INNER CITY HOUSING MARKET LEADS IN SALES

Calgary, June 1, 2011 – According to figures released today by CREB® (Calgary Real Estate Board), year-to-date residential sales in the inner city grew nearly 4 per cent, outperforming the city wide average. City of Calgary residential sales totaled 1,816 in May 2011, a 2 per cent increase in volume over May 2010. However, slower early spring sales resulted in the overall year-to-date sales being 3 per cent lower than the 2010 spring market.

As the city grows, improvements in the inner city communities are consistent with changing preferences in lifestyle options.

“Consumers are looking for shorter commute times to work and easy access to a wider range of services provided by these inner city communities,” says Sano Stante, president of CREB®.

“Many of these communities are surrounded by abundant amenities such as parks, mature trees, diverse shopping and transit which appeals to a wide range of consumers; furthermore, inner city homes can be considered a stable real estate investment, as there is significant value in land located near the city’s core.”

The average price for single family homes in May 2011 was $489,482 and the median price $423,000, comparable to levels recorded last year. Single family home sales were 1,313 in May 2011, a 5 per cent increase over last year, while 2,552 listings came to market, a 14 per cent decline over the same period last year.

The decline in listings has caused inventory levels to come down to 4,616 units, an 18 per cent decline from last year. Moderate sales and a reduction in inventory have resulted in a decline in months of supply compared to May 2010.

To date, the single family market has fared better than the condominium market, as prices have come down from peak levels recorded in 2007 providing individuals more options with regard to home ownership, noted Stante. After the first five months of the year, single family home sales were 5,835 units, consistent with sales levels during the same time frame last year.

“With just under four months supply, we expect single family home prices to remain stable in the coming months,” says Stante. “Provided that interest rates remain moderated, we are positive about the near term stability and recovery in the Calgary real estate market.”

“While condominiums continue to experience some decline in sales and prices, the rate of decline seems to be easing, indicating signs of improvement in this market” adds Stante.

The inventory of condominiums continues to remain higher than average, but has declined by 21 per cent from levels recorded in May 2010.

Condominium sales were 503 for May 2011, 3 per cent lower than last year’s figures. Year-to-date condominium sales are 11 per cent lower than last year’s levels, however, listings have declined by 19 per cent as well over the same time frame, placing downward pressure on inventories.

“Full time employment growth has been sluggish in Calgary, with only notable improvements occurring in April,” says Stante. “All indications point to the trend that as full-time employment growth takes hold in the later portion of the year, so too will improvements in migration, ultimately translating into improvements in the housing market.

Condition of Property at Possession

One of the most common and frustrating issues for both real estate industry members and lawyers in closing residential real estate transactions is a dispute over the condition of the property on Completion Day. Rarely are buyers entirely happy with the condition and cleanliness of the property when they take possession. While occasionally their concerns are valid, in most cases they are not. In any event, there is not much that lawyers can do to assist buyers in this regard. This column will explain why the Purchase Contract is worded the way it is and what buyers’ representatives can do to protect their clients where specific concerns are identified when writing up the offer.

The condition of the property is addressed in clause 4.2 of the Residential Real Estate Purchase Contract (the “Contract”) as follows;

“When the Buyer obtains possession, the Property will be in substantially the same condition as it was in when this Contract was accepted.”

In addition, clauses 6.1(b) and 6.2 of the Contract require that when possession is granted, all included Attached Goods (fixtures) and Unattached Goods (chattels) be “in normal working order”.

So what does this really mean?

In general, and unless additional terms are inserted in clause 7.6 of the Contract, it means that with the exception of appliances (which have to work), the seller doesn’t have to clean up or repair the property in any way for the buyer. In fact, the words “substantially same condition” imply that some deterioration resulting from normal wear and tear, and the scrapes and blemishes resulting from the moving out process, are acceptable. The seller is certainly not required to paint walls, clean carpets or fix small holes in walls where pictures have been removed.

Even if, contrary to the terms of the Contract, an appliance doesn’t work or more significant damage (such as a broken window) constituting a breach of the “substantially the same condition” obligation is discovered on possession day, the buyer’s lawyer may not be able to refuse to close or otherwise secure compensation for the buyer. In general, the buyer is only entitled to refuse to close if the damage to the property is so major that it would constitute a “material” breach of the agreement. In this case, it is important that the buyer or the buyer’s representative bring these issues to the attention of the buyer’s lawyer quickly. The buyer’s lawyer will communicate the matter to the seller’s lawyer, which will result in one of two possible outcomes:

1. The seller’s lawyer may be able to convince the seller to offer some compensation to the buyer, repair the problem or agree to a monetary holdback until the problem is resolved; or
2. The seller will refuse to take responsibility for the problem, but at least it will be documented that the problem existed at the time of possession which will help the buyers if they choose to prosecute a small claims action for recovery of damages.

Because the problem of not being able to force the issue when the condition of the property is not “substantially the same”, industry members sometimes suggest that a default holdback provision be incorporated in the standard Contract to routinely allow buyers to withhold a predetermined sum (such as $1,000 for example) until the condition of the property is found to be satisfactory. This is not, unfortunately, possible on a practical level. The inevitable result of this provision would be that, rightly or wrongly, buyers would take advantage of the holdback entitlement in almost all cases. Sellers would then have to accept the loss or be forced to sue buyers to receive their full sale proceeds.

Building an early walkthrough or condition inspection provision into the contract is also not a practical solution to the problem. Since damage to the property is only likely to occur when the seller is moving out or only apparent after the furniture is removed from the premises, a walkthrough conducted prior to the seller’s move is virtually useless. It should be mentioned that unless it is specifically written into the Contract, the buyer is not entitled to insist on access to the property in the period between the removal of conditions and possession day.

Although the current Contract could, as a result, appear to be biased in favour of sellers receiving their money from the sale, I always point out to unhappy buyers that the same Contract will protect them for their sale proceeds when it comes time to sell their home in the future.

In cases where a buyer wants the seller to carry out a specific task prior to possession, such as the shampooing of carpets, the removal of car parts from the backyard, or a specific repair to the property, the buyer’s representative has to insert specific additional terms into the Contract in clause 7.6. To be effective, such terms should contain: a firm deadline; a monetary holdback provision if the work is to be completed post closing or an inspection provision if the work is to be done prior to closing; and a term setting out the consequences if the work is not carried out as required.

Courtesy of AREA

Big Ideas

Whether you are looking to sell right away or in a few years, there are several sound renovation investments that are worth the money, according to HGTV real estate expert Heather Unger, a Sales Associate with RE/MAX Central Realty in Lake Mary, Fla.

Here are some tips for potential sellers:

Rev up curb appeal – A green lawn and fresh exterior paint are sure ways to attract potential buyers. Plant colorful flowers or hang flower boxes from windows, repair cracked walkways and choose a neutral, pleasing exterior color to maximize your home’s appeal.

Upgrade the kitchen – This is where you’ll get the best return on your investment. Buyers want granite countertops, stainless steel appliances, modern cabinets and hardware, and updated light fixtures. Think IKEA kitchen: modern and functional. For the average kitchen in a 2,000-square-foot home, you’ll spend $8,000 or more for basic upgrades.

Redo the bathrooms – After kitchens, bathrooms are the next places to get the best bang for your buck. Granite countertops, modern faucets and light fixtures and tile floors are popular with buyers. The more you can do yourself, the more money you’ll save. Expect to spend about $3,000 or more. You can save even more by buying store floor models for sinks and vanities, or going to granite bone yards for materials.

Add space – If you have the money, consider adding square footage to your home by finishing your basement, expanding the master closet or knocking down some walls to create a more open floor plan.

Economical options

If you don’t have time or a ton of money for major renovations, don’t worry, says Laura Smith, a Sales Associate with RE/MAX First in Baton Rouge, La. A clean, clutter-free home goes a long way for many buyers, says Smith, who has appeared on HGTV’s "Bang for Your Buck."

Here are Smith’s tips:

Make your home smell incredible – Get your air-conditioning unit professionally serviced and cleaned. Most companies charge under $150, and it goes a long way in removing household odors and allergens. Also, use plug-in fresheners and fabric deodorizing sprays.

Steam-clean the carpets – Instead of replacing carpets, call a professional to have them steam-cleaned and watch the transformation! You will be delighted to see that steam cleaning the carpets (price depends on carpet area) is money well spent.

Remove clutter – Check your closets and donate old clothes, shoes or other items that you haven’t used in the past year. Buyers want to see storage space; this goes for the other closets in your home, as well as garages. If you’re having showings, remove all personal photos and clear off all appliances and knickknacks from countertops and display shelving.

Create an outdoor living space – Adding a sense of comfort to your patio, deck or backyard adds value to your home. Stage your patio or deck with a table and chairs, as well as an outdoor rug, lively plants, some colorful flowers or a small fountain. Get rid of unsightly weeds and keep the lawn mowed and presentable.

Good luck,

Top 7 Landscaping Tips to Sell your Home

Its that time of year again. Spring is in the air and all the long awaited listings are hitting the market. If you are thinking about selling your home this spring, please read on.

Before buyers will take the time to look inside your house they need to be impressed by what they see on the outside. If you live in a condominium ownership community or can't control your landscaping then you will need to work on sprucing up the inside to make your home stand out. For everyone else, read on to see how you can dazzle buyers with nature.

Add or touch up the walkway to your front door.

If you have a pre-existing walkway leading to your front door then you're already one step ahead of competing homes. Fill in any cracks, popping up bricks and other potential nuisances that could cause buyers to walk away. Adding a walkway is a great way to give your front yard some structure and the types of materials you can use are endless. Don't get too crazy spending money though since the return on investment for a walkway is limited.

Plant flowers along both sides of your walkway.

Just as important as having a path to your home is a well manicured set of flowers leading the way. Flowers not only pack a colorful punch but they'll show home buyers that you care about your home by remembering the little things.

Remove seasonal signage and decoration.

When you put your home on the market you want to appeal to buyers of all styles. Part of this is removing personalized decorations from the front of your home. Yes we all love jolly Saint Nick, but he is cluttering up the front lawn.

Add flower boxes to your windows or deck.

Plants tend to evoke the idea of life and growth so strategically adding flower boxes to your deck, balcony or windows will pull that positive energy into the space.

Re-shape aging stone walls.

After 10-15 years many retaining walls tend to develop sink spots where the wall has loosened. Check up on all of your retaining walls and reshape them to make your landscaping look like new.

Add items with character to your landscaping.

Landscaping doesn't just have to be flowers and green plants! Find an old wagon wheel, nostalgic signage or bird fountain and add it to your greenery. Bird fountains are especially useful because they attract beautiful birds of all different types. But keep in mind there is such a thing as too much character.

Trim trees and tall plants to prevent excessive window blocking.

Privacy is very desirable and so we sometimes let trees and plants overgrow in front of a commonly used room in the house to gain more privacy. Unfortunately buyers will find overgrown plants to be a sign of deferred maintenance around the house. In today's market a sign of deferred maintenance can be a kiss of death for the sale of your home.

Courtesy of Joshua Ferris.

Secondary suites allowed in all new Calgary communities.

A motion passed by council Monday means that homeowners will be able to purchase new residences already knowing their neighbourhood could be built with secondary suites.

Existing homes and zoning that do not allow secondary suites will remain untouched.

Ald. Peter Demong was applauded by Mayor Naheed Nenshi for putting forward this compromise to the previous and contentious proposal to legalize secondary suites in all residential zones.

Demong did not believe the Nenshi’s plan for citywide suite reform was fair because many homeowners had bought their residences on the grounds that their community didn’t have secondary suites.

While some aldermen believe this decision was a step in the wrong direction because it could reduce property value and the number of multi-family dwellings in Calgary, David Watson, the city’s general manager of planning, said this change will give homebuyers more options.

Ald. Druh Farrell agrees, noting she doesn’t see the allowance of secondary suites as a limitation.

“It just offers people some opportunity when they’re trying to get into the housing market,”said Farrell. “Very few of these are built. They’re built on an opportunity basis when the homeowner sees an advantage.”

Farrell added that a range of groups from the Chamber of Commerce to the developers’ association have actually stepped forward and urged secondary suites be legalized in all city residential zones.

“We received a joint submission from Urban Development Institute and the (Canadian) Home Builders Association on February 18, exactly two months ago, stating that they believed that Calgarians need access to safe, affordable housing,” said Nenshi. “They believe in rental accommodation and they strongly believe in making every single house in the city have secondary suites.”



Read more @ Calgary Herald

Federal leaders not addressing Realtors needs.

By Shane Buckingham
CRE Senior Staff Writer

Realtors’ federal lobbying efforts came to an abrupt stop when the federal election was called on March 26, and according to industry insiders so did the parties’ focus on Realtors’ concerns.

Three key issues Realtors have been fighting for, Manitoba Real Estate Association (MREA) President Lorne Weiss said, are getting a capital-gains-tax rollover for commercial properties, raising the amount first-time homebuyers can borrow from their Registered Retirement Savings Plans (RRSPs) and requiring lenders to provide better disclosure to homeowners about the costs of ending a mortgage early.

But so far all three of those issues haven’t gotten much play among federal politicians.

“We think the federal parties should be addressing our issues because they aren’t just specific to our industry,” Weiss told CRE Online. “Something like giving young people the ability to borrow more from their RRSPs to buy their first home doesn’t just apply to the real estate industry; it really applies to the economy as a whole.”

In 2009, the federal government adopted a policy proposal by the Canadian Real Estate Association (CREA) to increase the limit first-time homebuyers can withdraw from their RRSPs to purchase a property from $20,000 to $25,000. Now, Weiss said the organization wants the federal government to index that amount to inflation.

“Rather than having to go back to the federal government every four or five years, we would like to put a mechanism in place to have the amount indexed to the rate of inflation, just in the same way a pension is. We feel that would make RRSPs a more effective tool for first-time homebuyers,” said Weiss, the former chair of the CREA Federal Affairs Committee.

Give investors a break

Next, Weiss said the federal government should give property investors a year to reinvest their capital gains into another property before it’s taxed.

“We think that allowing a capital gains rollover for commercial properties will give investors more incentive to provide affordable rental units, something this country sorely needs. It will also allow more ma-and-pop-type investors to expand their portfolios,” he said. “And the money will be eventually taxed once investors cash out of their properties.”

Lastly, he said there needs to be better disclosure explaining the penalties homeowners will incur if they end their mortgage early.

Now, since there is no disclosure requirement many homeowners have been blindsided with bills in excess of $10,000 to break their mortgage. And how the banks actually arrive at the amount of the penalty has many Realtors confused, he added.

“When people go to sell their home and buy another one they find out the penalties for early discharge of their mortgage are humongous. So what we’d like to see is greater disclosure on mortgage documents, clearly stating what the penalties will be for early discharge of a mortgage and how those penalties are determined.”

As Realtors prepare to go to Parliament Hill to discuss policy on May 8 to 10, their lobbying efforts have been left in limbo since the fate of the current government is in question.

Pierre Leduc, a spokesperson for CREA, said that the organization was caught off guard like the rest of the Canadians when the election was called. Since the Realtors’ event was already scheduled, he said the organization chose to go ahead with it, but is still determining the nature of the event.



Complete article here.

Calgary Real Estate 1st Quarter 2011 Update

Calgary, April 1, 2011 – According to figures released today by CREB® (Calgary Real Estate Board), Calgary Metro sales remained at levels similar to the first quarter of 2010. Improved sales in the single family market have largely been offset by declining sales in the condominium market, indicating that the gradual recovery will continue to be driven by the single family market for the better portion of the year.

Single family home sales in the first quarter of 2011 were 3,309, a 4 per cent increase over the first quarter of 2010. The combination of stable home prices, low interest rates and year-over-year improvements in employment are the primary factors fueling the growth.

March 2011 single family home sales totaled 1,355, a 3 per cent decrease over March 2010 figures. The decline in sales was accompanied by a 19 per cent year-over-year decline in new listings. As a result, inventory remained at three months, which indicates a balanced single family market.

The NW sector boasted the largest gains in single family home sales in the first quarter of 2011 with 1,198 sales, a 13 per cent increase over the first quarter of 2010. Sales in the SE posted quarterly gains of 5 per cent, while the SW remained relatively unchanged and NE sales declined by 9 per cent.

“Improved affordability levels in single family homes have offered some individuals the opportunity to purchase homes in areas of the city that were once unattainable,” says Sano Stante, president of CREB®.

The SW sector recorded the highest single family average home price in the first quarter of 2011 at $570,748, while average home prices in the NW and SE were $464,990 and $422,821 respectively. The NE sector continues to remain the most affordable, with average prices hovering around $282,713.

“Average single family home prices remain relatively stable compared to the first quarter of last year, as people continue to purchase more homes at the lower end of the price spectrum,” says Stante. “The rise in sales has been primarily offset by a corresponding increase in listings, resulting in stable average prices.”

Calgary Metro average price of single family homes in March 2011 was $462,947, a 2 per cent decline from March 2010, and virtually unchanged from the previous month. Meanwhile, the median price declined by 5 per cent compared to March 2010.

Quarterly condominium sales continue to fall over levels recorded in the previous year, down by 11 per cent compared to the first quarter of 2010, while quarterly average prices are down by 1 per cent. It is important to note the quarterly average price of condominiums is skewed upwards for 2011 due to the sale of a $4.1 million condominium. If we remove this sale, quarterly average price would have declined by over 2 per cent.

The average price of condominiums in March 2011 was $280,781, while the median price was $256,000, a respected 5 per cent drop and 7 per cent, respectively, from levels recorded in March 2010.

Improved selection of affordable single family homes and higher inventory levels of new condominiums have reduced the demand for resale of condominiums. It is anticipated that demand should gradually recover in the latter half of the year, as Calgary’s economic recovery continues to take hold. “This provides a window of opportunity for condo buyers early in the year to discover a large selection of available product at affordable prices,” says Stante.

Calgary’s labour market has shown some recent improvements, however, it is still in the early stages of recovery as job growth remains below the 5-year average. Improvements in the energy sector are anticipated to show stronger job growth in the second half of the year, providing the foundation for continued recovery in the housing market.