Edmonton and Area Housing Update January 2022

Hello and Happy New Year!

The number of Real Estate sales in Edmonton and Area has risen year over year when comparing December 2020 to December 2021. In fact, the number of sales in December is greater than they have been for over a decade as they have been for the fall and starting winter months. The number of sales across the board from November did come down in all classes, sales tend to do as the weather gets colder (HERE). On the ground, there isn’t a lot out of detached single-family home inventory available, and mortgage rates are rising. As a result, historically hard-to-sell homes are moving for good prices. As we move forward, what should we expect? Economists are telling us that interest rates will rise, but not enough to slow housing demand. Multinational brokerage houses are expecting price growth across the country to be between 9% and 10% this year. ( Source HERE ). There is even speculation that the price of attached housing and condos will rise as buyers will seek cheaper alternatives to detached housing. Condo sales have been the highest they’ve been in years in Edmonton although their prices remain depressed. (HERE)

I think most of us are expecting an economically sound 2022. Homebuilders are preparing with spec inventory. The price of oil is forecasted to be 55% higher than budgeted, unemployment is coming down, and exports are recovering. ( Source HERE)  With any luck, we, as a community, will have a prosperous year.

Consumers Choice Award

Company-wide, we experienced another whopping success. Liv Real Estate ™ won its third straight Consumers Choice Award.  It’s kind of bananas. Our little locally owned 50ish person Real Estate Company is consistently winning consumer opinion over multination, billion-dollar franchises with hundreds to thousands of local employees and contractors. We not only appear to be able to deliver a superior consumer experience, but we also seem to be able to do it with far less than our competition. A HUGE thank you, to you all. I am very proud to have grown with so many of you.

 ***Consumers Choice Awards award winners are the result of an in-depth, consumer evaluation process. It involves the gathering of unbiased consumer opinions, gleaned from Online and Social Media sources by Advanced Symbolics International, (ASI) a leading North American AI-Driven Market Research Firm ( HERE ). ***

Covid-19 and Real Estate?

We are still required to wear masks. Hold harmless agreements for Buyers and Sellers are industry-standard before dealing with the public. We do have the right to request proof of vaccination before entering a home, letting someone enter a home, or when dealing with someone face to face. No one I have encountered on the buy or sell-side has requested this yet, although agents have been prepped for this discussion. I have yet to receive any updates on how or if the Omicron variant will affect Realtors’ current protocol. I have noticed more cases than usual of Seller’s and their agents filing complaints about too many people entering a home for a viewing or inspection. So as a heads up, it is expected that only the home buyers and their agent will be viewing unless special permission is obtained from the Sellers via their agent.

Big Bank Revokes Mortgage Approval

The Buyer and Seller had agreed and signed a contract together. The buyer had a deposit held in trust, paid to have the property inspected, had a written commitment from his bank for a mortgage on the home, and had subsequently removed their purchasing conditions. The Buyer had all but moved in when the Bank called the Buyers Lawyer, and out of the blue, requested the Buyers Lawyer perform a Personal Property search on the buyer. ( Anyone can pay for one HERE ) This search is different than your credit. Nothing was reflected on the Buyer’s credit that would show them to be a financial risk. But the registry showed that 15+ years ago, the buyer was a large shareholder of a company that defaulted on a significant amount of debt. The Debt holder was renewing the debt claim against the Buyer, ad infinitum until the debt was paid. Once the Bank found out, they revoked the mortgage from the Buyer and the Buyer was unable to complete the purchase.  

Mortgages

I had an interesting conversation with a mortgage broker over the holidays. For the past number of years, I’ve been a fan of fixed-rate mortgages. I like predictability and security. She went through rates with me, and it was interesting. I think I’ve flipped. Variable mortgages are at 1.3% right now. Fixed are about 2.64%. Lending rates would have to go up by 2% for me to come close to what people are paying for fixed. Rates historically never get raised more than a quarter-point ( Source HERE ). So if I were getting a mortgage right now, would I go five year fixed at 2.64 or 5 years variable at 1.3%? I would have to think long and hard about it. That’s a $300/month difference in a monthly payment on a $400,000 house. Questions? This gal knows mortgages HERE

The New Housing Market

I feel like it was this time last year that I wrote about this, similarly, builders have low inventory and prices are on the rise while we shop. Builders across the board will be announcing month-end price increases on all existing and upcoming inventory. If there was a silver lining, we are able to look at homes that physically exist, rather than last year where there seemed to be much less to look at. Granted, homes are receiving pending contracts between the time an appointment is booked and viewing the following day. Interestingly, before the pandemic, a local builder had innovated enough to be competitive in a depressed market. They were able to offer a 2,000 Sq. Ft detached single-family home, with a front double attached garage, and zero lot line for +/-$420K. A similar house today, in a similar area is now actively selling for over 500K. Not so common knowledge, Builders and Realtors work together. Buyers are encouraged to have a Realtor work with you through the resale and new build market to help remove any competitive advantage a Seller may have over a buyer. When dealing with Home Builders, just like the resale market, more often than not, your Realtors’s commission is guaranteed by the Seller, their brokerage, or their lawyer. Why not remove any conflict of interest a builder may have in selling you something by having an industry expert assist in guiding you through the process?

Mobile Home Lending

This is a bit of a taboo statement, as it can be very challenging to secure a mortgage for a mobile home on leased or cooperative land. After some digging for a few different parties this past little while, here is what I can offer. RBC, CIBC, Servus, and TD will all lend on them. CMHC, will even insure the mortgages at certain parks or cooperatives (A good mortgage professional can contact CMHC to confirm whether a certain park qualifies or not).  The trick is to find the lender and insurer who will like the model of trailer you are looking at in a particular park, under particular circumstances. If all else fails, personal loans can be obtained, amortized of x number of years to assist in a mobile purchase.

A Personal Note

We were able to take some time off over the holidays. It was so nice to be able to spend a few uninterrupted days with family traveling to the mountains and spending time around the dinner table. As news changes daily regarding the latest variant of the Covid virus, there is still safe and quality service to be had in the new and resale housing markets. I look forward to speaking with many of you in the following days, weeks, and months.
Thank you for your continued engagement. It is a pleasure to grow with and serve so many of you wonderful people in our community.

Here is to a safe and fun 2022!

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