Just a quick note that I discovered some information on rate increase today from a reliable source in the lending Industry. It looks like as predicted, mortgage rates will inch up further tomorrow, another example of tighter lening considerations that have progressed in the first quarter of 2011. It will be interesting to see what the after effects of this increase will be on the real estate front. Cautious buyers seem to be realizing that purchasing in a more balanced market is a safe bet over the long term, especially if you can lock up desireable mortgage terms. This increase should'nt have the same effect as the more substantial mortgage rule changes that initiated earlier this year but nonetheless will probably remain a very important consideration to prospective home buyers and will play a role in sales activity in the summer months. If you are thinking of purchasing anytime soon make your first step visiting with a mortgage professional for terms that would work best for your situation.

Have a great day!

-Asheton Coultman
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What do the new mortgage rule changes mean to homeowners and potential homeowners in Canada, and more specifically Calgary. First off it is important to understand what exactly has changed and how these changes will effect you. Here are the recent changes

1. LIMITED THE MAXIMUM AMORTIZATION PERIOD DOWN TO 30 YEARS

- This change is fairly straight forward, 5 years less to pay off the mortgage on your home (down from 35 years). Although this means less interest paid to the bank over the duration of your mortgage, it also means people looking to purchase will have tighter qualification requirements along with a slightly higher paymet.

2. LOWERED THE MAXIMUM REFINANCING AMOUNT TO 85% OF THE LOAN TO VALUE (DOWN FROM 90%)


- This change along with the reduction in amortization encourages homeowners to keep more equity in their homes, those refinancing will have to leave an additional 5% of the value in the form of equity in their home. To keep it simple, homeowners will not be able to pull as much equity out of their home when they refinance.

3. WITHDRAWEL OF GOVERNMENT BACKED NON AMORTIZING LINES OF CREDIT SECURED BY HOMES

- In the past these lines of credit are non-amortizing, meaning that the borrowers are not required to make regular payments on the principal amount of the loan. In addition these loans are almost exclusively variable rate products, which expose borrowers to the impact of rising interest rates. Many lenders now offer multiple loans or a multi-segment loan secured against a borrower’s home. If a loan or a segment of a multi-segment loan is in the form of a revolving line of credit that does not
amortize over time, it will no longer be eligible for government-backed insurance. However, with established scheduled principal and interest payments, a loan will continue to be eligible for government backed
insurance, provided it meets the underwriting standards set by the mortgage insurer. Withdrawing government insurance backing on these non-amortizing products is consistent with the Government’s objective of supporting the long-term stability of Canada’s housing market.



The adjustments to the maximum amortization period and the maximum refinancing amount will come
into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured
by homes will come into force on April 18, 2011.


For more thorough information on the changes, visit the Department of Finance Canada website at:
www.fin.gc.ca



If you are thinking of purchasing in the next few months and want to take advantage before these rules come into effect, follow this link for the FIRST STEPS YOUR SHOULD TAKE. http://www.calgaryrealtyteam.com/Blog.php/buying-in-2011-what-to-do-before-mortgage-rules-change-in-calgary
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If you are thinking of purchasing a home in 2011 you need to take some crucial steps to make qualifying easier for you and ensure that you get an excellent interest rate. IT WILL BE EASIER TO QUALIFY IN THE FIRST 3 MONTHS OF 2011.

1. GET A RATE HOLD THROUGH A LICENSED MORTGAGE BROKER


**Very important first step, this will lock in an interest rate for you lasting 120 days. This means if interest rates increase during this rate hold period (which is expected to take place), your rate will stay at the lower amount you locked in. Using a mortgage broker instead of a bank also provides you with a greater number of lending options. Getting a rate hold also COSTS YOU NOTHING!

2. GET AN IDEA OF WHATS OUT THERE


- Now is an excellent time for prospective buyers in Calgary, especially first time buyers. There is a high amount of inventory on the market, so start seeing what is available to you.

**If you want to take advantage of the extra 5 year amortization (35 years) before the rules change (March 18, 2011) and make qualifying easier for yourself, then look to placing an offer on a home before this date**

3. ACT AS QUICKLY AS YOU CAN


- This applies especially to getting a rate hold, once this is complete you will have some time (before March) to search for your perfect place. In real estate it is never wise to rush into a purchasing decision, that's why it is very important to start the process early so you can make informed decisions along the way


If you have any questions regarding the new mortgage rules or about purchasing a condo or single family home, feel free to contact me at 403 554 7779 or by email asheton@calgaryrealtyteam.com. and
GOOD LUCK!
Asheton Coultman
Realtor
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Many potential buyers have been sitting on the fence in the last few months speculating on home values, moreover waiting for prices to slide further. Last month 887 sinlge family homes sold in calgary and 309 condos sold in the same month. The stats for september single family sales were 957 with condo sales rounding off the month at 366, showing a slight drop month over month. some say this can be attributed to the expected December slow down that is a historic constant in real estate.

 It is hard to say how strong November stats will be this early, but estimates point to a continued reduction in successful transactions for the month. With this reduction in transactions paired with the still high number of active listings (2047 Conos, 4453 Sinlge family, as of Nov 12) now is a fantastic time to search a lot of inventory and be very particular with finding your dream home. With interest rates at a continued low, with increses expected in the new year, now is a great time to lock up a great home and a great rate.

Happy house hunting :)

-Asheton Coultman
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Yet another reason to strategically market your home for a successful sale can be found when considering the market inventory Calgary currently has. There are currently 7496 Active listings of Condo and Single Family Homes in the Calgary metro area. Out of these active listings 2571 are vacant. This accounts for a whopping 34% of total actives being vacant which definitely suggests there are a lot of home owners that NEED to sell. With this high a number of vacant properties it will be interesting to see how the market reacts in the comming months to lower offers from buyers looking to take advantage of a sellers known carrying costs.

With interest rates still quite low buyers are in a great position to pick and choose a good property for great value. Overpricing in this market especially taking this interesting statistic into account would not be in a sellers best interest.


Data compiled from the MLS service and is deemed reliable but not guaranteed
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I spoke with a good friend of mine recently who was looking into pursuing a home that was offering an assumable mortgage. He explained to me that this was the absolute best way to get into his first home without putting any money down. Just thought I’d make some suggestions on the topic as a result of that conversation.

Assumable mortgages offer an attractive option to anyone who doesn’t have enough money for a down payment on a home. There are some things to keep in mind when looking into the option of assuming a mortgage. One important consideration is the fact that you still must qualify for the mortgage, so all of the traditional factors come into play, income verification, credit check etc (which can still make this a difficult scenario). Also consider the interest rate on the mortgage, right now rates are tantalizingly low, so it may be beneficial to look into a new high ratio mortgage on a new property (depending on when the assumable mortgage was issued there rate may be a point or two higher).

There are alternatives to assumable mortgages with respect to putting zero down like seller financing or “seller take back mortgages”.

Before pursuing any assumable mortgage scenario speak with your licensed mortgage broker to get the details and discover if an assumable is the right option for you.

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Many people are already aware of the major multi-million dollar east village development project taking place east of city hall downtown. This project looks absolutely amazing and I will be taking it upon myself to provide updates on the construction progress as it happens. Demand for a cultural and social hotspot in Calgary has been growing tenaciously over the years and now Calgarian’s can look forward to a new fresh and hip area of the city to take advantage of. Check out this video to see the master plan, very cool.


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During the past months there has been a rise in the average time it takes from the time a property is listed to when it sells (DOM).  The average time it took to sell a single family home in August 2009 was 42 days while August 2010 was 50 days, showing a 16% increase in the time it takes to sell year over year. Single family sales for the same months respectively were 1275 units Aug 09 compared to 866 units for Aug 2010, showing a rounded 32% decrease year over year (keep in mind this number is a decrease in the number of solds, not price).

This isn’t exactly shocking news as inventory has increased since the same time period last year resulting in the heightened DOM for sold properties. With the end of the year slowly approaching and the infamous December slowdown in real estate activity coming with it, sellers should be thinking about pricing more effectively and ensuring their property shows as well as possible.

In this buyers market doing your due diligence as a seller and making sure your property stands out as soon as it hits the market will be an essential aspect to selling their home in the coming months.


This information deemed very reliable but not guaranteed

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I spoke with a client of mine who mentioned that prices have declined drastically from the same time last year based on an article he had read on the decline of the actual single family units sold. With respect to the 32% decrease in sold units year over year from Aug 09 to Aug 10, I think a little more information would be helpful for clarification.  In a recent post I spoke of the decline from Aug 09 year over year to Aug 10 from 1275 units down to 866 for the number of successful single family transactions.

Keep in mind this is simply that, the number of “units sold”, the actual average price of a Single family home in Aug 09 was $453,520 and for Aug 2010 Average SF price was $445,797 actually showing a very slight increase of 2% year over year. It is a very incremental increase, however it displays that although the number of sales is down, average SF price has remained stable. Keep in mind this is ONLY for August based on a year over year comparison.

This simply illustrates that a number of different factors need to be considered when analyzing the market to determine if now is a good time to buy/sell, or even just to ensure your getting the right information for your research. Newspapers tend to cite specific statistical data which can make it hard to decipher what has been occurring in the broader scope of the market.

Information herein deemed reliable but not guaranteed

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There are certainly no shortage of "For Sale by Owner" signs around the Calgary urban sprawl. Something I have noticed time and time again is the propensity of these home owners to make their own signage to advertise their listings. I would like it to be known that I am certainly not against someone trying to sell their home on their own, although I do feel strongly about the success rates of licensed realtors and the power of the MLS. However there are some very important considerations that should be kept in mind (namley signage).

I came across this again yesterday when driving past a neighborhood in the south west, where in the middle on an intersection was a cardboard sign with white poster paper on it. The sign was weather beaten and dirty with the information drawn on by hand. My immediate thought was, why wouldnt you prepare a clean and professional looking sign to advertise an asset that is worth at least $450,000 (given the area where the sign was).

My main point here is that even the small details can turn away potential buyers and professional looking signs that are clean and well maintained are an easy way to project an early positive image of the property before it is even viewed (consider product packaging). so if you are considering trying to list your home on your own, dont overlook something as simple as the sign you are using to advertise it.

-Asheton Coultman
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There is no doubt that in the last 5 years the internet has seen some major advancements namely in the area of social media. Whether its face book, Twitter, Stumble Upon, or websites like Dig.com, there is an overwhelming sense that the way we communicate not only personally but in business as well, is changing.  These sites offer an easier more effective way of staying in touch in a way reminiscent of the invention of the cell phone. Advancements like these, so amazing in their effectiveness and viral nature are forever changing how we do business and more specifically business in real estate. There are waves of people taking advantage of these medians to help boost home exposure and buyer receptiveness in the marketplace. Naturally the question of whether or not this booming trend is as effective as it’s cracked up to be arises, however in my own opinion I would say most certainly yes!

Real estate has always been about communicating, advertising and marketing and this new paradigm shift online is making it easier to do by the day. Utilizing these social media sites is an excellent way to get in touch passively to hundreds of thousands, heck even millions of people around the world who could potentially be the right match for a home you are trying to sell. On the other hand buyers now have even greater access to properties at the click of a button.

So what are the downsides to such marketing tactics, in my opinion it is hard to find a reasonable answer except for real estate agents and homeowners who are not taking advantage of it. Considering the way the last 2 years has been more creative and innovative ideas will always be a help, even if only a little. Whether its utilizing Youtube for video exposure of your property or advertising on Facebook to increase your homes exposure, this social media mindset needs to be taken advantage of for the simple fact that it’s not going anywhere (not to mention how effective it is).

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With the increased levels of listings in Calgary many buyers, especially first timers are being very cautious in their decisions to buy a home. With such high inventory the market has sided with buyers offering opportunities to pay less than list, which a recent Royal LePage survey helps confirm. This expectation, citing the survey, outlines that 71% of Albertan buyers expect to pay less than list price which is above the 65% of people nationally.

These numbers simply reinforce what many already know about the market situation in our city. With the reduced number of sales year-over-year and so much inventory sellers are going to have to be more in tune with their listings. Over pricing in a market like this will no doubt result in a long term “stagnant” listing, with buyers opting for more competitively priced homes. This is an obvious mistake and could result in a seller “chasing the market” so to speak with gradual price reductions which will only lessen their market exposure. The fact that only 26% of Albertans surveyed said they would pay asking price for a Calgary home offers insight for sellers and should prompt them to be very objective when listing.

If you are selling your home in this market an intuitive approach to the process will greatly increase your chances of selling. Overlooking minor repairs or anything else that could leave a negative impression (cluttered house, paint chips, scent of animals etc..) will only deter buyers who as we know, have no lack of product to choose from.

Highlighting all the best your home has to offer is paramount because the features and unique touches of a property are often times what sway a buyer to purchase a specific home. Highlight absolutely EVERYTHING that you have enjoyed about your property and make it easier for a buyer to want it more than your competitors. In short effective pricing, staging, and high exposure marketing should be a home owner’s main focus now more than ever to gain an edge over competing listings. The market will turn around and gain pace as it always has, but if you are selling your home, now is always better than later.

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In the Calgary real estate market buyers have a few options when deciding what type of property they would like to purchase. With each of these options there are pros and cons to living situation depending heavily on what type of lifestyle the buyer wants for themselves.  A single family home offers the highest privacy factor but also yields a high maintenance lifestyle, larger lawns to up keep, shoveling sidewalks and a responsibility for all repairs are some examples of what some home buyers just don’t want to deal with. Condos offer another avenue for the potential buyer offering a community based lifestyle with many neighbors and a lot less maintenance, yet still some purchasers avoid condos one reason is that owners have to be very cautious about noise pollution in their unit. Then we find the real estate mid ground, the townhome, townhomes offer many of the benefits of a home and condo wrapped into one. Some you own the lot and not just airspace as with a condo some have condo fees while others do not. Townhomes are versatile and offer a more private lifestyle than a traditional high rise condo but typically demand less maintenance than a detached home. There are many more reasons why townhomes are such a great option for home buyers and there are certainly some great aspects to selling a townhome as well. Calgary’s real estate market is saturated with high-rise condo units making a high-rise condo somewhat of a commodity, this leaves a very viable option open in the townhome sector. With fewer units and better curb appeal to some buyers, townhomes offer an excellent pairing for those buyers with particular taste. If you’re looking at purchasing a Condo, it would be wise to entertain a townhome as an option for your first home, or even your next home.

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Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.