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®.

Lack of consumer activity holds housing market steady

Housing prices in the Edmonton area remained stable as we enter the final quarter of the year. Single family dwelling prices in September mirrored prices in August and condo prices rose slightly after four months of decline. Both listings and sales declined in September as compared to a month ago.
"The market seems to be resting," said Larry Westergard, president of the REALTORS® Association of Edmonton. "After the turmoil of the past couple of years and the rush to buy in the early part of the year, it seems that consumers are just sitting back and waiting to see what comes up next." There are still over 8,600 residential properties in the local inventory and buyers have lots of choice.
The average price of a single family property was up $472 and sold for $370,653 in September. Condominiums, which have dropped in price for four consecutive months, rallied and sold on average for $238,822 last month. The slightly less than 1% price increase did not reverse drops from a high of $252,728 in April. The duplex/rowhouse average price was down 11% to $313,462 but tends to vary widely from month to month. The residential sale price (which includes all types of residential property) was $326,499; down less than a quarter of a percent from last month.
Residential sales in September were down from the previous month at 1,187 as were listings at 2,668. This sales-to-listing ratio was 47% and the average days-on-market was unchanged at 57 days.

Current Market Value

As an owner, by understanding market value, you’ll have the greatest advantage for selling your home for the most money possible.
In an “up” market, usually referred to as a “buyers’ market,” you can get away with pricing your home a little higher than market value. If you do this is a slow market, often referred to as a sellers’ market, you can end up with a devastating result.
The key to understanding how to properly price your home comes from knowing your home’s “Current Market Value” and the details of the market where your home is for sale. Only then can you fully understand how to deal with minor repairs, determining a listing price and preparing for a reasonable time period that your home will be on the market.
As a Real Estate professional, I can guide you through every step of the selling process with my pricing system.
Pricing Realities


Yes, it’s true! The higher you price your home, the fewer buyers will look at your home. You should see activity if you are listed on MLS® in any market; if you’re not seeing activity, your selling prices is a major indicator.
When You Price Beyond Market Value:

1. You will reduce the number of prospective buyers (see chart), which may not matter in a sellers’ market, as the number of buyers is high. In a regular market, prices increase or decrease less that 2% annually.
   
2. Helps to make your listing less competitive, as homebuyers generally price shop. As buyers look at all online home listings with their agent, they become quite educated in the marketplace, quickly identifying the available home that is best suited for them.
   
3. You eliminate interest in your home through online searches and advertising.
   
4. You risk rejection of mortgage approvals – if the home won’t appraise, the lender won’t lend!
   
5. You risk being labeled – many homes are labeled by the industry as over priced, based on market competition, usually resulting in one word: “expired.”

Let me Help You Price Your Home “At” Market Value, generating:

1. More responses to advertising
   
2. More showings
   
3. A house that statistically sells in the first 30 days, resulting in the higher price

This successful process results in receiving maximum market value 100% of the time.

Go it alone or use a REALTOR®?

The fact is, most people who try to sell their own home end up using a REALTOR^® in the end anyway. Before anybody decides to fly solo through this complex, time consuming and financially perilous process, they should consider these questions.
Will you really “save” the real estate commission?
When buyers see a home for sale ‘by the owner’, they see a bargain. They imagine the REALTOR'S^® fee going into their pocket, not yours.
Are you familiar with real estate law?
Complicated and ever-changing real estate law governs nearly every phase of selling your home. One misstep, and an entire deal can fall through, or worse, result in a lawsuit.

How many potential buyers will you reach?
Selling a home takes more than just hanging a “For Sale” sign. How will you promote your home? Will you write your own ads? How will you use the Internet, knowing that you’ll have no access to the cooperative service available through the Multiple Listing Service®. MLS® and the corresponding web site www.REALTOR.ca have changed the way people search for homes, and it’s hard to court buyers without it.
Do you have the time?
Promoting a home is a full time job, and you may already have one. Will you be able to take calls at any time? How about screening the callers to figure out if they’re suitable candidates? Not everybody who calls is even suitable to walk through your home, but how do you tell?
Do you know the market well enough to get the most for your home?
Lacking years of experience, the average do-it-yourselfer is merely guessing at their listing price. Often they set the price too low and miss out on thousands of dollars, or they price their home too high and drive away willing buyers.
Do you have the negotiation skills to keep a deal on track?
When an offer comes in, emotions can run high with so much money on the line. This is why direct seller-to-buyer deals often end in disaster. REALTORS^® keep it professional and are indispensable when it comes to bargaining with buyers.

Realtor Commissions and Where they Go

The public often has the misconception that Realtor Fees are extremely high and have no idea where the funds go that they pay out as commission. The following will outline where the commission paid on the sale of your home goes. 
First off, the commission is typically split between two Brokerages (the Buyers Agent and the Sellers Agent),  then, internally between the Brokerage and the Agent involved in the transaction. This of course is depending on what sort of split there is between the Agent and the company that he or she works for, or has their licence held by as an independent contractor. After this split, Revenue Canada now gets involved. As an Agent (contractor) to the brokerage, we are responsible for all of our own taxes and deductions.
So you can see, using an example only: If you pay 7 percent on the first 100k and 3% on the balance, as a Seller, and if the split is 50% to each corporation, using an example of $300,000 as the sale price. that would be total commission, plus GST equaling $13,000. Yes, I agree that looks like a big number.
Divide the $13,000. by two Brokerages and that equals $6,500 to each Brokerage. Now if the Agent is on say a 60 / 40 split with the Broker that means that $3,900 goes to the Agent and $2,600 to the Broker. Now, out of the Agents portion of $3900 they have to pay the government for personal taxes and deductions. Out of this they also must pay for office rent, their car, maintenance, insurance, gasoline, annual licensing fees (which are large), annual training, and all their related office expenses including but not limited to: a computer, a fax machine, a photocopier, a printer (often more than one), cell phones, data plans, mobile internet sticks, pagers, laptops, software, digital cameras, virtual tours, marketing materials, MLS Fees, postage, advertising, web sites, paper, printer ink, toner cartridges, admin staff, and answering services, etc. All of this and I haven't fed my family or paid my mortgage yet.

Usually you pay no money to a Realtor up front, so the agent fields all the expenses from his/her own pocket, often over a period of months, until such time as a pay cheque arrives, often many months after the purchase or sale has closed. For example: you buy or sell a house in April with an August possession date.The agent can look forward to getting paid sometime in September, and must budget accordingly.
I hope this gives you a better understanding of where the Fees charged by Realtor's go
Chris