House or Condo? Which to choose?

The most active price range in the Edmonton real estate market right now is the $250,000 to $350,000 bracket. If you are buying in this price range, you will find that you have a choice between the mid to upper end of the condo/townhouse market and the mid to lower end of the house market. The question becomes, do you want a house or a condo/townhouse? My answer is: It depends on your personality and lifestyle.

Chose a condo/townhouse if:

1. You don’t enjoy yard work or fixing stuff – As a condo/townhouse owner, you are only responsible for maintaining the interior of your home. The condo board is responsible for the exterior. If you are buying a condo or townhouse at the upper end of this range, there shouldn’t be much to worry about fixing in the unit. You will be getting into a fairly new or renovated place. If you don’t like shoveling walks, mowing lawns and pruning trees, you will love the condo/townhouse life as that is usually taken care of by the condo board.
2. You don’t mind paying for someone else to take care of things – There will be condo fees involved with owning a condo. These fees go to maintaining the building(s) and the grounds that surround it. Someone else will be making the decisions, hiring contractors and doing the work. You just have to pay the fee each month. Easy Peasy.

Chose a house if:

1. You don’t mind doing some work – If you buy a house in this price range, expect to have to give it some TLC. If you enjoy painting, fixing etc. This is perfect for you. You could take a dated property and make it completely your own with your creativity and work. This often leads to increasing the value of your home as well.
2. You like having control – In house, there is no condo board to decide when to fix what or to set rules for what you can and can’t do. If you like to be in control of what you own, you will probably appreciate that fact. You won’t have condo fees to pay, but any repairs will be out of your pocket (but you get to decide how much and when)

Basically the idea is this: If you are a hands on kind of person, grab that house that needs some work and dig in to make it a lovely home. If you are the hands off type that wants to move in and enjoy with no fuss, snap up a new or renovated condo or townhouse. These ideas will keep you in the $250,000-$350,000 range and keep you happy with what you buy. Happy house hunting!

 

Perfect Time To Invest in the Edmonton Real Estate Market

The Edmonton real estate market has been through a lot in the last few years. The current situation is rough for most homeowners as prices seem to have stagnated and there are a ton of listings available to buyers, who seem to be few and far between. There is a huge opportunity for investors though!

 Just a quick look at available listings this morning revealed over 700 condos for sale under $200,000, over 300 under $150,000 and very surprisingly about 50 under $100,000!

 With interest rates as low as they are, the opportunity is perfect. It is not hard to find a condo that can be purchased and then rented out at a rate that more than covers the cost of holding the property. That means that equity grows in the property while someone takes care of all the costs for you.

 For example: there are several 2 bedroom apartments available in the downtown area for about $150,000. You would need a 15% down payment ($22,500) which would mean you borrow $127,500. Assume a 30 year amortization and 4.5% interest for a mortgage payment of $646 /month. Add in a condo fee of $250 /month and taxes of approximately $100 /month. For a total holding cost of $996 per month. These 2 bedroom condos downtown are renting for between $1100 and $1300 per month! That even leaves you extra funds for the odd unexpected repair.

 Now, let’s assume that the Edmonton market does not skyrocket again. Let’s assume modest gains on the average of 8% per year for the next 5 years. After those 5 years, your condo would be worth about $220,000 for a $70,000 gain.  Now, considering the only money you have used of your own was the down payment of $22,500 you have seen a gain of about 210% over 5 years because of the joys of compound interest! That is pretty darn good!

 The market is perfect for the investor looking to hold a property for mid to long term gain.

 Don’t miss out. Feel free to contact me at CliffRemax@Gmail.com if you would like more details.

High Real Estate Inventory in Edmonton

REALTORS® report normal client activity in the Edmonton real estate market with listings, showings and sales. The residential inventory is approaching record levels set in 2007 but prices held steady in the second quarter with the expectation that they will soften as usual through the fall and early winter.

“There was less external pressure on the market from incentives or rate changes last month and as a result the market seems to be operating in a normal controlled manner,” said Larry Westergard, president of the REALTORS® Association of Edmonton. “It has been quiet on the news front but very busy in REALTORS® offices as they list client’s properties for sale, book showings for buyers and attend open houses. This has not resulted in immediate sales, however, and, in anticipation that this slowdown will continue through the year, we have reduced our 2010 sales forecast by 2,000 units from 21,000 to just 19,000.”

The slight rise in prices for single family residences in the Edmonton area in May continued in June. SFD prices are up to $391,497 – an increase of half a percent. In the first half of the year average prices are up over 7.5% and are tracking higher than 2009. Condominium prices peaked in April and then flattened out to match the prices reported in 2009. In June the average condo sold for $242,644 – down 2.4% month-over-month. Duplex and rowhouse prices of $306,905 were down 4.6% from last month. Overall, the average residential price was down $4,795 in a month. As usual prices are expected to soften in the second half of the year as sales activity slows. “With the increased choices that buyers have in the marketplace right now it is that much more imperative that sellers consult with their REALTOR® to make sure their property is priced to attract an offer,” said Westergard.

There were 9,406 residential properties in inventory at the end of June as a result of 3,473 new residential listings and sales of 1,539 properties. The sales-to-listing ratio was 44%. The average days-on-market was up at 47 days. The record inventory levels were set in September 2007 at 9,913 residential properties available through the Edmonton MLS® System.

“External influences pulled sales activity into the first four months of the year which reduced the demand in May and June. Overall there were 680 less residential sales in the first half of the year as compared to 2009,” said Westergard. “Consumers still seem interested in getting into the housing market or moving up but seem to be resting after a confusing period of uncertainty and change in the conditions that surround a property purchase.” He emphasised that despite seasonal changes the local market is stabilizing and operating in a normal manner. “The frenetic days of the past few years look to be behind us now and it appears that the more calm, cool and collected market that we are used to in Edmonton is on the horizon”.

June 2010 activity	Record for the month*	% change from June 2009
Total MLS® System sales this month	1741	-36.50%
Value of total MLS® System sales – month	$591 million	-35.80%
Value of total MLS® System sales – year	$3.4 billion	-2.60%
Residential¹ sales this month	1539	-37.10%
Residential average price	$335,397	2.03%
SFD² average selling price – month	$391,497	5.72%
SFD median³ selling price	$359,000	2.57%
Condo average selling price	$242,644	-2.05%

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 prices, which may vary.

Tips for Buying a New Condo

If you are purchasing a condominium in a building that is being developed, you might want to think about marketing strategies that could leave you upset upon moving in. The following tips are summarized from a recent article in The Globe and Mail called, “10 things to check before you sign on the line.”

First, knowledge is power. Be leery of developers not offering any and all information, such as how much the condo will cost in full and what the neighbourhood around the condo will really look like. Furthermore, visit a completed development by the developer to see what the quality of the building is like and if the current owners’ needs were met when they moved in or if there were surprises. Remember, marketing is marketing and a photo of a couple barbecuing on their balcony in an ad might not be a reality for you in the new building. Be sure to ask about details that are important to you and  review the fine print in the contract to ensure you know what you are getting.

Show suites may be a little deceptive too.

Often times the show suite is larger than the actual suite you will be purchasing and little things are done to make it look bigger. For instance, show suites often don’t have ceilings to create an airier feel – check for a line on the wall to indicate where the actual ceiling would be. Another tactic is using smaller furniture in a show suite to make the rooms look larger. Finally, in show suites upgraded options are often showcased and the standard options, while nice , tey may not be what you are actually getting.

Final advice: check the contract thoroughly and don’t assume anything. What you see may not be what you get when it comes to purchasing a new property.

Edmonton Real Estate Market Stable Through February

Prices for residential property sold through the Edmonton Multiple Listing Service® changed marginally through February. Sales activity, however, was up dramatically when compared to last month or the same month last year. The average* single family dwelling price was $369,573 for February up just 1.4% from January; 5.6% from a year ago. Condominium prices dipped 3.8% in the month from $240,686 to $231,530. Duplex and rowhouse prices were up 3.3% to $315,390. “While prices remained stable through February the increase in sales activity indicates that there is a demand for housing in the Edmonton area,” said Larry Westergard, president of the REALTORS® Association of Edmonton. “Listings also increased in February leading to a bigger month end inventory of homes and relaxing concerns that inventory may be too low to handle the spring buying season.” In February, housing sales were up 33.9% compared to January with 1,184 residential sales. Total residential sales were also up 7.6% from last February. There were 2,505 residential listings added during the month resulting in a 47% sales-to-listing ratio and a month-end inventory of 5,449 homes. The average days-on-market was down 10 to just 47 days. Total sales through the Edmonton MLS® System (including residential, commercial and rural properties) in February were valued at $416 million (up 10.5% from last year). “The upcoming changes to mortgage qualification rules and impending mortgage rate increases may prompt some buyers to enter the market earlier and cause some additional slowdown in the third quarter,” said Westergard. “As usual, REALTORS® will be challenged to be a voice of reason in the real estate transaction and work to meet the needs of their eager clients without putting their financial health at risk.” A new and improved MLS® System statistics package is available to consumers at www.ereb.com with year-to-year comparisons and expanded reporting of the condominium market and new sub-market reports. The public will also find median prices in addition to the typical average price statistics.

More statistics available at www.CliffTurner.ca

How Much Value Will Your Renos Add To Your Home

A question I am often asked is how much certain renovations will add to the value of a home. Here is a report that breaks down several common renovations and explains how much value they will add.

RenovationGuide-2009

If you would like to know exactly what your home is worth just send me an e-mail. Cliff@CliffTurner.ca

Provided by www.CliffTurner.ca

Edmonton Condos…A Tip to Help Predict Price Movement

Today I was looking back at how prices have fluctuated in Edmonton over the last 3 years. The market here has gone through a bit of a roller coaster ride through 2007, 2008 and 2009 and I wanted to see what I could leard from it.

One thing that I noticed is that there seems to be a trend in when different housing styles reacted to the market conditions. For example, the average price for single family homes peaked at $426, 028 in May of 2007. Then 2 months later (July 2007), apartment style condo’s peaked at $271,908. In October 2007 (3 months later) townhouses and duplexes peaked at $367,964. Later on, in December of 2008, single family homes hit the lowest point of the price correction at $351,870. Then in February of 2009 (2 months later, just like during the peaking trend) condo’s hit their low point of $226,857. Then came the townhouses and duplexes in March of 2009 hitting their low of $276,776.

So in both cases single family houses made their mark first followed by apartment style condos and then townhouses/duplexes. No trend is guaranteed to repeat itself but it might be something to think about if you own or want to purchase a condo, townhouse or duplex. Watch the single family homoe market for hints as to where thinsg will go.

For more info and stats please visit www.CliffTurner.ca or e-mail me at Cliff@CliffTurner.ca

Cliff’s Notes on Condo Fees

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When you purchase a condo you will have to commit to paying the condo fee associated with the property. What is included in this fee varies among condo projects but here are some of the common ones.

Insurance – An insurance policy will exist for the actual structure and grounds. It will be in the name of the condo corporation but each individual will have to contribute their share of the premium.

Reserve Fund – A balance of money that is kept on hand for large repairs or maintenance issues.

Management Fee – Many condo boards employ a professional management company to take care of the business of the condo corporation. As with any service provider, they come with a fee.

Maintenance – Part of the condo fee will pay for someone to look after cutting the lawn, shoveling the walks, tending to the garden, cleaning the hallways and performing routine maintenance.

Amenities – Many condos have a pool, recreation room or something similar that must be maintained. Others will have an agreement with a nearby gym or other facility. Again, these things are paid for by the condo corporation with each unit owner putting in their share.

Utilities – Some buildings will have common heat, water and or electrical system. That means that one large bill comes to the condo board for each utility. Again, it is divided up among the unit owners. (Not all buildings do this; some do have individual utility services set up. That would mean each owner receiving an individual bill each month apart from the condo fee.)

Other items may be included beyond this list in certain buildings.

When you look at the amount of the condo fee be sure to find out what exactly is included in it and determine if the services justify the fee. If you were buying a house you would have maintenance and service fees that would add up. If you are buying a condo they will all come as one bill, your condo fee. Be sure you know what you are paying for.

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