“REALTORS® remain optimistic about the future of the local market,” said REALTORS® Association of Edmonton President Chris Mooney. “In January, we forecast that single family homes would be priced about three percent higher at year end. Now they are priced five percent higher and we don’t anticipate that prices will soften very much in the fourth quarter. We did not anticipate an overall increase in condo prices so we are a little surprised that condo prices are also up almost five percent.”

The average price for a single family detached home in September was $375,738, up 1.4% from a month earlier. The average price of a condo was up 2.1% to $236,125 during the same period. The average residential price in the Greater Edmonton area in September was up 2.6% to $332,782 from $324,217 in August. Duplex and rowhouse sales of just 66 units in September showed an average price drop of 3.2% to $296,117.

The consumer confidence that has allowed housing prices to rise has also spurred sales. There were 1,345 residential property sales in September, with listings of 2,585 residential properties. The residential sales-to listing ratio was 52% with homes resting on market for an average of 56 days. Total MLS® listings numbered 3,292 with total MLS® sales of 1,536 properties of all types.

“Movement of properties in the lower half of the price range is faster than the more expensive properties,” said Mooney. It takes 48 days on average to see an SFD priced below average compared to 53 days to sell a home priced over the average. “The consumer is price conscious and with 8,062 homes currently on the market, the buyer has lots of choice. Sellers should ensure that their home price is based on current market reality and not a fantasy if they want to sell in a reasonable time period.”

Highlights of MLS® System Activity

As a Realtor in Edmonton I run across a lot of porperties that have been upgraded. Many have the proper permits in place, many do not. This can be a large problem when it comes to selling the property, as that is when the lack of permits comes to light.

Very generally speaking, if you are doing a reno that does not alter the structure of the house, the mechanics of the house or the layout of the whole property; then you do not need a permit. For example: You can replace your flooring, replace a window of the same size as the old one or put new shingles on your roof without a permit. However, if you want to change the plumbing, add a covered deck or build an outbuidling of some sort, you will need a permit.

If you need more detailed information, the city offers complete guidelines herehttp://www.edmonton.ca/bylaws_licences/licences_permits/additions-and-improvements.aspx

Furnace Inspection

• Call an HVAC professional to inspect your furnace and clean ducts. Local Gas companies will inspect your furnace at no charge.
• Stock up on furnace filters and change them monthly.
• Consider switching out your thermostat for a programmable thermostat.

Get the Fireplace Ready

• If the chimney hasn’t been cleaned for a while, call a chimney sweep to remove soot and creosote.
• Buy firewood or chop wood. Store it in a dry place away from the exterior of your home.
• Inspect the fireplace damper for proper opening and closing.
• For gas fireplaces, if the glass has a cloudy residue on the inside, carefully remove the glass as it is heavy. Clean the glass with either vinegar and water or a glass cleaner specific for gas fireplaces. Do not use windex or other regular glass cleaners as they leave a residue that will cloudy up instantly once you turn the fireplace on.

Inspect Roof, Gutters & Downspouts

• Clean out the gutters and use a hose to spray water down the downspouts to clear away debris.
• Consider installing leaf guards on the gutters or extensions on the downspouts to direct water away from the home.

Check the Exterior, Doors and Windows

• Inspect exterior for crevice cracks and exposed entry points around pipes; seal them.
• Use weatherstripping around doors to prevent cold air from entering the home and caulk windows.
• Replace cracked glass in windows and, if you end up replacing the entire window, prime and paint exposed wood.
• Switch out summer screens with glass replacements from storage. If you have storm windows, install them.

Check Foundations

• Rake away all debris and edible vegetation from the foundation.
• Seal up entry points to keep small animals from crawling under the house.
• Seal foundation cracks. Mice can slip through space as thin as a dime.
• If the ground is sloped towards the foundation, consider adding soil in order to slope the ground away from the foundation at approx. 10 degrees.

Prevent Plumbing Freezes

• Drain all garden hoses.
• Drain air conditioner pipes and, if your AC has a water shut-off valve, turn it off.
• If you have outdoor faucets that are not frost free, turn of the water valves for the faucets. The shut off valves should be located in the ceiling of the basement in close proximity to the outdoor faucet location, not always so in some houses.

Install Smoke and Carbon Monoxide Detectors

• Buy extra smoke detector batteries and change them when daylight savings ends.
• Install a carbon monoxide detector near your furnace and / or water heater.
• Test smoke and carbon monoxide detectors to make sure they work.
• Buy a fire extinguisher or replace an extinguisher older than 10 years.

Service Weather-Specific Equipment

• Drain gas from lawnmowers.
• Service or tune-up snow blowers.
• Replace worn rakes and snow shovels.
• Clean, dry and store summer gardening equipment.
• Sharpen ice choppers and buy bags of ice-melt / sand.

“Consumers are wary in the face of uncertainty in the global economic markets and they receive constant reminders from federal officials about the dangers of carrying too much debt. Other real estate markets have seen recent boom and bust cycles that are not evident in our local market,” said REALTORS® Association of Edmonton President Chris Mooney. “Residential property is holding its value and the economic prospects for the Alberta and Edmonton markets show real growth potential in the next few years.”

Condo prices have slipped seven percent since 2008 because of an oversupply and lack of demand resulting from tighter mortgage qualification rules. In August 2008, the average price for a local condo was $248,000. This past August it was just $231,735. Overall, the all residential price has varied from $329,600 in 2008 to $324,217 this year (August figures).

In August 2011, there were 969 single family homes reported sold through the Multiple Listing Service® with 428 reported condo transactions with a total of 1,507 reported sales of all types of residential property. There were 1,564 total residential sales in July 2011 reflecting the typical pattern of slower sales as we head into fall.

“A stable market place and slightly lower prices combined with a slower sales cycle means that there are homes available in all price ranges,” said Mooney. “The residential median price ($315,000) remained almost the same as the previous month while the average prices dropped. This indicates that there is a softening of prices at the upper end of the market. Under these conditions, sellers with property priced below the average price for their property type and location will attract more attention and get a quicker sale.”

The sales to listing ratio notched up four percent to 51% as a result of steady listing activity and the typical sales cycle stretched to an average of 57 days-on-market indicating slower sales in August.

Highlights of MLS® System activity

In my experience most people are looking for the average price of a single family home when they ask that question, so that is what I usually give them.  But even that answer, though highly sought after, can mean almost nothing. At best it can be used a very general indicator of how the market is doing as a whole over time. It should not be used to determine if a specific property has gained or lost value. Here is why:

Lets take the overall average price of all real estate in Edmonton today as an example. As I write this it sits at $327,731. This is calculated by taking the total value of all real estate sold so far this month ($279,882,408) and dividing it by the total sales that made up that number (854). Basic math right? Lets say that later today, some smart investor snaps up 15 small condos at $75,000 each. That would swing the average price down to $322,160. Does that mean that Mr. Smith in his perfectly average house across town just lost about $5500 on the value of his home? Not at all. If a major construction project that has a positive impact on his neighborhood got finished today, maybe he made some money on it.

The point is, the average price is a good tool to track the overall condition of the market over time. But to use it to determine the value of a specific home will not give you accurate results. Each home is unique and sits in a unique neighborhood. There are thousands of factors that can affect the value of a home and it often takes a professional to find and make use of those factors.

So yes, watch the general stats to keep yourself informed on a broad scale. But when it comes to finding out the value of your home or one you want to buy, you will need to dig a lot deeper. If you need a hand with that just give me a call and I’ll figure it out for you, no charge.

1. Interview several agents before making your final choice.

2. Know your rights and obligations. Have your realtor explain the contract in detail or have a lawyer look at it with you.

3. Always base your price on market value rather than needs or emotions.

4. If the agent suggests your home needs some TLC, do the required fix-ups.

5. Make sure the agent is taking out advertisements to promote your property.

6. First impressions are important. Use attractive photos to advertise the listing.

7. Your house must have curb appeal. Make sure the outside is as attractive as the inside.

8. Keep your house clean and de-clutter before every open house and visit.

9. If the house isn’t selling, think about lowering the price. A house that sits too long on the market raises suspicion for buyers.

10. Take the first offer seriously. It’s often the best.

Residential sales in July were 1,441 up 3.6% compared to the same time last year. Residential listing activity dropped slightly in July to 3,038 units; down 210 units from June but up 193 units from the same time last year. The inventory of homes on the Multiple Listing Service® is quickly approaching par from last year at 8,421 properties available as of July 31.

“Our local housing market is quite healthy with affordable prices, a good inventory and strong sales,” said REALTORS® Association of Edmonton President Chris Mooney. “The selection of properties on the market for buyers is excellent. With employment opportunities popping up throughout the region and interest rates being very attractive, now is a good time to purchase a property in Edmonton.”

The average* price of a single family detached home in July was $384,656 with a median price of $360,000. Condo average price was $244,225 with a median of $223,000. Duplex and rowhouse prices rose on average from $296,969 to $309,816, a 4.3% increase.

“The increase in housing prices is on track with our January forecast and as we move into fall, we don’t see prices increasing substantially,” said Mooney.

The average days-on-market in July was 51 days: the same as in July 2010. The residential sales-to-listing ratio was 47% in July and total MLS® System sales were over $3.887 billion for the year so far.

Highlights of MLS® System activity

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* 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. For information on a specific area, contact your local REALTOR®.

Part of your Realtor’s job is to find that sweet spot for you. They will come to you with a number that represents the value of your home. If they have done things correctly, it will be a price that will bring the most potential buyers while still netting you as much as possible from the sale.

The question here is: How does a Realtor determine that number? How do they calculate the true market value of a house? Below is a general process used by Realtors all over North America to calculate the current market value of a home. (Note, this is not for calculating replacement value, which is of more interest to insurance companies)

 Step 1: Collect Data

Your Realtor will collect information on houses that are similar to yours in your neighborhood or similar neighborhoods. They will probably go back a few months depending on the number of homes that have been listed and sold.

They will look at:

Active listings. These are your direct competitors.

Expired listings. Houses that failed to sell.

Sold listings. The strongest indicator of true market value.

This will paint a good picture of what people are trying to get for their homes, what prices are not being accepted by the market and, most importantly, what buyers are paying for houses similar to yours.

Step 2: Adjust for Time

The real estate market fluctuates quickly and those fluctuations must be accounted for. If a home identical to yours sold 3 months ago for $400,000, that does not mean it is worth $400,000 today. If the market has increased or decreased in your neighborhood, your house will have fluctuated with it. Therefore, your Realtor must determine what fluctuations have taken place and adjust the price of each comparable accordingly. That brings the data into today’s dollars.

Step 3: Adjust for Features and Condition

This is usually the trickiest part. Each part of the houses must be adjusted for against the comparables that were found in step one.

Things like the location within the neighborhood, size of the garage, number of bathrooms, square footage, yard size, basement development and so on must be broken down into dollar values and adjusted. Your Realtor will need to know how much each feature is worth in the eyes of a buyer in order to price your house correctly against your competition and in light of the properties that have sold.

The same must then be done for the condition of the property. Price must be adjusted for any renovations that have been done and renovations that need to be done. Again, the idea is to adjust the price against the comparables in order to find the true market value.

After all of this, a number can be calculated that will show the highest amount of money buyers will realistically be willing to spend on the property in light of the current market.

Yes, it is a lot of work. Even for Realtors like me that have been doing it for years, this can amount to several hours of work. The good news is most Realtors are willing to do a market analysis as a free service.

If you need to know the value of your home, feel free to contact me and I will calculate the market value for you. If you live somewhere that I do not work, I can help you find a reputable Realtor who can calculate it for you.

• Statistics Canada reported that Alberta boasted the highest spike in population in the first quarter with a 0.4% increase.
• The Conference Board of Canada predicts that housing prices in Edmonton will increase from five to seven percent in the short term although local prices are currently down when compared to last year.
• Although the Bank of Canada seems reluctant to raise interest rates because of the negative impact on exports, CMHC reports that Canadians are budgeting for an interest rate hike.
• While housing prices nationally are up by 8.6% (May figures) Edmonton prices are tracking predictably in a stable market.
• CIBC is of the opinion that Alberta home prices are over-valued by 17% yet RBC names Edmonton amongst the most affordable major metro markets in Canada.
• A report by Peters and Co. forecast that $180 billion will be spent on new oilsands projects in the next decade with current oilsands operations and maintenance adding another $30 billion a year.

“The various reports and indicators can be confusing and contradictory,” said REALTORS® Association of Edmonton President Chris Mooney. “Alberta and Edmonton are often moving in a different direction than the rest of the country and a national statistic or trend may not apply here. REALTORS® are very optimistic about the current market and are prepared to help home buyers and sellers sort through the figures to determine the best housing strategy for each individual or family.”

In the first half of the year the average* price of a single family detached home has risen from $357,540 to $379,409 while the all-residential price has risen from $308,497 to $330,297. However compared to the same-month year-over-year, prices have risen consistently between the levels set in the past two years.

In the short term, when compared to the previous month, prices in June were generally stable. Single family homes were up 0.31% from $378,239 to $379,409. Condo prices dropped from $239,782 to $231,852 (down 3.3% after rising 3.1% in May). Duplex and row house prices climbed slightly from $295,334 to $296,689. The all-residential average price dipped 0.5% during the month of June.

There were 1,768 residential sales in June with 3,260 listings resulting in a sales-to-listing ratio of 54%. This is compared to 53% in May. There are currently 8,432 residential properties in the MLS® System inventory and days-on-market is slower at 53 days (up from 50 in May).

“We know that all real estate is local and homeowners and buyers should focus on local data and local expertise to guide their decisions,” said Mooney. “Is it a good time to buy a home in Edmonton? If your domestic needs have changed and you need to move, then seek professional advice and start the process.”

Highlights of MLS® System activity

“Local market housing sales this year are tracking as we forecast in January,” explained REALTORS® Association of Edmonton President Chris Mooney. “Historically for the month of May, the days-on-market (50 days) is at the second lowest point in four years while the sales-to-listing ratio at 53% is at the second highest point in the same period. Both metrics are a good indication of market optimism.”

The average* price of a single family detached home in May was $380,545, up a quarter of a percent from last month. An average priced condo sold for $241,079, up an amazing 3.65% from April. Duplex and row house prices declined 2.96% month-over-month but the average residential price (including all types of residential properties) was up 1.39% from a month ago.

Median prices in most housing categories were up: SFD up 1.13%, condo up 3.64%, Duplex/row house down 2% and all residential up 0.8%. There were 1,857 residential sales in May (up 24.9% from April) with listings of 3,525 properties (up from 3,278 in April). As a result, inventory increased from 7,715 properties to 8,180.

“There is a wide range of property on the market right now but it is turning over quicker than in recent months,” said Mooney. “The local economy is picking up, the demand for labour is increasing but the national situation is keeping interest rates low. We anticipate increasing prices and sales through the summer ahead as we originally forecast.”

Total Edmonton and area MLS® System sales in May were $701 million for an annual total-to-date of $2.574 billion.

Highlights of MLS® System activity

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* 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. For information on a specific area, contact your local REALTOR®.