Sunday, November 30, 2008

Be Optimistic

My friend Grahame posted pictures of his new 'neighbors' last night. I was a bit surprised to learn that they mainly consisted of a rag-tag group of poisonous reptiles, somehow peacefully coexisting in and out of the structures of his home.

The last time I visited Grahame was in sunny Victoria, B.C., we toured his modest house and sat on his newly built deck over looking the oriental pond that he'd built. So, the shock of reptilian neighbors made me think that the old neighborhood had really changed.

But these neighbors are a new set.

Grahame actually sold up his Island home and moved to Nicaragua a few months ago. His lifestyle change had temporarily slipped my mind, probably as I'm getting used to my new lifestyle with baby Ronan.

Moving to Nicaragua was a massive step for my friend and one that he weighed out with considerable thought. It's definitely not for everyone, but I bet its pretty liberating for those that can do it.

Grahame used a fair chunk of profits from his home sale to fund the costs of building his villa. He continues to co-operate a successful business back in Victoria, and coupled with other investments, provide him the cash flow needed to cover daily living expenses.

Although Nicaragua may not be your dream, yours may be Paris, Zimbabwe, New York or just to pay off your home's mortgage.

Grahame's story is another example of how you can use your real estate (and other investments) to seize your dreams anytime in life - you don't always have to wait for retirement, especially if you're open to mingling with new neighbors.

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Friday, November 28, 2008

CMHC Housing Market Outlook Fall 2008

CMHC posted their Housing Market Outlook for Fall 2008 earlier this month. Although media and many pundits cry bust it looks like a healthy market adjustment. Next year we can look forward to healthy sales and therefore rising resale home prices.

"Existing home sales across Greater Edmonton will fall by 12.4 per cent this year but should post a moderate rebound in 2009. A relatively strong economy, lower mortgage rates, solid wage gains and the absence of further price declines will underpin a modest recovery next year. Residential sales reported on the MLS® by the Realtors Association of Edmonton (RAE) will reach 18,000 units in 2008, improving by almost three per cent to 18,500 sales in 2009. Next year will represent the fourth best year on record with sales approaching the levels reported in 2005 but remaining well below the 21,200+ units sold annually on average during the peak years of 2006 and 2007."

Download your copy today HERE

Monday, November 24, 2008

CREA and Banks Say Things Aren't So Bad

The Canadian Real Estate Association predicted that the economy will perk up in about 8 months or mid to late 2009 and thus cause real estate markets to realign by 2010. If you want to sell your property before then be prepared to be flexible on price or terms.

Winter generally means a slow down in sales and rentals so those who MUST sell should offer attractive incentives to prospective buyers - vendor take backs and agreement for sales are good ones.

An Ipsos Reid study indicates that in Alberta 24% of people are looking to buy a home in the next two years and 9% are very likely to buy. That means that there ARE buyers out there but they have a lot of choices.

"The interest-rate environment still very appealing," "Add to that the softening of resale prices and we find that the ensuing affordability is letting more people into the market -- people who had previously been taken out of the market by steadily increasing house prices of a year ago." Don Peard, Calgary-based vice-president of mortgage specialists with the Royal Bank.

Starter homes, condos and townhouses are "best sellers" among first time buyers.

Friday, November 21, 2008

Why so glum?

I read an article the other day that Albertans are gloomier than most Canadians about the home prices. My question is why? The market is stable and compared to what is going on in the rest of the world very healthy.

It seems to be a case of think it and it will be real. According to economist Canada is actually in pretty good shape. I think as Canadians we have been financially tied to the U.S for so long that we automatically assume that their financial crisis is ours.

However in world terms Canada is doing very very well.

"Canada is a financially conservative country where consumers are able to meet the terms of their mortgages, and buying decisions are based on affordability,"

"This contributes to a solid real estate market that will not experience the same drop-off we see south of the border." Will Dunning, Canadian Association of Accredited Mortgage Professionals' chief economist

If you think Alberta is in a bad way listen to this BBC special on Iceland. Iceland went from the fifth richest country in the world to a devastated economy where national debt is 12 times the national GDP.

Wednesday, November 19, 2008

How the stock market works - An Analogy

It was autumn, and the squirrels asked the oldest wisest squirrel if the winter was going to be long or mild. Since he was a squirrel in a modern society, he couldn't tell what the winter was going to be like.

Nevertheless, to be on the safe side, he replied to the other squirrels in his dray that the winter was indeed going to be long and that the members of the forest should collect many nuts to be prepared.

But also being a practical squirrel, after several days he got an idea. He went to the phone booth, called the National Weather Service and asked

'Is the coming winter going to be long?'

'It looks like this winter is going to be quite long indeed,' the weather man responded. So the old squirrel went back to his tree and told the fellow squirrels to collect even more nuts. A week later, he called the National Weather Service again.

'Is it going to be a very long winter?'

'Yes,' the man at National Weather Service again replied, 'It's definitely going to be a very long winter.' The old squirrel again went back to his people and ordered them to collect every single nut they could find. Two weeks later, he called the National Weather Service again.

'Are you absolutely sure that the winter is going to be very long?'

'Absolutely,' The Man replied. 'It's going to be one of the longest winters ever.' 'How can you be so sure?' the squirrel asked. The weatherman replied, 'The squirrels are collecting nuts like crazy.'

And now you know, this is how Stock Markets work.

Tuesday, November 18, 2008

This And That

Houses are still homes - "Falling home prices can actually result in positive change. For one, people will be less inclined to borrow against the equity in their homes to pay for things that don't appreciate in value -- and that they don't really need -- such as vacations or home renovations. Too many people, when their equity was growing faster than a properly pruned hydrangea, treated their homes like shingle-clad credit cards.

Home buyers will also, one imagines, be more reluctant to purchase houses they can't really afford. In recent years, many people worried little about buying well beyond their means because they believed home prices could only go up. A homeowner who lost a job or experienced some other financial calamity could always sell and reap a tidy profit. Why worry? But now, with home sales falling alongside prices, we now know that no plan is free of risk.

Another benefit to a more rational housing market is that people learn to diversify their investments. It is not uncommon for homeowners to have the vast majority of their net worth wrapped up in their houses. But buying a big house is an inadequate retirement plan. After accounting for expenses -- property taxes, insurance, repairs, renovations -- it becomes clear that a house, while a sensible investment, should not be one's only investment."

No, a house isn't an investment unless you have planned for it to be. It's true many people use their home equity to buy depreciating goods then complain when markets fluctuate (as they do) and they are left with huge mortgages. Buying an investment property and using your home as a credit card are two entirely different things.

Market worries take whack at your wallet - " Frugality is the new black. A financial meltdown has sent markets and consumer confidence sliding.

An October report from the Conference Board of Canada ranks faith in the economy at its lowest level in more than 25 years.

Even the once-ravenous shopping appetite of Albertans is shrinking, with retail sales dropping about 18 per cent from August 2006 to August 2008.

Alberta is the only province where retail sales in August fell from the year before, Statistics Canada says.

Sales here remained below year-ago levels for the fourth straight month as retailers head into the crucial holiday season.

Some economic observers say Albertans are reacting to bleak headlines about troubles elsewhere, not to hard times at home. Locally, at least, they think the crisis is mostly in our heads.

"The pendulum tends to swing to the fear side, and we're right at the extreme end of fear right now," Canadian Western Bank president Larry Pollock said."

Alberta is a financial island in Canada. The province is strong economically and there is a lot of demand in the real estate market. However seeing paper assest drop will makes consumers wary of spending freely.

Condos going ahead More private capital being used than borrowed - "The last few weeks have seen condo projects in Calgary, Kelowna and Canmore grind to a halt. But developers behind some of Edmonton's most high-profile projects insist it's business as usual.

"We're building those first two phases," "I think the fundamentals in Alberta haven't changed. I think we're better off than the rest of the world so we haven't noticed even in our Calgary projects any cancellation of deals." George Schluessel, CEO of Procura Real Estate Services."

Monday, November 17, 2008

The Hot Dog Parable - A New Twist

With more and more focus devoted to how bad we have things, I thought I'd dig up a mini version of the Hot Dog Parable.

The Hot Dog Parable: There once was a man who lived by the side of the road and sold hot dogs. In fact, he sold very good hot dogs....

He put up highway signs telling people how good his hot dogs tasted. He stood by the side of the road and called out, “Buy a hot dog, mister?” And people bought his hot dogs. They bought so many hot dogs, the man increased his meat and bun orders. He bought a bigger stove so he could meet his customers’ demands.

And finally, he brought his son home from college to help out in the family business.

But something happened. His son said, “Father, do you not watch television, or read the newspapers? Do you not know we are heading for recession? The European situation is unstable, and the domestic economy is getting worse.”

And the father thought, “My son is a smart boy. He has been to college. He ought to know what he is talking about.”

So the man cut down his meat and bun orders, took down his highway signs, and no longer stood by the side of the road to sell his hot dogs. His sales fell fast overnight. “You’re right son,” said the father, “We certainly are in a serious recession.”

If you're worried about the man who sold hot dogs, his story has a happy ending. Luckily for him, he had a daughter too. His daughter was able to show him that attitude, commitment and belief are what it takes to change, succeed and even sell hot dogs. After all, there are many folks who still want to buy them, 'recession' or not.

I'm glad I'm not the only one...

After the was relaunched last month I have had nothing but grief trying to work out how to use the new interfaces and even just get to my regions on the map. Apparently 16,000 emails says I'm not the only one:

"The new site, redubbed in a nod to the industry it's meant to serve (, CREA rightly decided, was a little oblique), was meant to improve the user experience, not hamper it. The old interface, which divided provinces or cities into arbitary segments (Toronto's were C01 for downtown, or W01 for the west end), was done away with in favour of postal codes, or an interactive map.

The problems were apparent immediately. "People had some trouble getting the map to work," Linney (Bob Linney of CREA) says, a verbal shrug. On the technical side, CREA is trying to iron out the rough spots for a quiet reintroduction of the new site on Nov. 20"

I especially like the reference to online house browsing as "real estate porn" - gawking into houses we dream of affording. It's sort of a virtual visualization isn't it?

Anyhow hopefully the relaunch will improve the site we know and love.

Wednesday, November 12, 2008

Alberta Oil Sands Video

One of a kind, sustainable for centuries and in our own backyard.

Edmonton Hits The Big Time

Edmonton will be featured on an American reality show called House Hunters International. The "house hunter" will look at three condos downtown, pick one and buy it with a follow up three weeks later to see how the new owner is doing.

Hopefully he/she won't get drunk, verbally attack some people and/or have promiscuous sex on national t.v. as commonly seen on other reality t.v shows.

Tuesday, November 11, 2008

A Helpful Hint

Getting a cold can really get you down especially if you don't have time for that kind of stuff. Todd and I do everything to prevent colds: eat garlic, ginger tea, mega doses of Vitamin C, reduce sugar intake, positive thinking and on and on. Recently I read about Zinc which is said to be very good for fighting the flu battle.

HOWEVER Don't take zinc on an empty stomach!

I learned the hard way. Let's just say any of the food poisonings I have experienced in many countries were, well, enjoyable compared to the nausea and vomiting you will experience.

Whatever you do take it after a meal.

"Large intakes of zinc can cause nausea and diarrhea, vomiting, dehydration, fever and chills, electrolyte imbalances, dizziness, abdominal pain, lethargy and a disruption of coordination."

Sunday, November 09, 2008

I'm One Month Old

Well that flew.

Ronan turned one month on Friday which means we can finally go outside! In Japan its recommended to stay inside for one month after the child's birth to avoid viruses and germs.

Although before I delivered I met a woman with a two week old out in the shopping mall. We waited the whole month we didn't quite have cabin fever but we were more than ready to get out and enjoy the fabulous autumn weather.

Thursday, November 06, 2008

This And That

Snap out of it Alberta - "House prices were skyrocketing, and real estate was being snapped up online, sight unseen, for above list price. People were bribed with iPods and other crazy perks to work at doughnut shops. Bentley dealerships couldn't keep up with demand. The Bank of Canada came up with a new category of economic indicator - "Canada excluding Alberta" - because Wild Rose Country was skewing the national averages.

As a result, Alberta built up a delusional superhero persona, a false sense of invincibility that permeated the mood and expectations of ordinary citizens."

Yeah we are superhuman if we took hits that everywhere else took and still have an economy that the world envies we can't be doing too badly right!

Tax change on investment properties would spur development, realtors say - "With a change to the federal tax system, realtors say Ottawa can create thousands of jobs, make advances in cutting greenhouse gases and hand communities more control of their own development.

The Canadian Real Estate Association (CREA) wants Ottawa to defer collecting the capital gains tax and capital cost allowance from investment properties when a property is sold and the money reinvested in real estate within a year.

The goal would be to "unlock" properties kept off the market because owners simply don't want to pay the tax owed."

This would be an incredible bonus to real estate investors, very similar to laws in America that allow you to "roll over" your profit into a new property. If you have ever played Cashflow you would have heard of it. This is an excellent way to keep investors moving their properties - an incentive to sell and move up in the market.

Alberta to spend $757000 to help house homeless people in Edmonton - "Alberta will spend $757,000 this year on a pilot project to help provide housing for homeless people in Edmonton. Under the Rapid Exit Shelter program community groups wiill work with the Hope Mission to find safe housing for 80 people. The funding is part of the province’s plan to spend $93 million for services for the homeless throughout Alberta."