Penhold and Springbrook Real Estate Update:Saturday May 31 I had the pleasure of speaking to the attendees at the community breakfast. There were approximately 60 residents in attendance. The topic of discussion was that of an economic update with myself being asked to give a Real Estate update. I'm always happy to discuss real estate and changes in the market place with home ownes so I enjoyed the opportunity to do so. The house prices in the area have risen substantially over the years. Our data from the MLS board goes back to 1989. Back in 1989 the average house sale price in Penhold was $57,071. Springbrook was still operating as CFB Penhold. Penhold was and still is an affordable alternative to the larger City of Red Deer. Red Deer's average sale price in 1989 was $95,459. Jumping to the first recorded MLS sales data for Springbrook in 1997, the average home sold for $61,425 in Springbrook. At that time the sales consisted of townhouses and half duplexes. Penhold's average sale price of houses was considerably higher at $86,432. Still more affordable than bigger brother Red Deer. Red Deer's average sale price for single family homes in 1997 was $131,499. In 2000, sales and new development were occurring in Springbrook, as we entered into a prosperous new Millennium. Springbrook's single family homes sold for an average of $112,777 in 2000. Very close to the level of the more established Town of Penhold's average house selling price of $115,257. Again Red Deer maintained that $40,000 difference with sales average in 200 reported at $157,993. So from 1989 to 2000 or the 90's, house prices in Red Deer climbed 65%. This is pretty substantial growth during a time when we were not in experiencing a "boom". Penhold's prices doubled over that same decade (101.95%). For the whole story please visit my blog located here. You can subscribe to updates to my blog by clinking here: Patrick Galesloot
I have a Sump PumpThis house has a sump pump, is that a good thing or bad? What is a sump pump and what is it doing in my house? Common questions that I have heard from buyers. Depending on the age and location of your home you may have a sump pump. A sump pump is, a pump that moves water from a basement sump pit. Ok a sump pit is...? A sump pit, commonly found in the home basement, is simply a hole to collect water. The water may enter via the perimeter drains of a basement waterproofing system, funneling into the pit, or may arrive because of rain or because of natural ground water, if the basement is below the water table level. Below the water table??? What the?? Ok don't panic. The water table in central Alberta is High. Higher than in other areas, and if you have lived in a house in Central Alberta I would venture a guess that you had or have a sump pump. You will find homes with sump pumps in just about every neighborhood of Red Deer, Sylvan Lake, Blackfalds, Springbrook, Penhold, and Innisfail. I could name more but I might as well say "Central Alberta". They are common and no cause for alarm. For more on the Sump Pump situation see my Real Estate Blog. Your Friend in Real Estate, And yes I have a sump pump :-) Selling in May have you calling out May Day??Frustrated selling in a buyers market? Understandable emotion. Perhaps a more closer look at the weekly stats, and market place numbers and comparing them from 2006 to now will help. In Red Deer, May was/is , and not your typical movie fare, but when it comes to new listings 2008, is a block buster of a year. It wasn't that long ago we were in a heated seller's market, we only have to look as far back as 2006. Then we started transitioning out of that frenzy in 2007 to today's buyer's market. Each market has it's good points and bad depending on the side of the transactional fence you are sitting. For those sitting on the selling transactional fence it can be tough pill to swallow. many are scratching there heads wondering what should I do, or what can I do to sell my house. Sales are still strong this year there is no doubt about it. Interest rates are quite low and despite the sub prime crisis south of the border many Canadian buyers are still able to take advantage of buying zero down. I you are buying today you have much to be thankful for. I think it's important to look at how we got to where we are with this increase in inventory otherwise known as excess supply in the supply an demand world of economics. In 2006 the weekly market of new listings and those being sold had a very narrow gap. Often the number of homes sold surpassed new listing coming onto market. In the height of things at least two buyers were available for every home. The average home owner (looking to own a home to live in) and the speculator (buying for an opportunity to sell for a quick profit). To read more complete with statistical graphs visit my real estate blog, click here, Your Friend in Real Estate, Patrick Galesloot April open for business and business was...Good. Sales were down from record 2007 sales volume, but well above 2006 numbers. Here at Century 21 Advantage, we led the way with listings sold in Red Deer. Out of the 220 properties sold in April Century 21 Advantage sold 56 which is a little over 25%. How does this compare to what the market is like or what is every one else doing? Well today we see a total of 785 properties available in the City of Red Deer with 70 of those with conditional offers. That is great selection for buyers, and increased competition for the sellers who are striving to be part of the 220 sold. The number of sales is down from the 242 in April 2007 (-9.09%). We expect the story of increased selection for buyers to dominate the real estate landscape here in Central Alberta for some time. We are still in a buyers market, and what a buyers market it is. Now is a great time for people to buy. Interest rates have decreased a full point since early March. Oil prices and crop prices are high creating economic conditions favourable to those industries. The products available for buyers 25, 30 and 40 year mortgages are readily available as well as there still are zero down mortgages available through CMHC. The vacancy rate is less than 2.5% in Red Deer which is great for investors. So if you are buying you can buy with confidence in my opinion. You have the luxury of selection, low borrowing costs, and negotiating power. The sellers should not be in a panic however patience and grounded expectations should be the norm. 2007 sales volume was a record, we may be down but we're far from out. April Sales volume comparison: 2006: 176 properties 2007: 242 properties 2008: 220 properties More on the Red Deer Real Estate market please visit www.patrickgalesloot.com or my Red Deer Real Estate Blog Tax Increase on the horizon for City of Red DeerThe City of Red Deer is in the midst of a growth spurt. Through the 90's they like many communities the city held the line on taxes. Now with increases in population and further pressure on infrastructure and City services, Red Deer is facing a tax increase of up-to 7%. Quite a hike compared to other increases we face, but a needed one for long term prosperity. I don't think anyone likes to see increases in taxes, and especially not a 7% increases. I'm surprised cities are not embracing municipal legislation that limits the annual increases to a function of cost of living or other rates. It's popular to decrease or not increase the taxes, but at what price. A ceiling on increases such as the cost of living plus 1 maybe an option or simply not to exceed 5%. Puts added pressure on councils to be more creative or manage not just for today or their term but for the future. More on this post click here: Your Friend in Real Estate, Patrick Galesloot
Red Deer getting GreenerRed Deer is divided by the Red Deer River which creates are lush attractive parkland community. Not to sit by and let this precious resource by squandered. The City of Red Deer recently approved measures to conserve water.Council moved the following bylaws this week. "That Bylaw 3215/B-2008 be read a first time. (Proposed amendment to the Utility Bylaw. Requirement for Low Flow Plumbing Fixtures for new construction or renovation projects that require a plumbing permit for a residential, commercial, industrial, or institutional structure)." The Council also set up a rebate program for residences to switch form older higher water user toilets to more efficient models. "Resolved that the Council of the City of Red Deer after considering the report from the Environmental Initiatives Coordinator, dated April 11, 2008 Re: 1) Utility Bylaw 3215/98 - Amendment 3215/B-2008 - Requirement for Low Flow Plumbing Fixtures / 2) Toilet Rebate Program, hereby establishes the residential toilet rebate program, to commence July 1, 2008 with rebates of $50 for a 6 litre toilet and $100 for a dual flush toilet." You can find all the council minutes at the city's website www.reddeer.ca. What affect does this have on you and I in our home? The number of people asking about energy efficiency has been increasing every year particularly in new homes. The average home buyer and owner has been focused on heating and improving or lowering their respective energy bills. If you have been considering a renovation of your bathroom I would encourage you to not only update the look and style of your bathroom but also include efficient fixtures such as the low flow toilets mentioned above. The new toilets not only will reduce water bills for the home owner but also provide home owners with a new fixture which is both attractive and low maintenance compared to that big 1977 tank. Updating your home attracts more buyers in the future and makes your home more likely to sell. Low bills, increased resale potential, is great for all. Your Friend in Real Estate, .50% drop in Interest rates...means to youToday's announcement was a big one when it comes to decreases in the lending rate. The Bank of Canada reduced its benchmark lending rate by a half-percentage point to 3.0 percent. This is the second time in a row, the Bank of Canada has cut the overnight rate by 50bps, bringing the target rate to 3.00%. This is the first time since 2001 that the Bank has seen fit to cut rates by a full percentage point in just six weeks time. While interest have been low for a long time the additional decrease means that the average home owner and purchaser will save considerably. If your mortgage is coming up for renewal you have an opportunity to reduce your mortgage payment or the amortization with the decrease in interest rates. It also means that more buyers can qualify. It's no secret that housing costs have risen dramatically while lending rates have slowly crept up. This significant drop in interest rates allows more people to qualify than before. See the example below: Mortgage principal of $300,000 at 5.75% interest rates your payment would be approx. $1875. With a .50% reduction the same $300,000 at 5.25%, your payment would be approx $1787. That same $1875 at 5.25% interest rate would actually increase your borrowing ability form $300,000 to $312,892. That's a 4% increase in buying power! A brief look at the market for February saw an increase in listings, listings sold, as well as the average house price. With the average price of a home being $368,172, for the month of February, and there was 115 Single Family Homes sold. The average list price was $374,862. More in depth analysis of the market to follow. However it appears that we have all gotten used to higher house prices and they are not dropping drastically and in many cases not at all. With more affordable borrowing costs the average buyer has more buying power, and that is a good thing. Combine this with the increased spring selection and now is a great time to find the home you've been looking for. If you were pre-approved in February and have slowly been searching for your next home, it's probably a great time to revisit your bank and talk about interest rates. For more on the bank of Canada visit: http://www.bankofcanada.ca/en/index.html Your Friend in Real Estate, Credit Cards, the free gift effectWe walk by those "Enroll now and get a free gift" credit card tables all the time. If I have all those department store cards, how does that affect me? Does this "potential" debt capacity matter? What if I never use them? I just signed up to get the free Hockey Jersey or other "Free Gift". The question back to you or I is, are you using them? Are you carrying a balance? At the end of the day it all adds up. If you are carrying multiple balances and multiple minimum payments this can affect your mortgage application. My advice would be get rid of all the little cards and just keep the necessity ones. How many credit cards are too many? This is a tough question to answer, because there is no magic number of cards one should have or use. A good rule of thumb is to keep it between two and six cards. Having multiple cards can help you keep your credit score at a higher number. For example if you are looking a purchasing new furniture, and the cost for the furniture is $2000. If you have 2 credit cards with a credit limit of $2000, you are better off splitting the cost onto the 2 cards to keep the balance from getting close to the limit. Having the balance below 60% of your credit limit will help keep your score strong. If I have a Sears, Bay, Wal-Mart, Home Depot, Peoples, Esso, and Petro Canada Cards am I a higher credit risk because I have these cards? Having multiple department store cards does not necessarily put you in a higher credit risk category. If all of these are cards that were applied for at one time and it was in the last year, chances are You credit score took a bit of a hit. Having new credit cards reporting on your credit bureau can lower your score, as your score is calculated based on payments made over time. If you have a new department store card that has only been open for 2 months you will not have a repayment history with that credit company yet. One thing to watch with department store cards is make sure your payments have been made on time, every time. I have seen so many instances where a company will put a late payment on your credit report for paying 1 day late. This could be the payment was made with internet banking on the due date but the payment took a couple days to get to the credit company. Obviously, late payments are not what you want on your credit report. What If I filled out the application for the "Free Gift" but never used them? Free gifts are nice but be careful when you do this. Applying for department store cards can take up to 20 points off your credit score. If you have credit cards on your report that are not being used, you are not showing a repayment history, which could hold back your credit score a bit. So, is that free Calgary Flames T-shirt worth it? Thanks again to Scott Bourke at Regional Mortgage for assisting in answering. You can reach Scott at Regional Mortgage in Red Deer 1- 866-343-1125 or online at www.regionalmortgage.ca
Your Friend In Real Estate, Your Credit Score and YouWhen working with buyers the question will come up have you spoken with your bank about whether or not you are qualified for the price level you are shopping in? This can be a conversation that happens at one of our first meetings and really it should. The challenge can be the buyer may be reluctant to part with this information until they get to know us, or simply they just don't know. The first step in your buying process should involve a consultation with a mortgage specialist. I recently had an opportunity to speak with Scott Bourke a Mortgage Specialist with a local Mortgage Broker here in Red Deer, Regional Mortgage. The interview is below. I was specifically interested in credit for this interview. Scott, I'd like to ask you about credit scores. Often we here terminology or phrases such as "good credit" or "bad credit". Can you give me examples of what a good score is and a bad score and what makes that up? First, Your credit is based on a point system that is calculated based on your repayment history, and usage on your current credit (loans, Credit Cards, and Line of Credits). A "good credit score" is usually around the 600 point mark, and above. Usually, if you are under that 600 mark you have some blemishes on your credit, for example, Maybe you have some late payments on some loans or credit cards. It could mean you have a collection outstanding on your credit, or your credit balances are close to or over your credit limit. Over time I can improve my score by? The best way to improve your credit score is to make your payments on time, and try and keep your amounts owing on revolving credit (credit cards) at about 60% of the limit. For example if you have a credit card with a $1000 credit limit try and keep the balance around the $600 mark if you need to carry a balance. The closer you are to your credit limits will result in lowering your credit score. Also try and stay away from applying for too much credit, too many enquiries could also lower your score. What are the benefits to having a good, better or best credit rating for me when I apply for a mortgage? Your difference in score will really help you when you are applying for a mortgage because the better your score, the more banks that will want to have you as a customer. If you are under the 600 mark, that takes away a lot of the banks that are looking to lend you money. It also makes it a little more difficult to get insurance on the mortgage (required if you have less than a 20% down payment). If you are at the 680 mark, every bank wants you and that will give you a lot more options. Also if you are under the 600 mark, you could be looking at higher interest rates or insurance premiums. What happens if I want to buy a house with my spouse and I have "bad" credit and she falls under the "good" credit category? This is a really tough question to answer. The lenders will usually look at the higher income earner and most of the weight will fall on that person. If the higher income earner is the one with the good credit, they should be able to still qualify for a mortgage with discounted rates and fall within the insurers guidelines. If the higher income earner is the one with the poor credit, we could be looking at higher interest rates, or have to work on getting the credit fixed before proceeding with a mortgage. What is the benefit for me in monitoring my credit score an how do I do that? The benefit to monitoring your own credit score would be, to understand what is going on with your credit and payments. It is also good for you to check your credit once or twice a year just to make sure that there has not been any credit fraud against you. Check for credit cards that you did not apply for or loans that are not yours. You can check those by visiting Equifax's web site at www.equifax.ca. Enquiries that you pull yourself do not effect your credit score. What is the most common credit score or rating that you come across and can you describe what type of person that would be? The credit score that most people have is in the 650 to 750 mark. These are people that have made their payments on time have a couple credit cards maybe one of the cards is getting close to the limit, or a new loan that they just received. If you can get, or keep your score at a 680 mark, that is where you would like to try and keep it. Thank You If you would like to see more Q&A on real estate I'd be happy to look into them for you. I trust this helps answer some of the questions you may have regarding credit and what it means to you. Thank You Scott for your help. Your Friend in Real Estate, Patrick Galesloot Does owning a "Green Home" matter??I been thinking more about this "Green" housing. I started wondering does owning a "Green Home" matter? Actually, yes it does. Not strictly as an environmental good thing but for day to day living and increased equity I think yes putting green initiatives in your home make a difference. From a selling stand point should you change the furnace out? Looking at it from a buyer stand point, most would not pay more for a home with a newer furnace (mid efficient), however they would want to pay less for a home with an old furnace. That is to say a buyer would use the old furnace as a reason for them to pay less. Justify their low offer so to speak. In a sense a buyer would want the seller to have done the work and invested their money in a new furnace, and upgraded insulation etc... rather than see it as an opportunity for themselves to increase their long term equity position. Other "Green" aspects that buyer wants in a home?
What green initiatives would you like to see on your home or your next home? Your Friend in Real Estate Some Green Resources:
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Patrick Galesloot Red Deer, AB More about me… Century 21 Advantage Office Phone: (403) 346-0021 Cell Phone: (403) 357-9142 Email Me
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