungalow, $412,478 (up 0.5 per cent); standard two-storey home, $427,067 (up 2.3 per cent).

By David Paddon Copyright © 2010 The Canadian Press

NEW YORK (CNNMoney.com) — Home remodelers are getting less bang for their bucks. For the fourth straight year, renovation jobs have added less to resale values relative to their costs, according to an annual Remodelling Cost vs. Value Report released this week by the National Association of Realtors.

The average remodelling job cost $50,908 in 2009 and added $32,497 to the value of the home, a ratio of 63.8%. That was down from a cost-to-value ratio of 67.3% in 2008, when the average was $49,866 and the added value was $33,568.

One common renovation, a mid-priced bath remodel, for example, runs an average of $16,142 and adds only $11,454 to the resale value of a house — recouping just 71% of its cost. In 2008, the same job cost less — $15,899 — and typically added $11,857 to the home’s value, recouping 74.6%.

The most financially successful jobs are smaller-scale, lower-cost renovations that improve the exterior appearance of homes. In this down real estate market, curb appeal is king.

“Once again, this year’s report highlights the importance of a home’s first impression,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

Ron Phipps, a real estate broker in Rhode Island, said how the house looks from the outside is more important than ever.

“If you’re driving down the street and the house doesn’t have great appeal, it doesn’t matter how nice it is inside,” he said.

But here’s the kicker: Clients are savvier than ever in their shopping. Even though the costs of home improvements are less likely to be returned on resale than they have been in prior years, sellers may still have to bite the bullet and do the remodelling if they want their house to sell at all, he said.

“It’s kind of intriguing,” said Phipps. “Buyers are using the unimproved houses to negotiate lower prices, but they wind up buying the remodelled homes.”

So, if there are two similar houses in the area, buyers will use the listing price of the one that has not gone through a metamorphosis to get the seller of the renovated house to slash their price. Buyers want to pay for the caterpillar but get the butterfly.

Seller must play along if they want to make deals. “You get to sell the house more quickly if you do the renovations,” Phipps said.

Biggest pay-offs

The major job that returns most in resale value is an upscale replacement of siding using fibre-cement. The job costs an average of $13,287 but increases home value by $11,112, or 83.6%. A vinyl siding replacement returns 79.9% of costs.

Adding a basement bedroom is also fairly cost effective, averaging $49,346 but adding $40,992 in value, an 83.1% return.

“Increasing liveable square footage with a new deck or an attic bedroom is usually more valuable than just remodelling existing space,” Phipps said.

The return on investment for some jobs varies greatly by region.

In New England, where winter are long and cold, vinyl window replacements reap a better return than they do in the warm South Atlantic region, where poorly insulated windows don’t mean as much expensive heat leaking away.

So, although replacement windows cost more in New England — an average of $11,155 — they add $9,152 to home values there, recouping 82.3% of their cost. In the South Atlantic states, they cost $9,705 but add just $7,417 to home values, 76.4% of their cost.

On the other hand, buyers in the South Atlantic seem to reward sellers for adding living space more than they do in New England. Maybe thrifty Yankees hate having to heat those extra rooms.

Finishing a basement returns 84.4% of its $55,357 cost in the South Atlantic and only 64% of the $65,715 New Englanders spend for the job.

Among the remodelling jobs faring the worst in return on investment were large, upscale kitchen remodels. They cost an average of $111,794 in 2009 and added $70,641 in recoupable value, just 63.2%.

That was down a whopping 7.5 percentage points from their 70.7% return on investment in 2008 . At the height of the housing boom, in 2005, upscale kitchen renovations returned more than 80% of their costs.

“A lot of the things that, historically, had huge value, don’t have as much today,” said Phipps. “If you want to redo a kitchen, it may no longer make as much sense to use upscale appliances — Viking ranges, Sub-Zero refrigerator. Buyers may not pay any more than they would for a home with GE appliances instead.”

Of course, most remodelling jobs are done to please homeowners. Any increase in home value is a bonus, not an end in itself. But for anyone thinking of selling in the near term, keeping an eye on the bottom line is always a good idea

By Les Christie CNNMoney.com

Well I hope you all had a Happy Holiday!! Now it is time to start thinking about what might happen in the New Year. Current data that I use to forecast the market are skewed right now because of the holiday season so we will wait until we have new data next month to see where the market is going.

It seems the consensus that home values will go up in the New Year, but I don’t think that it will be as much as most people think.

Yes, there are parts of Canada that the market is really getting hot again – but that is only because their home values had dropped more than we had, and their economies were more depressed than what we had experienced here in Edmonton, and Alberta for that matter.

The recovery in the USA isn’t going as well as most people had hoped, and that will slow down any recovery we have here in Canada as they are our biggest trading partner.

I think we will more likely to see a 5% increase in home values as that would be more realistic. We might be able to get lucky and get up to 10%.

But this all could be brought to a halt or slow down as the finance minister is worried that Canadian people have taken on more debt than they ever have in the past. He is thinking about possibly making changes that will affect mortgages and real estate.

Some of the changes they are considering are raising the amount of down payment up from the current 5% to at least 10%. They are also talking about shortening the amortization period from the current 35 years. Another expectation is that the interest rates will be going up this year.

These factors will have a great impact on the ability for people to buy homes, especially for first time buyers. They will now have to wait longer to save for a down payment and they will now qualify for less of a home because of the lower amortization period.

The real estate cycle starts with the first time buyer. They need to get into the market so that everyone else can sell their home and move up into a bigger or more expensive home.

In my opinion if any of these changes are implemented you can expect the real estate market to slow down and curb the chances of valuations to go up.

So if you are a first time buyer I would advise you to do everything in your power to buy sooner than later. We might be able to help you with this process including helping you to get pre-approved with the lowest rates possible ( in many cases lower than the banks), and we can send you a first time buyer package.

To receive the package call Kate at my office at 780-643-8151 or send her an e-mail @ teamleadingedge@shaw.ca

Lets see what this month will give us and hopefully we will have a better indication as to what we can expect in this springs marketplace, and that is my two cents… Serge