This month I touch a bit on the market, the economy, an interesting condo transaction, money found in the walls of a home in Edmonton, renovation rebates, gift card give-aways and the bull foreclosure market.
We have not seen this many January sales since January of 2008. Prices? Single family homes remain below five-year averages. January’s numbers are HERE
Benjamin Tal Chief Economist at CIBC World markets spoke at the Edmonton Real Estate Forum in January and had some interesting things to say regarding a silver lining to our current recession and Covid predicament. In brief. This Covid recession is unlike any other. Recessions typically start with a slow down in production which affects the demand for goods and services. This recession starts with the service industry. Why does this matter? From a bird’s eye view, the service industry makes up approximately a third of the Canadian economy. Most of the workers are low wage and tend to rent rather than own. So, although this recession is incredibly painful for some, this pain is acute and specific to this demographic in our economic framework. Those not employed in the service industry, having no opportunity to spend money on travel and leisure are now sitting on greater amounts of disposable income to be spent.
Knowing this, I am no longer surprised at the robustness of the Edmonton housing market during this lockdown. With unprecedented low interest rates, and two thirds of the economy sitting on more and more money, it makes complete sense that my industry is running, open doors for hungry home buyers.
A neat deal in January, we were able to purchase a two-storey luxury condo unit in Oliver for $110K less than the Seller paid in 2013. This building had an atrium, fountain, theater room, board room, fitness center, glass elevator with city views. Likely the nicest condo I have seen in our little city. We paid just under $350K and to boot, building passed our condo document audit without any hesitation by our document inspector.
The City of Edmonton recently launched a rebate for green home improvements. These can be used retroactively and include everything from windows to tankless hot-water heaters to HE Furnaces. For more information click HERE
This next snippet comes courtesy of Josh Jackson at Murray and Stadnyk Law.
Basic facts: The Personal Representative (aka an Executor) for an Estate sold a detached home in Edmonton. Prior to the sale, the personal representative spent many months cleaning and emptying the property of its contents. The property was eventually sold to new owners. The buyer had plans to complete renovations before moving in the property. During the course of these renovations, the new owners discovered approximately $500,000.00 in cash and gold hidden inside the home! The Buyer (without contacting the Realtor/the police or the Vendor) tried to deposit a portion of this treasure into their bank. The bank contacted the police, who attended and subsequently seized the money. We now have a lawsuit! The question is who is entitled to the cash and gold?
Supporting Each other and Local Businesses
We ( Liv Real Estate™) are giving away $100 gift cards to local restaurants to the tune of $10,000. Nominate someone HERE. Each week, for the next 10 weeks, we’re going to buy ten $100 gift cards from a local restaurant and give them away! Ten Restaurants x Ten $100 Gift Cards = $10,000 and One Hundred Lucky Recipients!!
We need your help! We’re looking for your nominations of anyone who has been impacted by covid 19 or has stepped up to support their community this past year: healthcare workers, first responders, teachers or anyone else who has stepped up to support their community this year. Maybe you know someone who is just having a tough time and you’d like to show them you care.
Nominating someone is easy – tag them in the comments of our giveaway post on Facebook or Instagram and tell us why. Entries do not carry over. You can nominate as many people as you’d like, but only one nomination per nominee per week.
We will draw 10 winners per week and contact the nominee directly via dm or messenger. Winners are drawn Fridays at 10 am and have until the following Monday at noon to claim their prize.
A Quick Story in the Foreclosure Market
I was in a 1960s bungalow in North Edmonton last week. It was significantly unrenovated, a bit worn and beaten, and had evidence of water penetrating three of four walls in the basement. It was for sale by the Court of Queens Bench, so the “Seller” waives all potential liability for anything that may or may not be wrong with the home. Typically, as buyers, we are protected by something called Representations and Warranties granted by the Seller, ( basically the Seller Warrants there are no hazerdopus or expensive fixes not discoverable through reasonable inspection ( that were not being duped into buying a lemon)) . Regardless, this home was listed at $260K and had ten competing offers in place. I scratched my head, this home needed a TON of work. A clean well cared for home in the area is likely worth $325K-$350. If I were to go a community south, I could drop that price easily by $25K and I bet you I could find and estate sale in the area with representations and warranties for less money, not in multiple offers. So why was there so much interest in over-paying on such a financial liability? At the asking price and with competing offers, there is no chance of purchasing it, renovating it and not being upside down financially. It occurred to me I was witnessing Herd mentality. People assumed there is a deal in something labeled a Foreclosure and people started bidding. After speaking with a colleague, she had witnessed two similar occurrences in January, one of which, the home sold for significantly more than it will ever be worth.
Here is the thing with Foreclosure shopping, there is a long-standing precedent that the Bank, Mortgage Insurer, or Court is going to try to sell the property for market value as to not entice unsophisticated consumers into purchasing potentially hazardous and expensive to fix properties. After a set amount of time the Bank, Court, and or Mortgage Insurer will reduce price publicly until the home sells. There is no magic formula to figure out how much was owing when the listing foreclosed, who to speak with at the bank or court, the institutions selling will always try to get market value and or their listed price. There is really no deal here, and I am taking on a lot of risk. If I am looking for a deal, I am likely better off in the estate sale market where there are representations and warranties to protect me and prices are set by executors who have no skin in the game. And hey, you could find half a million bucks😉.
Well, that’s enough out of me, thank you for a successful month. The kind words and referrals make my business worth while. I am grateful for the opportunity to meet and speak with all of you.