Post(s) by Tazim Asaria

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Housing prices hold steady in surrounding areas

by CREB

Calgary, April. 17, 2015

Slower economic activity influenced demand across the region in the first quarter of 2015. However, despite rising inventory levels, housing prices in Calgary’s surrounding areas remained relatively stable.

“A lack of recovery in oil has many concerned about their employment status and these concerns have been impacting consumer confidence in the first quarter,” said CREB® chief economist Ann-Marie Lurie. “However, on aggregate, surrounding area prices have posted some quarterly growth as some of these areas have not recorded the same level of pull-back in sales relative to inventory levels.”

Unadjusted benchmark prices for residential properties in the surrounding areas were nearly one per cent above average levels recorded in the previous quarter and 8.4 per cent above levels recorded in the first quarter of 2014. City of Calgary prices have started to retract, but it is important to note that total residential benchmark prices in Calgary recovered from 2007 highs in 2013. In surrounding areas, prices only surpassed previous highs last year.

Residential sales in surrounding areas totaled 911 units in the first quarter of 2015, a 22.7 percent decline compared to the same time last year. Meanwhile, new listings increased by 11.6 per cent and inventories averaged 1,715 for the quarter, pushing the quarterly average months of inventory to 5.65.

“With improved first quarter supply in both the city of Calgary and the surrounding areas, consumers will definitely have more housing options,” said CREB® president Corinne Lyall. “Each of the surrounding areas has their own unique dynamic, so it’s really important to consider the community and specific segment of the market that you are buying or selling in when making any real estate decisions.”

Sales in Airdrie totaled 302 units in the first quarter of 2015, a 10.1 per cent decline relative to the same time last year. Over the same period, benchmark prices in Airdrie continued to increase in the first quarter. In fact, quarterly detached prices averaged $397,867 in the first quarter, which amounts to a 0.24 per cent increase over the previous quarter and a year-over-year increase of 8.4 per cent.

Cochrane had a similar experience where quarterly detached prices averaged $445,033 in the first quarter, a 2.6 per cent increase over the previous quarter and a year-over-year increase of 12.5 per cent. Meanwhile, first quarter sales totaled 116 units at the end of March, a 35 per cent decline over the same time last year.

“Cochrane’s resale sector often has a different dynamic than some of the other surrounding areas as there is a larger share of new home sales representing total sales activity,” said Lurie. “After the first quarter, new home sales activity represented nearly 20 per cent of total sales in Cochrane, compared to 10 per cent in Airdrie and five per cent in Okotoks.”

In Okotoks, detached benchmark prices averaged $453,567 in the first quarter of this year, a 1.23 per cent increase relative to the fourth quarter of 2014 and 6.98 per cent higher than the first quarter of 2014. During this period, Okotoks sales activity totaled 117 units, a 21.5 per cent decline compared to last year. Relative to Airdrie and Cochrane, detached properties make up the largest share of sales in Okotoks.

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Budget: Dramatic fee hikes coming to real

estate market

Jason Markusoff, Calgary HeraldMore from Jason Markusoff, Calgary Herald

Published on: March 26, 2015

Last Updated: March 26, 2015 8:23 PM MDT

Mikaela MacKenzie/ Calgary Herald CALGARY, AB --MARCH 26, 2015 -- The land titles office in Calgary on Thursday, March 26, 2015. (Mikaela MacKenzie/Calgary Herald) (For C story by ) 00063780A SLUG: Budget

Mikaela MacKenzie / Calgary Herald

In a budget thick with user fee increases, homebuyers face the biggest whack — registration fees will triple or quadruple for many new property owners.

The dramatic hikes for registering new land titles and mortgage documents come as Alberta’s real-estate market is mired in a significant slump, with sales volumes down and prices beginning to dip.

The move surprised many in the sector, but Service Alberta Minister Stephen Khan said lawyers and real-estate associations told him there was room to grow, compared with the taxes and fees in other provinces.

“We heard that independently from our stakeholders — boy you guys are really, really really low when it comes to fees,” Khan said. “There’s a recognition that having the lowest fees is not a sustainable model.”

There are two segments of land title and mortgage registration fees, and both will rise July 1. The flat-fee portion for each type of registration goes from $50 to $75.

But it’s on the “variable” or per-dollar fee that homeowners will really pay up. That charge will rise to six times its current level.

Here’s what it will mean for someone who purchases a $500,000 new home this summer — the rough average price for a standalone house in Calgary — and takes out a $400,000 mortgage:

— Currently, the new land title for that buyer costs $150 and the mortgage registration costs $140, for a total of $290.

— In the new budget, a land title would cost $675 and mortgage registration $555. The new total: $1,230.

While this fee is a fraction of the price of a new house or condo, new homebuyers are often surprised by the bevy of unexpected costs like home inspection, legal fees and the suddenly increased levy for document registration, said Liberal MLA Darshan Kang, a former real-estate agent.

“I don’t think this is going to help sales,” Kang said.

It’s the first time since 2011 the province has increased the flat fee for property and mortgage registrations. In the Klein era, the province slashed the variable fee from o.1 per cent of a property price to 0.02, and it hadn’t moved since. Now it will be 0.12 per cent.

While registration fee hikes bring Alberta much closer to the national average, it’s still well below what homebuyers pay in provinces with land transfer taxes. That same $500,000 property would come with an $8,000 transfer tax in Vancouver, $7,500 in Halifax, and $12,200 in Toronto, according to ratehub.ca, a financial comparison website.

The oil price collapse has walloped Calgary’s home resale market.

The Calgary region recorded one-third fewer residential sales this February compared to last February, while the median price went down 2.1 per cent, according to Calgary Real Estate Board data.

“The market has already been trending downward and the added fees certainly won’t help, but won’t be the sole deterrent from buying,” said Mike Fotiou, an associate with First Place Realty.

While Khan said he hasn’t heard worries about the fee hike from many groups, others that didn’t see this coming are still looking at what the change means for buyers of resale and new homes.

“It was a surprise to us. We didn’t know it was on the table,” said Amie Blanchette, government affairs director for the Canadian Home Builders Association, Calgary region.

Jmarkusoff@calgaryherald.com

Twitter.com/markusoff

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SHIFTING STANDARDS

by CREBNOW on APR 9, 2015

Home inspections help keep tabs on fluidity of building codes

Despite the continued popularity of reality shows that showcasing the positive side of home renovations, buyers need to be ever aware of the damage that can be done when things don’t go according to plan, says a local home inspector.

While the temptation to plunge into home ownership might be strong, CanPro Inspections Ltd. owner/operator Larry Pineda urges buyers to practise due diligence when purchasing a home in order to protect themselves against shoddy workmanship or even work done prior to changing standards – some of which may have taken place years or even decades prior.

“If I inspect a home that was built in 1990 or even earlier, where certain things like Arc Fault Circuit Interrupters were not required in bedrooms compared to a bedroom that was done two years ago, at that point in time I would recommend [work on] certain things that do not adhere to modern building standards,” he said.

For example, the National Energy Code for Buildings in 2011 established a 25 per cent improvement in energy efficiency for buildings four storeys and taller.

The National Building Code was also updated in 2012 to add new sections on energy efficiency for new homes and small buildings three storeys and smaller.

The national codes are recommended guidelines, becoming law when adopted by a province.

While renovated homes would not need to take such standards into account, the changes highlight just how drastically construction standards can change over time, said Pineda.

“We’re not out to attack renovators. However, we are out to tell our clients, ‘If you’ve had this renovated, it should be done properly,’” he said.

“If it was done 20 years ago, it might have been OK then, but building standards change and you need to get it accessed by a licenced professional, whether it be an electrician or a plumber or whatnot.”

In Alberta, home inspectors require a licence to operate, as well as a degree, diploma or certificate, or, an approved home inspection designation.

To the west, B.C. recently announced a professional standard for home inspection licensing. While similar rules have been proposed for Alberta, they have yet to be adopted.

On the other side of the inspection equation, the City of Calgary recently launched a tool to help Calgarians find a licensed contractor. While having a business licence does not guarantee a contractor can be trusted, it is a good indication a business is legitimate and the owner’s identity is known by the City.

“We’ve built the Licensed Trade Contractor tool to help Calgarians verify if a trade contractor is licensed with the City, which is an important first step before selecting a contractor for your next home renovation or repair,” said Kevin Griffiths, director of inspections and permit services with the City’s Planning and Development department.

“Helping Calgarians find certified and licensed contractors is one way to avoid potential scams, and ensure work is done to applicable code and bylaw requirements.”

The database is available at www.calgary.ca/contractors. Licences can also be verified by calling 403-268-5521.

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Inventory gains influence housing prices

by crebnow on Apr 2, 2015

First quarter activity reflects economic uncertainty

Elevated inventory levels and low sales for three consecutive months caused unadjusted benchmark prices to ease by 0.44 per cent in March, relative to the previous month, for a total of $454,300. Based on first quarter statistics, conditions are consistent with buyers’ market conditions.

Typical home prices have declined by 0.59 per cent in the first quarter of 2015, compared to the fourth quarter of 2014. The sales to new listings ratio also dropped to 41 per cent and months of supply averaged 4.03 for the quarter. This is a significant change from one year ago when the market was facing inventory shortages and price gains.

“Based on current sales activity and rising supply levels, the change in pricing does not come as a surprise,” said CREB® chief economist Ann-Marie Lurie. “However, the recent price adjustments have not eroded all the higher than expected price gains recorded last year. While conditions have likely tempered growth in new listings, further near term price adjustments will be dependent on changes to inventory levels.” said Lurie.

Sales activity fell by nearly 30 per cent in March, compared to this time last year, and remains well below 10-year averages. City of Calgary sales totaled 3,843 units at the end of the first quarter.

“In this market, buyers and sellers should be thinking about their short term and long term objectives,” said CREB® president Corinne Lyall. “This is a challenging economic time and people need to know their long game, so they can make the right real estate choices for today and tomorrow.”

While Calgary’s housing market has demonstrated buyer market conditions for the first quarter, the recent pullback in new listings in March has helped ease the growth in inventory levels, resulting in better absorption rates.

The apartment sector has the highest months of inventory in Calgary. This has resulted in higher quarterly price declines in this sector, when compared to the detached and attached sectors. By the end of March, the apartment quarterly benchmark price declined by 1.46 per cent, against the previous quarter. This compares to the 0.4 per cent declines in the detached and attached sector over the same time frame.

“Market influence is always wide-ranging and everyone has different reasons for making a move,” said Lyall. “Consideration must be given to the amount of inventory that’s available for a similar property based on the specific features of that home. The amount of competition for a property is often what influences the price that buyers and sellers will agree on.”

When considering the inventory that is available in the City of Calgary, there are 878 units priced under $300,000, of which 99 per cent are either apartment or attached product. The majority of inventory falls in the range of $300,000 to $600,000, of which 56 per cent of the product is detached. Meanwhile, at the other end of the spectrum, there are 1,933 units in inventory at a price over $600,000, of which more than 72 per cent are detached homes.

“Concerns in the energy sector continue to persist, and employment figures are starting to support those concerns,” said Lurie. “In February, employment figures pointed towards job losses related to the energy sector. While monthly employment gains offset the losses, most of the gains were in the traditionally lower paying industries such as the personal services sector. If this trend continues, it may influence the composition of housing demand,” said Lurie.