Edmonton Real Estate Blog

Edmonton, October 2, 2012: The REALTORS® Association of Edmonton reports that residential listings and sales have trended lower in the third quarter after an active start to the year. In September, there were 1,269 residential sales in the greater Edmonton market as compared to 1,442 in September 2011. Despite the recent cooling trend, residential sales year-to-date are still up 7.2% as compared to last year at this time. There have been 14,565 residential sales to the end of the third quarter as compared to just 13,729 last year.

“There were changes to the mortgage qualification rules in March,” said REALTORS® Association of Edmonton President Doug Singleton. “We did not see an effect on the local market at that time but it seems to have had a cooling effect in the past quarter.”

The average1 price for a single family dwelling (SFD) has remained higher than last year for each of the past nine months. In September, the SFD average price of $376,678 was up just 0.23% from the previous year and is up 2.78% from the January 1 price. The all-residential average price is down 2.6% from last year at $323,369. This is the first month this year that the all-res price has dipped below the 2011 figure for the same month.

Condominium and duplex/rowhouse prices are more volatile and vary widely from month to month. In September average condo prices were down 3.1% ($229,246) while duplex/townhouse prices on average were up 2.75% ($307,739). Still, after nine months both current prices are up from the January 1, 2012 prices for the category.

Total MLS® System listings this year are up 104 units as compared to last year at 33,295 properties but Total MLS® System year-to-date sales are 16,487 units as compared to 15,378 at the end of the third quarter in 2011. There are 6,956 residential properties in the inventory compared to the 8,062 last year at this time. Rural and commercial property sales are both up marginally compared to last year although listings have dropped. The residential sales-to-listing ratio was down from 56.7% to 52.3% and residential days-on-market was up to 59 in September from 54 in August.

“Sales always fall month-to-month at the end of the year; that’s just normal market fluctuation,” said Singleton. “But overall, the market has been stable with little market advantage for either buyers or sellers. Edmonton is still one of the best places in North America to own property and I urge consumers to talk to their local REALTOR® when they are in a position to buy or sell property.”

Activity (for all residential sales on Edmonton MLS® System)

¹ The total value of sales in a category divided by the number of properties sold
² Single Family Dwelling
³ The middle figure in a list of all sales prices
⁴ Residential includes SFD, condos and duplex/row houses.
⁵ Includes residential, rural and commercial sales

¹ Average prices indicate market trends only. They do not reflect actual changes for a particular property, which may vary from house to house and area to area. Prior period figures have been adjusted to include late reported sales and cancellations and therefore reflect a more accurate view of the period than previously reported at month end. The RAE trading area includes communities beyond the CMA (Census Metropolitan Area) and therefore average and median prices may include sold properties outside the CMA.

Zero down payment mortgages will ends on October 31, 2012. In order to get in before the deadline, buyers need a offer in place by October 31 and must take possession before December 31.

For any buyers who have difficulty saving a down payment, this is a great alternative to renting. Lenders are tightening up and once this ends, I can’t see lenders bringing it back.

(Reuters) – Canadian housing starts surged unexpectedly in August as a few large multi-unit projects in Toronto, pre-sold in late 2010 and early 2011, broke ground, data from the Canada Mortgage and Housing Corp showed on Tuesday.

The seasonally adjusted annualized rate of housing starts was 224,900 units in August, compared with 208,000 units in July. The July figure was revised down slightly from 208,500 units reported previously.

The number of starts in August was well above the forecasts of analysts in a Reuters poll, who had expected starts to slow to 200,000 starts.

To view and search all MLS listed homes for sale in Edmonton visit www.edmontonhomesforsale.biz

Q.  What is the change?

A.  RECA is preparing to implement a rule change that will require written service agreements between brokerages and all clients. Translated, this means that REALTORS® will need to enter into a written service agreement with buyer clients as they currently do with seller clients.

As your professional association, AREA is participating in this collaboration to help facilitate communication and support materials for members as they apply the change.

Q.  When will the change take effect?

A.  The rule change will affect all industry sectors and is expected to come into effect mid to late 2013.

Q.  Why the change?

A.  The primary reason for the rule change is to ensure that the role of the industry member is clear to the client. Written service agreements will be a key tool through which this clarity will be achieved.

RECA’s research indicates that, when clients are better informed, there is less confusion and fewer disputes.

Additionally, establishing written service agreements with all clients may offer some benefits and protections for industry members.

Written service agreements are also in keeping with our collective desire to have the consumer view our members as professionals, as this is a step that models other professions.

REIX, the real estate boards and AREA are all in support of this change, both for the protections it offers both industry members and consumers, and for the potential benefits to members (See possible benefits below.)

Q.  What are the implications for REALTORS®?

A.  REALTORS® who represent buyer clients will be required to establish a written service agreement with them.

This topic often results in two main concerns. These concerns are listed here with how they will be addressed in the rule change. Hopefully, the approach RECA is taking towards these two areas will alleviate much of the potential concern that REALTORS® may have in applying the new rule:

Binding Service:  The written service agreement will not necessarily bind the buyer client to an exclusive service arrangement with any one member. Practitioners and clients will be able to opt to enter into either an exclusive or a non-exclusive agreement.

Financial Obligation:  The written service agreement will not necessarily bind the client to a financial obligation. For example, the written agreement can stipulate that buyer brokerage compensation may come from the seller or seller’s brokerage.

Q.  How will this benefit REALTORS®?

A. There are several potential benefits for REALTORS® that could arise from this rule change:

Greater Client Loyalty:

Clients who sign a written service agreement with their practitioner are more likely to remain loyal because the process of building a written service agreement creates a more concrete relationship than serving a client without one – even if the agreement the client signs is a non-exclusive one.

The requirement for all practitioners to use written buyer brokerage service agreements lessens the chance that a client will opt to work with a practitioner who does not require them to sign an agreement.

Enhanced Professionalism:

Industry members are pushing for higher standards of professionalism and ways that their image can be enhanced in the public eye.

Written service agreements can help:

One way to demonstrate professionalism is to outline, in writing, what the industry member will do for the client and then deliver on those expectations in an exemplary way.

Completion of a written agreement with the client not only models other professions, the process creates an opportunity for dialogue. It also helps ensure that the client clearly understands the roles and responsibilities of each party to the agreement – the real estate professional, and the client.

Opportunity to Educate the Client:

Completing a written agreement with the buyer client creates an opportunity to educate them about the member’s services, the nature of the relationship and how the practitioner gets paid – all important aspects of building a relationship of trust and demonstrating professionalism.

The written buyer brokerage service agreement need not be exclusive nor bind the client to any financial obligation, lessening the likelihood that the client will resist signing it. The agreement simply needs to state whether it’s exclusive or non-exclusive and that the buyer brokerage compensation may come from the seller through the seller’s brokerage.

Supports More Buyer Representation:

More and more practitioners are moving towards buyer representation, as evidenced by the number of Alberta practitioners who have attained their ABR® (Accredited Buyer’s Representative) designation. While buyer clients assume the practitioner is working for them, the relationship isn’t always defined in writing.

Establishing written service agreements for buyer clients puts the relationship with buyer clients on an equal footing with seller representation.

Liability Protection:

Our society is tending towards more law suits and industry members can be better protected against liability by having something in writing with clients

Even if a client chooses not to litigate, a written service agreement reduces the chances of dispute and dissatisfaction on the part of the client, because the client has a written record of the roles and responsibilities of both parties to the agreement.

Fewer claims lessen the likelihood of the need to increase E&O premiums to cover law suits.

Q.  What happens next?

A. RECA is collaborating with AREA on a joint plan to introduce this change.

Near-term next steps include:

Focus Groups:  RECA and AREA are jointly conducting focus groups in Edmonton and Calgary with members later this summer as a means to test the implementation plan, including reaction to proposed messaging, suggested resources for members to aid them in applying the rule change, and the proposed timing of the rule change. The local boards have been asked to provide potential candidates from their membership to participate in the focus groups. While the boards have supplied candidates against a set of criteria (to ensure participants are demographically representative of our membership), you can also contact AREA if you have a desire to participate.

The focus group results will help us to fine-tune the implementation plan, and then AREA will get to work on building resources to assist members in applying the rule change, once it comes into effect.

Stay tuned!

Questions? Need More Information?

Please feel free to email AREA at communications@areahub.ca call toll-free 1.800.661.0231 or you can contact Natalie Scollard, at RECA, at nscollard@reca.ca.

To view and search all MLS listed homes for sale in Edmonton visit us at www.EdmontonHomesForSale.biz

The Edmonton Real Estate market continues to be robust. As
of this morning July 18, 2012 there were 3,076 single family dwellings listed
on MLS with the Realtor’s Association of Edmonton. This level of inventory is a
very healthy.

In the past 30 days there were 941 homes sold. For this time
of year this is a very healthy and strong number. This would give us a listing
to sales ration of 3.27:1 which is well below the 4:1 ratio needed for a
neutral or balanced market.

With a 3.27:1 listings to sales ratio I expect there to be
continued pressure for valuations to continue to rise. I think that in the next
30 days we will see how much of an impact the new mortgage rules that came into
effect July 09, 2012 will have on the real estate market in Edmonton.

If you are thinking of buying you will probably save
yourself thousands of dollars by buying now versus waiting a few months. Call
me today if you would like some help to find your next home. Serge @ 780-995-6520.

To view and search all MLS listed homes visit us at
www.edmontonhomesforsale.biz

Today (June 21, 2012), the federal government announced amendments to government-backed mortgage standards in Canada that will take effect on July 9, 2012. These changes will make it more difficult to qualify for a mortgage, and will reduce the mortgage amount that you will be able to get. Buy now before the changes come into affect.

Jim Flaherty, Minister of Finance, announced the following changes to the standards governing government-backed insured mortgages:

the maximum amortization period was reduced from 30 years to 25 years;  the maximum amount Canadians can withdraw in refinancing their mortgages was lowered to 80 per cent from 85 per cent of the value of their homes; the maximum gross debt service ratio was fixed at 39 per cent and the maximum total debt service ratio at 44 per cent; and the availability of government-backed insured mortgages was limited to homes with a purchase price of less
than $1 million.

Better buy now before the mortgage rule changes making it more difficult to buy a home, and making it less affordable.

http://business.financialpost.com/2012/06/21/ottawa-tightens-mortgage-rules-what-the-analysts-say/

Market “timing” isn’t the only factor that influences how quickly your house will sell or for how much.

The preparations you make before listing your house on the market will also have a big impact on your success. Consider these questions: How well is your house staged? Is it in a good state of repair? Is it priced correctly based on local market conditions? Is it listed and promoted so that all REALTORS® and their clients understand the advantages your house and neighbourhood have to offer?

Sure, there are peaks and slower cycles throughout the year. And, there are economic periods when the real estate market is either heating up or cooling down. But you don’t have any control over those factors. Plus, you can never accurately predict exactly where the market is within each cycle.

What you can control is how well you prepare your house for sale so that it’s desirable to as many potential buyers as possible.

So when is the best time to sell your house? When you want or need to sell it.

Want to find out how much your house will sell for in today’s market? Call today.

The month of May is almost over and a review of the number of listings and sales of single family homes in Edmonton proper show a very robust market.

Currently there are 3,094 single family homes listed in Edmonton proper. That is a healthy level of inventory on the market giving buyers ample homes to choose from.

The number of sales has been on the rise. In the previous 30 days there have been 1,062 single family homes sold in Edmonton proper.

With this level of homes available for sale, and the number of sales that have taken place in the previous 30 days this would give us a listings to sales ratio of 2.91:1. This low of a level has not been seen for some time in Edmonton. Also with a ratio so much below the 4:1 that we need in Edmonton for a neutral or balanced market there is going to be substantial pressure for home valuations to rise.

Buyers should not put off buying a home before house prices go up any further.

* Information source: The Realtors Assc. Of Edmonton as of May 30, 2012.

For more information or to get pre-approved visit www.EdmontonMortgageSource.com

Canada’s economy is gradually recovering and is expected to grow by 2.25 % this year and 2.5 % in 2013, according to a new report by the Organization for Economic Co-operation and Development.

Private consumption and investment will continue to be the primary drivers of growth in Canada, said the report, which was published Tuesday.

Canada’s growth will slightly outpace the OECD average, which is expected to be 1.6% in 2012 and 2.2% in 2013.

Source: National Post – May 22, 2012