U.S. Mortgage Meltdown Is A Minor Inconvenience

The U.S. sub-prime mortgage fiasco is just a blip compared to the economic disaster that is coming for Americans. The U.S. government is going trillions and trillions of dollars into debt. There is the war. There is the recently announced rebates for all 300 million Americans. There are hundreds of billions in bail outs of privately owned banks and corporations. The list of unnecessary expenses is lengthy. More than half of all generated government income (mostly taxes) is being used just to pay interest on this debt. Current trends continuing, it will eventually be all of the governments revenue. Then what? Banks only lend money based on collateral or security. In the case of government borrowing, the taxpayer is the collateral. The contracts that are struck between banks and governments include a provision to raise any and all taxes necessary to satisfy the debt. In other words, when the lenders decide they want their money back, the government will comply with the burden being on its citizens. When that time comes, Americans will wish for the easy days of the sub-prime meltdown.

Go West Young Man

Scotiabank released an economic report this week. It mentions that the western provinces are driving the national real estate trends. This is not surprising. As we all know, easterner's have been flocking here for years, and there is no end in sight. Work BC is holding four job fairs in southern Ontario over the next week. The organization, made up of BC's top 100 employers estimates there will be 1 million new jobs to fill over the next 10 years in British Columbia. Alberta isn't far behind in these expectations, and Saskatchewan's demand is rising as well. The report also finds that the last decade of real estate cycles is the strongest and most sustained in history. These trends should be just as strong for another 10 years. The report states that we are not in over our heads and have little to be concerned with in regards to the U.S. mortgage meltdown. Only in Western Canada eh?

Using a REALTOR is an easy choice

"If knowledge is power, then a realtor is the most powerful professional ally you can have when it comes to selling or buying your home" according to the Canadian Real Estate Association.
When you’re searching for a property you wish to buy, the first obvious advantage of utilizing a REALTOR is that usually they can efficiently find suitable properties or "listings" for you to consider. REALTOR’S apply knowledge of the market together with computer technology. A realtor can also provide you with selling prices of the types of homes you are interested in. There is plenty of information available about the asking prices of properties. However, for actual selling prices of comparable homes, which are key, a realtor is the best source. If you aren't fixed on one location, a realtor can give you advice as to which locations are best from the point of view of future appreciation potential. Different locations and properties vary greatly in this respect.
One would think that buying or selling a property should be fairly straightforward most of the time. However, most every transaction seems to have a new twist or problem to be dealt with and resolved. That's one reason having a professional REALTOR on your side can be an enormous asset. One of the most nerve-wracking areas is the negotiation of price and terms. Experience has found that having the buyer and seller negotiate face-to-face is often disastrous. A lot of money is at stake, and the naturally high emotions can overwhelm the facts and create obstacles to finding a win-win agreement. The process works much better with a good realtor providing advice and passing information back and forth during the negotiations.
In Alberta, a purchaser gets their REALTORS help for free, so it's probably wise to take advantage of this fact and use their services. Besides helping you with searching for properties, with evaluating the pros and cons of specific properties, with negotiating favorable price and terms, and generally providing advice to help you make informed decisions, a REALTOR can also orchestrate the many details of a real estate transaction as your advocate. There are numerous advantages of working with a highly trained professional…a REALTOR, an easy choice.

Home Smart Home

More homeowners are embracing technology to save energy, thus saving money. Lets look at smart homes. A smart home not only reduces energy costs; it greatly increases your family’s comfort and safety. Just imagine leaving your home in the evening. You place your system in "away" mode and your interior lights gradually turn off, your exterior lights automatically turn on to show you the way out and your thermostat is placed in conservation mode awaiting your return. Or imagine reviewing via the web who has been in your home, and when they arrived/departed (Having two teenaged daughters, I love this feature) You can monitor carbon monoxide, freezing, water leaks. Minimize your consumption of electricity and heating fuels, lights are automatically turned off when not needed. Be notified via page/email/phone when children arrive home. The possibilities are endless! I won’t get into the luxury & convenience the entertainment capabilities have to offer. The bottom line is, a smart home saves you money and enhances your lifestyle. Having to live through Alberta’s long cold winters I say… bring my home to life!

Strong dollar has affect on Real Estate Market

Four years ago an American could purchase a newer 1700 sq.ft. 2 storey house in Edmonton for $130,000 USD, $200,000 CDN. Today, the same home is $475,000 with either currency. This obviously has an impact on real estate demand. For this to happen over such a short period of time has made it unattainable for the average American. Much the same way that booming prices pushed a whole whack of local buyers right out of the market. The strong dollar combined with a struggling U.S. economy and a volatile stock market has made a lot of people nervous to do anything. These are all natural fluctuations in any marketplace. I have the wait and see attitude.

Are opinions really a dime a dozen?

They say opinions are like belly buttons...everybody has one. When it comes to real estate forecasts you could probably get a dozen for a nickel. The kind that really bother me the most come from non-industry armchair quarterbacks. I've seen investors abandon the very market that has enabled them to retire early because their brother read that real estate is going nowhere but down. Opportunity lost, thanks to brother Bob. I have two suggestions...To the person with the dreams and the desire: talk to a professional. To Bob: please do not give unqualified advice, whether that be financial, medical, legal, etc. Do I really expect to stop people from communicating their opinions? No. People will always have a bellybutton...mine's an innie.

Could U.S. subprime meltdown happen in Canada?

Put simply, yes and no. We have mortgage insurance in Canada, and this is law. American regulators put very few limitations on who can borrow mortgages. It is significantly more difficult to obtain a mortgage in Canada however, if our real estate value drops for any reason, (including economic meltdowns elsewhere) sellers could find themselves selling for less than what they paid. If the situation is long term, we would see people that are considered 1st class borrowers walking away from their homes. This is not a likely scenario, but it could happen. Particularly, when you see the ineptitude of the governments, financial institutions and investment firms that cause and allow economic meltdowns to occur. These outfits should be our biggest fear and they should be under more scrutiny.

Realtors give back

We wrapped up our annual Realty Executives Polar Bear Dip this weekend. We raised $19,000 for the Food Bank. Thank you to every realtor who took the plunge in 6C water at the Royal Glenora Club. Thank you to every donor, Edmonton is a warmer place because of you all. Being a member on the Internal Advertising Committee for Realty Executives, I've seen first hand what a difference can be made when we donate our time, money and effort to people in need. Realtors have made a lot of money during these boom years in Alberta. They have also given a lot back to the community. This is usually done out of gratitude. The list of charities and causes we support is lengthy, but when a realtor is willing to freeze his/her jewels to feed the hungry...that's giving!

Investors should strike while Iron is hot

We are all aware of the term "buy low and sell high". We are in a buyers market and the prices are as low as will ever be again. Some sellers are accepting $30,000 or more under their asking price. If the market value of the property is in line, that is immediate equity that you can pick up. Arrange for a long possession date or rent it out for a few months, and you should realize a nice profit within a year. Not a lot of effort or risk exists. There will however, be a short window of opportunity so don't let the bird of paradise fly up your nose. Just do it!

Jobs galore will help spike market

It was announced this week, three international oil industry giants will move full speed ahead in northern Alberta oil sands development despite rising costs and increased royalties. Wasn't it reported a few months ago the royalties were going to destroy the oil sands? Total E&P Canada (H.O. France) will spend $10-$15 billion over the next few years on an Edmonton area upgrader and new mines, requiring 1,500 new employees. StatoilHydro Canada Ltd. (H.O. Norway) plans to do 200,000 barrels of bitumen a day in a Fort Saskatchewan upgrader. Marathon Oil (H.O. U.S.) is planning on quadrupling production of refining and is spending billions here to achieve it, and this is only the beginning. It's estimated that 100,000 new jobs will need to be filled over the next 18 months in Northern Alberta. All of these new faces will need new places. So the sky is not falling, on the contrary...it's going to be a bright, bright, sunshiny day.

Where have all the buyers gone?

Well actually they never really left. We are selling just as many properties on a month to month basis as anytime over the past couple of years. The problem is, we have four times the inventory as we had last spring, meaning 75% of the listed properties since spring '07 did not sell. Likewise, it is my guess that 75% of sellers did not need to sell. This has a heavy impact on sellers that do need to sell. (Please do not go and burn your neighbours "For Sale" sign because you know he's only "fishing" for an outrageous price). In the first couple of weeks of 2008 we are again listing at an overwhelming pace. Zone 91 for example (Spruce Grove & Stony Plain) have over 80 new listings against 13 sales. How many even get showings? How am I supposed to sell my clients homes? hmmm... I think I've got some gasoline in the garage.

Welcome!

Lisa and I would like to welcome you all to our blog. Before today I didn't know what a blog was. Lisa is the brains behind our operation and after much explanation she got me to understand. Lisa then convinced me to write them (I told you she was smart). So here we go. We will try to be timely, effective, insightful and helpful hosts. We hope that you will enjoy our perspective and experiences. I have to go now, Lisa needs to explain another Internet marketing tool to me. See you soon.