Even Tiger Woods Needs A Break

He is among the most successful and currently the No. 1 golfer in the world. His level of achievement is legendary. He is focused, highly skilled and can probably perform at this level for many years to come.




Like many super-performers he knows there are times to step back improve, re-tool your skills and evaluate your game. You just have to take the a break sometimes.

When he does nobody says, "He's done! Golf is finished!" They wait and watch him comeback new and improved.

That is what is happening in Alberta Real Estate. The global economy is wonky, oil prices dropped and the housing market was way over-heated. So the market cooled down, prices dropped and then regulated and the market became more balanced.

Edmonton, Alberta real estate is still a "Tiger Woods" area - super performer says Don R. Campbell of REIN.

"People need to be realistic,.....The last three years in Alberta have been the Tiger Woods years of real estate. No matter what you did, you won, but that can't sustain forever."

"Alberta still has the three things the world is going to need when the recovery hits. It has food, fuel and fertilizer and those are the things the world needs and needs in abundance,"

Look locally for the real news

My last post focused on negative media and find what the real story is behind the "negative- speak" headlines. Also make sure the articles are about your region and not a national piece, especially when it comes to real estate.

In 2007 Edmonton single detached home prices reached a peak at around $420,000 which was unsustainable and grossly affected affordability. In the second half of 2007 prices started to slump and stayed low for most of 2008.

Now Edmonton is starting its recovery from the housing slump earlier than the rest of the country. The city's real estate market is more stable and Edmonton will continue to lead the country in 2009.

While the rest of Canada faces further cooling in real estate prices Edmonton will remain solid and even see a price increase by the end of 2009.

"There's a lot of negative press going around particularly because they're using nationally aggregated numbers .........The national numbers don't mean a whole lot unless you're looking locally." Marc Perras president of the Realtors Association of Edmonton

4 Headlines

Just scanning the web today looking at the news for Edmonton, Alberta and the economic outlook for the province and the city. It's funny I found four headlines that would leave anyone baffled as to what is really going on. It just goes to show you have to research for your own opinion and if you are reading only one newspaper your information is going to be skewed.

1. Alberta's economy slower but still better than the rest of Canada: TD economist - "I think Alberta and the rest of Canada will do a bit better next year but probably in the case of Alberta only back to [growth of] about two and a half per cent. But that's consistent with what I said last year. A slowdown in growth but not a bust."Don Drummond, the senior vice-president and chief economist of TD Bank

It's positive shows that Alberta is leading the country in performance though everywhere there is a slowdown.

2. Confidence in Alberta economy waning: Survey - "Alberta companies are less optimistic than they were at the height of the province's boom, but most still believe their business will increase in the last three months of 2008, said the ATB Financial Business Sentiments Index."

Slightly negative but it's a survey so based on perception. I guess the Alberta companies missed the above article about the national economic slowdown.

3. Saskatchewan Advantage snags torch from Alberta - ".. it is how our neighbours in Saskatchewan feel as their economy lifts off; their quality of life remains something Calgarians and Edmontonions can only envy; and their premier travels across North America extolling the virtues of his province to obviously appreciative audiences.
By comparison we're stuck in an economic deceleration that is exacerbating -- not mitigating some of our most severe issues -- while raising new concerns about what the province's economy will look like when we've finished "readjusting."

Negative? So often it's hard to tell. The journalist does point out the Alberta has zero provincial debt and is a emerging global superpower. Saskatchewan will lead the nation in some economic areas but in no way has the economy that Alberta does. Beyond that between 2009 and 2012, Calgary and Edmonton are expected to regain first and second place in average annual growth.

4. Look up Calgary! Edmonton is the new powerhouse - "The TD Bank recently came out with a study that concluded if the Edmonton/Calgary corridor was its own country, it would today be one of the most successful economies in the world, second only to Luxemburg in terms of GDP per capita."

Positive! Imagine two cities in Alberta, Canada having one of the most successful economies in the world? It baffles the mind and puts Saskatchewan into perspective. I want to email this story to all the despondent business owners in Alberta.

Where Does Edmonton Go From Here

If you're in the Edmonton market and feel that it's going to bottom out, the prices will be halved and we've seen it all before then you are not looking at the big picture and you need to stop reading the newspapers.

I've seen so many articles talking about the incredible amount of listings on the mls.ca and private listing services but when you really think about prices didn't plummet as every pundit forecasted. In fact they leveled out a bit and now are holding steady at about 10.98% lower than last year. The prices rose 40% for single family residential homes from 2006 so we are still holding a 25%++ increase in values since 2007.

Take a look at this chart from EREB

	Single Family	Condo	All Residential
July 2006 Average Price	$303,304	$188,831	$256,489
Peak 2007 Average Price	$426,028	$271,908	$354,718
Price Increase	40.50%	43.99%	38.30%
July 2008 Average Price	$379,224	$253,850	$335,100
Decrease from peak	-10.98%	-6.64%	-5.53%
Increase over 2006	25.03%	34.43%	30.65%

Looks like a healthy market that is just adjusting to keep affordability in line - we used to be the 10th highest priced city in Canada now we are around 5th. Not overpriced and not undervalued as in 2006.

EREB predicts that the market will pick up over autumn and we will see an increase in sales which will cause the inventory to decrease and over time values to increase.

So basically this sale won't last for long! If you think you'll wait until prices "bottom out" to invest then don't hold your breath - who could predict that anyway? There are so good properties on the market with motivated sellers, it's a situation that won't last for much longer.

To see some of the investment deals we've picked up in this market click here.

Canadian Property Market Balanced

As a whole the recent cooling has balanced out the market of course as an investor your investment area should not focus on the national market but on one specific area.

"The property market in Canada is well balanced and prices should rise in line with general inflation, according to economists.

The market has moved from a strong sellers market but it is unlikely to suffer a serious downturn, economists from Scotia Economics say in a new report.

But there are significant regional differences. Former hot locations like Calgary, Saskatoon and Vancouver are now favouring buyers." Read Article

This And That

Business and Real Estate
How To Invest In Real Estate In The Alberta, Canada Oil Sands - "As a result of record high oil prices, mining oil from the sands of Canada has become a huge industry, which directly affects real estate in the region. This article will explain how you can invest smartly in the real estate of the oil-rich region of Alberta, Canada."

Great tips to get into this market especially now that there are so many deals.

$1.4B deal spurs construction on next leg of Anthony Henday - "We believe this road will actually handle the growth of the city, the population growth of the city, the traffic growth of the city for the next 30 to 40 years," Transportation Minister Luke Ouellette

We all know that improved transportation improves housing prices buy up to 20% in surrounding areas. We are already increasing our holdings in this area.

Edmonton's jobless rate 3.7 per cent - "Despite some of the softer economic numbers Alberta has seen over the past few months - weaker retail sales, lower housing starts etc. - the employment picture remains very bright."

"More than anything else, a strong labour market will support economic growth and consumer confidence in the second half of 2008." ATB Financial chief economist Todd Hirsch

Things will pick up in the second half of 2008 and we'll see some real gains in 2009.

Festivals and Fun - It's summer so why not?

Edmonton's Heritage Festival a cultural treat - "Edmontonians are in for a cultural treat this August long weekend at the 33rd annual Servus Heritage Festival at Hawrelak Park.

The event, described by executive director Jack Little as "the largest multicultural festival in the world in one physical location", runs from Saturday to Monday and features food, entertainment, and arts and crafts from 62 different countries representing more than 75 cultures."

Edmonton Festivals Add To Your Summer Experience -

Edmonton Folk Music Festival - August 7-10, 2008 - Location: Gallagher Park - For more information go to: www.edmontonfolkfest.org

Edmonton International Fringe Festival - August 14-24, 2008 - Location: Old Strathcona historic district - For more information go to: www.fringetheatreadventures.ca

For more information on our festivals or other Edmonton attractions check out www.festivalcity.ca.

Edmonton Has It Too!

"CBRE's second quarter 2008 report says investment sales volume year-to-date was $1.65 billion, compared to $2.2 billion for all of last year. The numbers show "continued investment confidence" in the Calgary real estate market, said Bruce Irvine, vice-president of business development and retention for Calgary Economic Development. " Click Here

The reason is Alberta and Calgary and, yes, Edmonton have great economic fundamentals. The article states that Alberta has "mojo" and is the shining star of the Canadian economy.

Funnily enough when talking to our Realtor and property manager (the on the ground team) the say the area is rife with pessimism and that many Albertans just can't see the Alberta Advantage. If you are someone that can see the advantage then you have a clairvoyance that can set you up for life.

Where others see crisis successful people see opportunity.

Alberta Wealth Sets Prices In Okanagan

When Albertans are looking for a recreational property they often go to British Columbia. The province's overflow of wealth has increased prices in the Okanagan area so much that until now there was multiple offers and double digit increases on recreational properties. Now that Alberta is cooling down so is this area.

"Alberta buyers are a very important part of our market, and not just southern Alberta, but northern Alberta as well," Rob Shaw, Vernon Realtor and director of Okanagan Mainline Real Estate Board (OMREB)

What that means is the beautiful Okanagan valley is also leveling out and becoming a buyer's market. Alberta's stellar economy is effecting the real estate market across Canada - from B.C to the east coast. People who have made their wealth in Alberta go back to their home province and buy their dream house.

Most importantly is to know when to buy where. Alberta is in a slow cycle and has leveled to a buyer's market, giving investors the opportunity to pick and choose their terms on an incredible selection of properties. When your Alberta property increases in value over the next 3 years, you can buy your dream house from the proceeds.

I'll Take The Bait

After checking my Google alerts it looks like the only thing in the news today is that people are leaving Alberta to buy houses in Eastern Canada.



"A serious influx of Western Canadian purchasers has bolstered housing sales in every Atlantic province. Tremendous job opportunities available in Alberta that allow commuting to and from the East Coast have served to further strengthen home-buying activity in the region. Last, but certainly not least, after living in Western Canada for many years, more and more Maritimers are returning home."Michael Polzler, Re/Max’s regional director

It is not an uncommon trend, look at real estate on the west coast where many of the buyers are Albertans looking for second homes or ready to move out of the blustery cold into a milder clime. A friend of mine who moved to the island (Vancouver Island) after many years in Calgary said all her new neighbours are Albertans. The funny thing (I want to write irony but I'm not sure this is a clear case) is that many British Columbians are moving to Alberta for the stellar wages and low taxes and we all know about the large maritime population in the oilsands as well.

One thing to be sure of is Alberta still boasts the highest income -- measured as gross domestic product -- per capita of any province and will continue to do so over the coming half decade. They may live where they like but Alberta is the place to get a great paying job.

Edmonton's 30 Year Vision

The vision of Edmonton as a thriving arts community, a clean environment, with big beautiful parks, a powerful economy and a unique look was compiled by over 2,200 citizens with a common goal in mind- Edmonton by 2040.

“We hope this vision will allow the flexibility, in those interim steps, to get to that point, but we should always want to get to that point,” “My assumption is that most (future) councils will want to make environment sustainable, most will want to have a good, multi-cultural community, they might have different steps in getting there, but they would still want to get there.” Mayor Stephen Mandel

Sounds like a beautiful place and I would love to live there in my, gulp, late-sixties.

In The News

Canada in the middle of a quiet oil boom -
"With oil prices hovering near a hundred dollars a barrel, there’s a major oil boom underway. It’s not happening in the sweltering heat of Texas or the dry desert of Saudi Arabia, but on the frozen Canadian tundra where oil producers are developing a new source of fossil fuel. It may seem like unlikely terrain for one of the biggest oil booms in recent memory. But Canada’s “oil sands” have helped make it the leading supplier to the United States." The amazing thing is that at 3 million barrels a day we have enough oil to last 400 years.

Numbers Tell The Truth- Count On It
"and what about climate change? Now there's a nice juicy topic for number crunchers like me. When it comes to the we're-all-doomed file, the spinmeisters have got a big hate on for Alberta's oilsands.

According to a recent front-page Globe and Mail story, the oilsands generate fully 25 per cent of Canada's carbon emissions. Except, well, they don't. In a subsequent correction, the Globe admitted the number was just eight per cent.

Now let's see. Since Canada accounts for two per cent of the global total, that means the oilsands generate between one and two tenths of one per cent of the worldwide tally. Horrifying, really." Climate change is important and Alberta is doing amazing things to reduce its emissions.

Wooing European Workers A Goal Of Mandel's Trip
Mayor Stephen Mandel is leaving Friday on an eight-day trip to Eastern Europe that he hopes will make it easier to attract workers for the booming local economy.

"It's to solidify some ties in Europe with Edmonton so we not only have opportunities for trade, but also recruiting labour," he said today.

The only thing slowing oil sand production is a lack of labour.

What an area to be investing in!

Do You See What I Mean?

This is taken from Star Publications of Malaysia.

"WITH crude oil hitting a record price of US$108 per barrel recently, the search for oil and gas has been more intense than ever due to its high profit margin.

In recent years, investing in the extraction of oil from sand or oil sands is gaining popularity because of the strong demand and high prices of oil.

It was reported by Time Magazine in a recent article that second only to the Saudi Arabia reserves, Alberta's oil sands deposits were described as “Canada's greatest buried energy treasure,” which could satisfy the world's demand for petroleum for the next century."

So that brings the countries investing in Alberta to France, China, Norway, the Middle East, America, Japan and now Malaysia. They see something that is a sure bet with the price of rising and demand constantly increasing.

Read more about Alberta's HOT economy Click Here.

Edmonton Has Fat Coffers

The city had a budget surplus of $34.4 Million in 2007. Some of the excess funds are planned to go to infrastructure, a new sports complex and other projects.

"I know it's frustrating and I don't blame the public. I don't necessarily disagree with their position either, but sometimes it's hard to guess 365 days in advance what's going to happen." Mayor Stephen Mandel

Maybe we can get a rebate?

All The Brains Are Heading To Alberta

New Statistics Canada figures show that along with tradespeople, there is a huge surge of post-secondary school graduates choosing Edmonton over trendy spots like Montreal and Vancouver. Why because smart people go where the money is!

In Vancouver you can spend close to 70% of your income on housing, Montreal you can get a job but pay higher taxes than you would in Alberta.

Or you could chose Alberta with the lowest taxes in Canada, highest salaries and enjoy quite good housing affordability.

No wonder over 160,000 people have moved to Alberta over the last 7 years.

With a higher quality of life and virtually limitless opportunities Alberta is where young smart professionals are choosing to make their home.

The West - Canada's Life Jacket

Incredibly strong markets in Western Canada are keeping Canada's real estate markets buoyant even through America's housing slump.



"We expect construction, sales and price gains to moderate in 2008 due to decreasing affordability, especially for first-time buyers, and some softening in domestic economic conditions associated with the intensifying U.S. slowdown and persistently strong Canadian dollar,"Adrienne Warren- Scotiabank senior economist/ author of Real Estate Trends Report

In what is the strongest and longest postwar housing boom cities like Edmonton and Calgary are keeping the market strong and in good condition. Although both cities saw affordability drop slightly the current balancing out of the market in 2008 will bode for good deals for buyers and price increase in 2009.

Reduce Your Sale Time

P.J Wade of Realty Times interviewedDr. Paul Anglin, currently a University of Guelph's Associate Professor of Real Estate and Housing in the Department of Marketing and Consumer Studies in the newly-created College of Management and Economics.

His three year study used listing information provided by the Windsor Real Estate Board. With data from more than 20,000 houses, including those that did not sell, Dr. Anglin's resulting study, entitled "House Prices and Time-till-sale in Windsor," attempts to quantify the trade-off between time on the market and sale price as a reflection of selected list price

The study revealed (on average)over a 3-year period:

* Smaller houses sold faster while increased time-til-sale (TTS) was the case for properties with 5 or more bedrooms.

* Bungalows and side-splits sold at the same pace, but condominiums, ranch-style and "rental" properties took more time.

* TTS differed significantly by location while properties outside the City of Windsor consistently had longer TTS.

* Descriptive remarks on the listing form had the following effects:


* The words "beautiful" or "gorgeous" reduced TTS by 15 percent and "beautiful" houses sold for more. "Landscaping" reduced TTS by 20 percent and "move-in" condition did so by 12 percent. However, "must see" and "vacant" houses apparently had no statistically significant effect.

* Houses identified as "Starter" homes sold in 9 percent less time, however, "Handyman Specials" sold approximately 50 percent faster. "Rental" properties were on the market 60 percent longer.

* Seller intent described as "motivated" or "must sell" were associated with a 30 percent increase in the average TTS while "moving" had no statistically significant effect.

* Following the research statistic "Degree of Over Pricing" (DOP), which measures the difference between the list price chosen by the seller and the average list price for that type of house, the DOP of unsold houses was roughly 4.5 per cent higher than those which sold."

Read P.J Wades Article Here

From Comment To Post

I got this comment on my blog a few days ago.

"....That aside, I don't know how you can suggest that Edmonton is going to have massive price increases. Considering there is already loads of inventory, concerns about low gas prices, lack of affordability, wages have not kept up with house price increase, rent vs. buy economics are in favour of renting and brutal investor rental property P/E ratios. Really, why should someone buy? Come on and quit lying to us about further price increases.

By the way, Calgary house prices have NOT lifted out of a plateau. They have declined for past three months losing about $33,000 from their peak. Stats are at www.bobtruman.com

This is more like 1984 than 2004 with real estate agents STILL claiming massive price gains. The economic climate has changed as mentioned in my previous post. So quit equivocating what happened in 2004 to what is going to happen in the next year." Dustin



I think it is a common question/fear people have. My reply turned into a 4 page simple outlook of the Edmonton and Calgary's real estate markets and Alberta's economy.

Hello Dustin,

Thanks for sharing. In summary what I'd say is that, without a doubt the Edmonton and Calgary markets will continue to rise steadily overall in the next 5 years plus. Yes, there may be months when the prices dip and months when they climb quickly up. A healthy market has these peaks and valleys.

Look at the graph for Calgary below, it's not a straight line up... nor is it a straight line down. With over $173B+ of projects already underway or committed for the next decade- you bet the growth will continue, Alberta has a population of only has 3.4 Million people and the highest growth rate, youngest population in Canada. Did you know that Alberta is estimated to grow by 80,000 people per year for the next decade?

Check out this link at the UOA regarding population.

http://www.uofaweb.ualberta.ca/govrel/news.cfm?story=57892

Are people leaving Alberta for sunnier shores? Yes, well you got me there... A whopping 800 people left Alberta for Saskatchewan this year. (At least those Saskatchewan billboards paid off)

The housing market it strong and that strength is based on the economy: the long-term view of it.

Alberta Job & Economic Fundamentals Updates:

• The construction jobs are a coming!

• The forecast for construction jobs in 2010 for proposed capital projects are 37,000.

• Current project construction jobs now are at approximately 17,000. This is an increase of more than

100%, over the next 3- 5 years, and currently the Alberta labor market is already the tightest in Canada.

This is a good indication of the housing demand, as more people are coming to Alberta for work. Each

of these people will require a place to live and rent.

• To top things off Alberta still has the lowest unemployment rate in the country.

Alberta Industrial Heartland:

o Alberta has the 2nd highest reserves of recoverable oil in the world.

o Currently $173 Billion of capital projects are scheduled for Alberta.

o The proposed peak expenditure is scheduled for 2010 – 2012, and this timeline is potentially moving

out further, due to the current shortages of labor.

o Pipeline and Oil upgrader projects are numerous and will attract multi billion dollar investments.

o Currently there are at least 7 oil upgraders proposed on the books and each one of these is forecasted

to have at least 3,000 – 5,000 jobs. To put this in perspective, building the Hoover Dam in Nevada

required approximately 4,500 construction jobs. Currently there are over 7 ‘Hoover Dam sized’

projects forecasted to be built just outside of Edmonton.

US Subprime Mortgage Collapse

• In the news you have been hearing a lot about the US sub-prime mortgage collapse and how that is affecting

the stock market.

Comparing the US and Canada mortgage markets are like comparing apples to oranges, for

example:

• US- sub-prime (high risk) market represents over 20% of all mortgages.

• US- interest only mortgages (high risk)are a high percent of subprime mortgages.

• Canada’s Subprime mortgages are still below 4% of all mortgages.

• Canada’s interest only mortgages are below 2% of total mortgages.

All of these economic fundamentals (just a few of many I could have included) indicate that people

are coming to Alberta and the fundamentals are all pointing towards strong long term demand for

Real Estate.

Hope this helps!

Calgary Real Estate Market Overview

INVENTORY HITS HIGHEST NUMBER FOR 2007

Calgary’s total MLS® month end inventory for the month of August 2007 was 9,634, showing the highest level recorded this year, according to figures released by the Calgary Real Estate Board (CREB®).

Single family Calgary metro new listings added for the month of August totaled, 2,837, a 9.75 per cent increase over the 2,585 new listings added in August 2006. This is an increase of 11.34 per cent over the 2,548 new listings added in July 2007.

Single family Calgary metro properties changing hands in August were 1,314, a decrease of 2.01 per cent from the 1,341 recorded in August 2006 and a decrease of 12.10 per cent from the 1,495 sales recorded last month.

The median price of a single family Calgary metro home in August 2007 was $430,000 showing an 11.40 per cent increase over August 2006, when the median price was $386,000 and showing a 1.15 per cent decrease from last month when the median price was $435,000. All Calgary Metro MLS® statistics include properties listed and sold only within Calgary’s City limits.

The Calgary metro condominium market showed a slight decline in August with new listings added totaling 1,186, an increase of 22.65 per cent from August 2006, when the new listings added were 967. This is a 6.18 per cent increase from last month when new listings added were 1,117. Calgary metro condominium sales in August 2007 were 598; a decrease of 11.93 per cent from August 2006, when the sales were recorded as 679 and a 0.83 per cent decrease form last month’s sales of 603.

“Our inventory has remained high through August; however, total MLS® sales have stayed fairly constant with a drop of only 4.2% from July. The market has shifted slightly to out of town properties and although the average sale price of single family homes in Calgary has dropped by about 3.9% from July, the median price has eased only 1.1% from July. Together it’s an excellent market for buyers and sellers, with sellers getting good prices for their homes and buyers having an excellent selection to choose from”, says Ron Stanners, President of the Calgary Real Estate Board.

The average price of a single family Calgary metro home in August 2007 was $485,914, and the average price of a metro condominium was $320,790. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differentials between geographical areas.

Source: Calgary Real Estate Board

Calgary real estate price increases:

Average Calgary Real Estate Prices for last 13 months

Average Calgary Real Estate Yearly Prices for 1985 to 2007 YTD

Please note - statistics reporting changed in May 2007 - comparing present data to data from before May 2007 is not accurate for the 2 graphs directly above.