Edmonton Real Estate Investor: alberta real estate market

"If most people keep their jobs, they’ll be able to pay their mortgages. If you have a job and you want to sell, you’ll likely still choose to not sell over accepting an offer that represents a big hit to your equity.
If that happens, we’ll find a lot of listings remaining unsold, with corresponding big drops in sales stats, but relatively stable prices."

I think prices are going to go down for the next 18 months -24 months. We may enter a down turn of 2 years, then up again in 2017 or 2018.

If you step back, it just seems to be that 5 to 7 year cycle. We may enter a down turn of 2 years, then up again in 2017 or 2018.

If you have a lot of equity and don't mind getting out then do so. I see a lot of listings where prices are strong. Of course asking price and selling price can be two totally different things.

Read the entire excellent level headed article here

"When it comes to the real estate market, the conjecture is flowing, the questions being posed, the concern mounting. In the majority of the country, this concern is all focused on markets perceived to be ‘over-priced’ or ‘over-heated.’

However, with a quick trip west to Alberta you find the concern is on the opposite end of the scale with the experts asking the question: “Why isn’t the market booming like it was in 2007?”

This is a great question because I feel like we are back in 2006 - mortgage rates are low, employment figures are high, in-migration is visibly high and yet the house prices are lagging....

READ WHY

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"The difference in the resale housing market now, compared to the beginning of the year, is night and day and nowhere is this more evident than in the West," said Dale Ripplinger, association president.

"Homebuyers recognize that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher."

A five-year fixed-rate mortgage, the most popular among consumers, is still available for less than four per cent at some financial institutions.

Variable-rate mortgages, tied to prime, remain at about three per cent and are not expected to rise until June. The Bank of Canada has pledged not to change its lending rate until then -- but it is not an ironclad guarantee.

The low rates seem to have worked and have the market even hotter than in 2007, a record year. July sales in 2009 were 3.9 per cent above the previous July high set in 2007.

It has been a stunning reversal for a real estate market that had almost ground to a halt over the winter." Read More

"It will be real estate that starts to stimulate the economy,"

"I don't buy into the concept of bottoming out.........People make the decision to buy based on their personal wants and needs. Is it the right time to buy? If you are comfortable with where you are financially, then now is the time to do it."

"Real estate is a commodity that will not and cannot disappear,"

"We live in it, we work in it, we shop in it and we worship in it. No matter how many downturns there are in the market, real estate eventually always goes up in value."

"First-timers are still the fuel needed to get the move-up buyer back in the game, but the key is to price smart--price to sell........If you're waiting for another price war, it's not going to happen for a long while."

"Buy. Get into the market, because the rates are historically low and prices in the Alberta market are down. But also be patient because the value of the home is going to increase and you're going to be able to move up if you're smart throughout the process."

John Gaha president of Coldwell Banker Canada

If you stood in line for hours two years ago hoping to pick up a pre-build condo when Alberta prices were going up - I hope this article isn't about you.

Builders are suing buyers who backed out of a condominium development in Leduc. Now that prices are softer and the condo sale price has lost value, going from $400,000 to $355,000, buyers want out.

Buyers put down $20,000 and are being sued for $75,000 - it's probably the most expensive line-up they've ever been in.

There are two kinds of investing, the first based on economic fundamentals and the other based on speculating. Of course you can turn a profit both ways but speculating will always be more dangerous. If these people are buying a home then the value is not so much in the price but the function it provides.

"Maybe I walked into this a little too fast, but they should have been looking after me," said one buyer. "I'm still interested in the place, but I want a fair deal."

It's your own job to look after yourself, investing is about responsibility and taking hard knocks when they come. How could they look after you? Fixing the market? No one ever complains when the make a profit.

Read Article here

The latest economic forecasts from the government of Alberta proves the province is an economic rock in Canada.

Some highlights include:

Alberta's population growth continues to outpace the rest of the nation

Increased crop production expected in 2008

Drilling activity picking up

Canadian Real GDP rises for the second straight month

Latest string of data paints a gloomy U.S. economic outlooks

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"The Alberta government’s low-tax and fiscal responsibility policies create long-term economic benefits for Albertans. Alberta’s international competitiveness and fiscal stewardship form a solid foundation upon which the Government of Alberta’s value-added strategy will accelerate the on-going diversification of the province’s economy."

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City's Psyche, like it's homes are undervalued - "Earlier this week, a national study determined that Edmonton house prices are eight per cent too low. This is an uncannily perfect statistic for anyone who seeks to understand the mysterious heart and mind of the Edmontonian."

"There is kind of a collective mentality. A malaise sets in, even if we have no intention of selling our house." Todd Hirsch, senior economist for ATB Financial

Edmontonians really have no idea what an incredible economic position they are in. The economic situation that Edmonton and Alberta are currently in is perhaps the healthiest economy in Canada.

After The Bubble Ghost Towns In America - "Since real-estate tanked, many new planned communities across the country are half-empty, with for-sale signs outnumbering residents by a large margin. Some of the projects abandoned by bankrupt developers are in places that were hotbeds of new housing construction: Southern California, Atlanta, Las Vegas, Phoenix."

Regions with economic fundamentals will weather the storm, but many other areas will continue to get worse. A 'general' correction of 25% is predicted and currently the USA is at about 15%, so in 'general' they can expect another across the board drop of 10% of house prices.

The Future Is Fantastic - "We strive at the university to really change lives with the kind of research we undertake -- whether it is in engineering, to find more environmentally friendly ways to extract oil, or in health-care fields, or in the social sciences,"University of Alberta president Indira Samarasekera

"She (Samarasekera) is confident that Edmonton can compete for talent with great academic centres such as Oxford and Princeton."

Attracting new students for an excellent education and the opportunity to influence international research is one way the university is helping to increase in-migration to the province. When these talented young graduates realize they can earn more money than anywhere across Canada they will make the province their home.

When the price and market is right the buyers will come. To investors who do their research it has always been clear that the Edmonton market is not unstable and prices aren't plummeting merely stabilizing. With so many listings on the market the pickings are plentiful and the prices are right.

"I've been run off my feet," "July was ridiculously busy and August has been ridiculously busy, and when it shows in the numbers, it's not just me.

"The stats show buyers are confident with the Edmonton economy. It's a large selection to pick from right now, and I think they don't foresee a drastic dropping of prices, so they want to get into the marketplace and buy.

"By the time we get through to next spring, we're going to have a far more reasonable listing inventory and we're going to have a far more balanced marketplace," Marc Perras, president of the Realtors Association of Edmonton

The investment deals we are getting are fantastic. Terms are more flexible and when you satisfy your sellers need they are more likely to meet you half way.