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New Mortgage Rules in Canada

The Honourable Jim Flaherty, Minister of Finance, and the Honourable Christian Paradis, Minister of Natural Resources, today announced prudent adjustments to the rules for government-backed insured mortgages to support the long-term stability of Canada’s housing market and support hard-working Canadian families saving through home ownership.
“Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped protect us from the worst of the recent global recession,” said Minister Flaherty. “The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future.”
“The economy continues to be our Government’s top priority,” continued Minister Paradis. “Our Government will continue to take the necessary actions to ensure stability and economic certainty in Canada’s housing market.”
The new measures:

• Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
• Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.
• Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.

Our Government’s ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.
The adjustments to the mortgage insurance guarantee framework 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.

Housing prices soften as sales bump up

Housing prices soften as sales bump up

The average price of a single family detached property in the Edmonton area continued to soften in November. According to the REALTORS® Association, at $362,657, the average SFD price was half a percent lower in November than it was in October. Compared to a year ago the price was down significantly by 2.5%. November condo prices also took one of the biggest drops this year with the average price down 2% to $229,603 month-over-month and just under 3% year-over-year. Average duplex/rowhouse prices of $318,605 went up over the previous month (6%) and previous year (10.6%).
Despite the softening of prices in specific categories, overall the market remained stable with the all-residential average price of $319,479 (up 0.65%) from October and up a third of a percent from last year. There were 1,120 residential sales on the Edmonton MLS® System in November as compared to 1,077 in October. Listings were down from 2,267 in October to 1,860 in November. This resulted in a drop in the available inventory from 7,689 to 6,982 residential units; still considered high for this market.
"Softening prices, a dip in interest rates, increasing sales nationally and excess local inventory all contributed to a month-over-month sales bump," said Larry Westergard, president of the REALTORS® Association. "Housing affordability in Edmonton is lower than the national average and economic growth in Alberta is expected to exceed other parts of the country."
The sales-to-listing ratio in Edmonton and area was 66% and the average days-on-market was down from 60 to 59 days. Taken together the two figures indicate that sellers must exercise patience as they wait for a buyer.
"It seems that Edmonton is out of phase with the rest of the country and is lagging slightly in comparison to other major markets," said Westergard. "All the indicators suggest that an increase in real estate sales is right around the corner."

Month-over-month price drop brings properties to 2009 price levels

Month-over-month price drop brings properties to 2009 price levels

Although the all-residential average price dropped 3% in October, average prices are almost exactly what they were a year ago. Single family dwellings were sold on average for $365,691 which is just $1,434 less (-0.39%) than October 2009. Condos sold in October for about $2,000 less (-0.9%) than a year earlier at an average price of $235,893.
"Stability is the key word for the Edmonton housing market," said Larry Westergard, president of the REALTORS® Association of Edmonton. "Prices this fall are matching almost dollar for dollar with prices for the past two years. But I am pleased to report that the inventory dropped 10.6% in October, and as it returns to a more normal level, prices will start to move."
The average all residential price in October was $317,422 as compared to $327,235 in September. It was less than one percent lower than the October 2009 price of $320,184. Listing activity continued to slow with just 2,269 residential properties added in October. There were 1,077 residential sales for a sales-to-listing ratio of 44.5%. Total residential inventory was 7,689 properties at the end of October as compared to 8,602 the month prior. The average days-on-market went up to 60 days from 56 last month.
The all-residential median price rose from $306,500 in October 2009 to $308,000 last month. "This rise in the median price stretched the range of the lower end of the market," said Westergard. "Yet REALTORS® still found 529 properties priced under $300,000 for buyers with smaller budgets or modest housing needs in October. There is still a home suitable for every buyer in this market." There were 32 sales of residential properties priced at over $750,000 during the same month.

4 Ways to Check If It’s Time to Reduce Listing Price

” Is my house overpriced? “
It’s a question that crosses every seller’s mind at some point if they’re attempting to sell their property. Properly pricing a home to sell can be tricky, especially if a seller is trying to sell in a slow market or if their home value has depreciated since they purchased it.
Still, it’s crucial that the listing hits the market with an attractive, and reasonable, price tag. Despite knowing this, some sellers will attempt to list a property above market value with the old “start high, come down later” routine, but this poor practice can leave a home stale on the market with little hope of selling.
So if you’re sitting around wondering, “Is my house overpriced?” then ask yourself these 4 questions first:

1. Is your home priced to compete with neighboring listings?
   Before putting your home on the market, your agent should have presented a comparative market analysis – or CMA – to determine what the ideal listing price is for your home. Review all of the recent activity in your area to weigh the likelihood of your home selling at the price in mind. If your house is listed far above what any home in the area has recently sold for, then the answer to the question “Is my house overpriced” is a resounding YES!
2. Has there been little or no interest in your home since it hit the market?
   Houses fresh on the market generally experience a large amount of showings within the first few weeks of being listed. If your house has had little traffic (and isn’t in shambles) then you may need to reduce the listing price. Don’t get stuck in “we’ll just see what happens” mode – a home sitting on the market for too long makes buyers wonder if there’s something wrong, which will only add to the issue.
3. Have there been showings, but no offers?
   This scenario is where sellers may find themselves asking “Is my home overpriced?” on a near-daily basis. If you’re at this point and your home is priced well above comparable homes also for sale in the area, it may be time to reduce the listing price. If you’ve done your homework and priced your home according to the CMA from the start, then it may just be the right buyer hasn’t come along yet.
4. Did you interview multiple agents and pick the one that suggested the highest listing price?
   A good real estate agent will present the most comprehensive data in order to build a solid case for the suggested listing price. If you speak to multiple agents, all suggesting listing prices in the same ballpark, then you’re being pointed in the right direction. If you come across an agent that strays from the pack – run. These agents may not be experienced in your area or have your best interest at heart.

Once you’ve answered the questions above, answering your original question of “Is my house overpriced” should be a cinch and your next course of action should be a given.
If your house is overpriced, have a sit-down with your listing agent to determine what the listing price should be reduced to. If it’s not, call a meeting with your agent to see how you can get more exposure for your listing and draw in more buyers.

Current Edmonton Real Estate Stats

REALTORS® Association of Edmonton

MLS® Daily Residential MTD Activity
for October 2010

	Value of Solds	Sold Units	Average Sold Price	New Listings	Active Listings
RESIDENTIAL
Single Family(House)	189,248,522	514	368,187	1,064	4,704
Single Family(Condo)	50,079,465	209	239,614	535	2,359
Duplex/Rowhouse	9,012,487	32	281,640	110	368
Residential(Other)	2,445,700	24	101,904	102	541
	=============	=============	=============	=============	=============
TOTAL	250,786,174	779	321,933	1,811	7,972

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Total MLS® Summary by Value/Count

10,000 -  99,999 48 375,000 - 399,999 68 575,000 - 599,999 10 100,000 - 149,999 58 400,000 - 424,999 42 600,000 - 649,999 9 150,000 - 199,999 83 425,000 - 449,999 35 650,000 - 699,999 6 200,000 - 249,999 98 450,000 - 474,999 18 700,000 - 749,999 6 250,000 - 299,999 123 475,000 - 499,999 19 750,000 - 799,999 6 300,000 - 324,999 81 500,000 - 524,999 12 800,000 - 899,999 7 325,000 - 349,999 68 525,000 - 549,999 14 900,000 - 999,999 3 350,000 - 374,999 56 550,000 - 574,999 9 1,000,000+ 8

Sellers Beware

Message from the Edmonton Real Estate Board

This past weekend, a couple posing as buyers knocked on the door of a listing and asked the owner if they could just take a quick peek inside. The owner consented and invited them into her home. The male excused himself when the ladies were in the kitchen so he could have a look at the garage where he proceeded to steal the registration and insurance papers from the home owner's car.
The "viewing" continued again and the home owner was not in the presence of both of the "Buyers" at all times. After they left, she discovered that her wallet containing all her identification, credit cards, etc. had been stolen from her purse.
With so many listings and in many cases very little Buyer activity, it's understandable that a Seller would be pleased with almost any interest. It is also predictable that some low-life would come up with this type of scam to prey on anxious Sellers.

REALTORS® please advise your Sellers to never admit anyone posing as a Buyer into their property without an appointment and/or in the company of a REALTOR®.