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Increase your annual income by owning a home!

Mon, 27 Feb by melodykilbank

Alberta Real Estate Association’s January Report says that your home is one of your best long term investments! Check out these statistics and be encouraged!

“January 2017
Homes provide shelter and refuge, but they are also most Albertan homeowners’ single largest investment. Housing represents 47% of total assets for the average Alberta family – much higher than stock market investments and pension plans combined (29%). Why is this important? Because homeownership benefits the economy as a whole, as well as individual homeowners. Let’s look at this in the context of the most recent stats on Alberta’s real estate, reported by the Canadian Real Estate Association.
Investing in housing in Alberta is better than buying stocks
Over the last 18 years, house price appreciation in Alberta has outpaced Toronto stock market returns. Between 1999 and 2016, with average annual residential sales of roughly 57,000, house price growth in Alberta (6.6%) outpaced yearly returns on stocks traded on the Toronto Stock Exchange (6.4%).

Average residential prices up 3.1% in Alberta in January
Total residential sales across the province were up 17.7% year-over-year, totalling 2,679 resale transactions in January 2016. Roughly 3.4 out of every 10 newly listed homes were sold, translating into a sales-to-new listings ratio (SNLR) of 34%. And the average residential sales price rose 3.1%, to $383,040.
Increased home equity = increased net worth
What’s so great about house prices being up? Rising house prices mean homeowners are building equity in their homes. Home equity represents the current market value of the house, minus any remaining mortgage payments. Equity is built over time as the homeowner pays off their mortgage and fluctuates with the market value.
Rising home equity benefits homeowners individually, and the Alberta economy as a whole. By how much? More than $40 billion in 2016.

Calculating Returns to Equity
Using Statistics Canada’s data on Alberta homeowners’ mortgage balances (Surveys of Financial Security), we calculated equity shares by age group. Equity shares multiplied by user costs (average two-bedroom apartment rents used as proxy) provided the income generated (returns to equity) per homeowner, by age class. The annual income generated by homeownership was then derived by multiplying the number of homeowners by age group in Alberta with returns to equity per homeowner.

For those under 35, the income generated by homeownership reached $11,000 a year per homeowner
Over the past five years (2012-2016), the annual income generated by homeownership averaged roughly $57,000 per homeowner (all ages) in Alberta. Returns on equity per homeowner ranged from annual income generation of $11,000 for homeowners under the age of 35 (generally considered as first-time buyers), to roughly $14,000 for those above 65 (annual average).
REALTOR® Tip: First-time buyers build equity in their home as they pay off their mortgage – roughly $11k a year!
Collectively, annual returns on equity (ROE) for all homeowners in Alberta reached roughly 38 billion dollars, or 12% of GDP
Thirty-eight billion dollars a year represents roughly 12% of Alberta’s nominal GDP and 85% of Government of Alberta’s annual revenues. When people build equity in their homes, they borrow against that equity through a home equity loan, or home equity line of credit. An increase in the value of their homes increases the amount of collateral available to households, leading to higher credit. Rising house prices, which imply higher housing equity, may encourage consumers to borrow more, causing a rise in consumer spending. Looking at the data, we know this to be true.

For every $1 rise in housing prices, Albertan homeowners raise their personal spending by 6.7 cents – collectively $5 billion a year
The increase in consumer spending following a rise in in house prices has been referred to as the marginal propensity to consume (MPC) from housing wealth. We found that, for every $1 increase in average residential prices, Albertans raise their personal spending by 6.7 cents, which collectively amounts to roughly $5 billion a year (2012-2016 average).
Five billion dollars a year is 1.5% of provincial GDP, and 11% of government revenues. This is a significant boost to Alberta’s economy. A 3.1% price gain, like the one we just saw in Alberta this January, equals an average increase of $11,420. The associated rise in consumer spending that could come out of that is $868 per homeowner per month, or $10,415 per homeowner per year, or a collective increase of $616 million a year.

Regine Durand
Economist
Alberta Real Estate Association
Suite 300, 4954 Richard Road SW
Calgary, AB T3E 6L1”

Housing Forecast for 2017

Thu, 05 Jan by melodykilbank

CTV News on January 4, 6:00PM reported the forecast for housing in 2017 was “grim”. Don’t believe everything you hear on the news!
I look forward every year to attending the annual Housing Forecast Seminar put on by the REALTORS(R) Association of Edmonton. They invite several economists to present as well as our own Chairperson with predictions for the year ahead. The RAE predicts the following: Prices on average will drop a marginal 2.2% for Single Family Dwellings, 3.8% for Condos, however the Duplex Row housing market will increase by .5%. Although this outlook isn’t on the upswing, the margins are small, and may not be realized if your property is in good shape and is priced right. The rental market continues to have a 7%+ vacancy rate which is going to affect investors.
The Economists from Canada Mortgage and Housing, Government of Alberta and City of Edmonton were primarily in agreement about several things. Interest rates will stay low, oil prices will likely not change much from $53-$58/barrel WTI prices and unemployment rates are going to stay higher than usual until 2018. It is our immigrant population which is off setting the inter provincial migration so we will be at a net zero population growth over the next year.
We are in for a lean year, but not a “grim” one. If you need to buy or sell in 2017, work with a real estate professional who will be able to walk you through how to maximize your real estate investment!

Consumer Alert…Mobey Real Estate

Fri, 16 Dec by melodykilbank

Just passing on information to protect Albertans!

Consumer Alert: Mobey (Moby) Real Estate
________________________________________
Calgary, Alberta – Multiple consumers have contacted the Real Estate Council of Alberta (RECA) about the activities of a company referring to itself as Mobey (or Moby) Real Estate, in Edmonton.

Mobey Real Estate is not a licensed real estate brokerage in Alberta nor are any of the individuals listed on the Mobey website licensed as real estate professionals.

Mobey has been contacting consumers with offers of work-from-home employment opportunities. These emails frequently indicate that Mobey is recruiting assistant property managers and other similar positions. Emails ask the recipient to complete an employment contract, including providing personal information and bank account information.

RECA and the Better Business Bureau of Central and Northern Alberta are warning consumers about these employment opportunities through Mobey Real Estate, and we encourage you to send any emails you receive from a @mobyestate.com email address to your local authorities.

Consumers can find out if an individual is a licensed real estate professional through RECA’s website at www.reca.ca. Use the “Searching for an Industry Professional” tool. If you have concerns about unsolicited employment opportunities, please contact your local Better Business Bureau.

The Real Estate Council of Alberta (RECA) is an independent, non-government agency, responsible for governing real estate, mortgage broker, property management, and real estate appraisal industry professionals under Alberta’s Real Estate Act. RECA’s mandate is to protect consumers and to provide services that enhance and improve the industry and the business of industry professionals.
The authority for a positive real estate experience

Copyright © 2016 Real Estate Council of Alberta, All rights reserved.
RECA News Releases are distributed to the email addresses provided to RECA by industry members, media, and other interested parties. RECA News Releases can also be found on the RECA website. RECA sends these emails using MailChimp. Your feedback on RECA News Releases and other publications is always welcome and can be sent to communications@reca.ca

The Equity Snowball

Wed, 02 Nov by melodykilbank

November is the time of year we all reflect on our freedom in Canada. Paid for by the sacrifice of many. My dad is a WWII veteran and he just celebrated his 95 birthday in September! As I reflect on my parent’s real estate decisions over their life time, they are the prime example of how the equity snowball can work for you, in the purchase of your own home.

They started small in the early 50’s by financing their home purchase by the benefits of the Veterans Land Act. In 1950 the VLA began to provide loans to veterans who wished to construct their own homes. Their subsequent home purchases allowed them to move the equity from this original home to the next and so on. This equity is still providing a passive income to my Dad.

I think the key to building a good equity snowball is in getting into the market as soon as you can with an affordable home. It doesn’t have to be your dream home. As long as it provides for your needs, get started in home ownership and build some wealth through, market appreciation AND principle pay down on your mortgage.

With the new mortgage qualifying rate, first time home buyers are going to need to readjust their expectations. They may need to see one extra stepping stone along their path to their dream home.

My advice is to keep the big picture in mind. Your equity snowball is just going to start smaller. But you will still get to your end goal, thanks in part to the veterans who have served so we can enjoy the freedom of owning our own piece of real estate!

Grateful.

Government Changes To Mortgage Qualifications

Tue, 04 Oct by melodykilbank

Effective October 17th the Federal government is now requiring all home buyers who are borrowing more than 80% of the price of their home to qualify for a higher interest rate.
Without getting overly complicated about the minutia, I’ll keep it simple. Any buyer who is entering into a purchase with high ratio financing (only 5-19% down) will have to qualify for the rate of 4.64% instead of the actual rate they are paying. This is for any term of mortgage. It used to be a 5 year fixed rate, you could qualify for the rate you would be paying.

My understanding is the government wants buyers to be more aware of what they can afford, not just what they qualify for.

Stacy Bell-Powell, of I Find Mortgages, www.ifindmortgages.com a mortgage broker to whom I refer some of my clients, has given us a specific example:

“Currently, if a client gets a mortgage with a fixed rate of five years or longer, we use their actual discounted interest rate for qualification purpose. If they take a term less than five years we need to use the Mortgage Qualifying Rate (or MQR) of 4.64% to qualify them. Effective October 17, 2016, regardless of the term selected, we will have to use the MQR to qualify them. The applies to all insured mortgages, so mortgages with less than 20% down payment.
For example, let’s assume a buyer has an income of $50,000.00/year and assuming no other debt payments, 5% down and good credit. Today, using a 5 year fixed rate of 2.44% this client would qualify for a purchase price of $324,000.00. Under the new rules this buyer would now qualify for a purchase price of $ 239,000.00.”

So if you are considering buying and are on the fence, any offer which has had approval and conditions waived by Oct 17th will not be subject to this new regulation. So act now!

Call me if you can move forward with speed!

PAR ISN’T JUST FOR GOLF!

Thu, 08 Sep by melodykilbank

Apparently it is a good adjective for the Edmonton market for August 2016!

The City of Edmonton SFD (Single Family Dwellings) prices were down by ONLY .02% year over year for August! Homes are selling 3 days quicker on average. Condominium prices dropped 1.2% year over year taking 4 days longer to sell than last year. The overall inventory level is down 2% from July 2016 but up 9.4% from August 2015.

“Alberta’s economy has been under enormous pressure for some time, but the residential real estate market in the Edmonton Census Metropolitan Area continues to hold. Prices and unit sales for all residential homes are consistent with last year, down less than 1% and 2% respectively,” said Steve Sedgwick, Chair of the REALTORS® Association of Edmonton.

As for the month over month numbers, SFD prices were down 4% July over August, bouncing back to the same average as June 2016. Condos were down 2.7% on average reflecting prices back in early spring.

“While this is one of the most active times of the year, we are seeing both listings and sales tapering off as we move into the fall months. This is standard in our local real estate cycle,” said Sedgwick. “

Our inventory will last us 5.37 months if no other homes are listed. This is still a balanced market. The quantity of listings could favor buyers over sellers, but not dramatically.

So, if you are like me, and have not had many PARS in your golf game this summer. Take heart! The real estate market is on PAR!

In a balanced market with stable pricing, it is a good time to either buy or sell. If I can help you with a market valuation on your home OR a buyer’s qualification valuation, please give me a call.

Considering buying an investment property?

Wed, 27 Apr by melodykilbank

The time is ripe for buying an investment property. Here are 4 good reasons:
1. The Edmonton and area inventory is at record levels since 2007, which means there are lots of properties from which to choose.
2. The mortgage rates are low and just went down a little more this past week. 2.49% on a 5 year fixed is a great rate.
3. The Edmonton market has remained stable. This means you won’t be buying or selling in an inflated market.
4. There are more foreclosure properties on the market due to Alberta.

NOW is a great time to take that leap! Here are three main factors which will help you make a good decision for the long term investment.

LOCATION! You know the number one factor in buying ANY property is to consider the location for RESALE. When it comes to location of a rental or investment property don’t just look for what is there but also look for what isn’t there. Cheaper properties on main streets are an advantage to an investment for rental purposes. Being close to public transportation, schools, recreation and shopping are also valuable. But also consider what should NOT be there, power lines, un-kept neighbor’s yards, and surrounding properties which look like they need more “loving” than the one you are interested in purchasing.

The second factor to consider is LAYOUT! If the property has a functional layout, no matter how small it is, it will be a sound investment. The layout in an investment property can be changed, but those kinds of renovations are costly and the ROI is diminished. No matter what condition a property is in, cosmetic fixes can get you more rent and more resale value, but not if you are having to knock down walls, relocate plumbing and electrical lines.

And the third major factor to consider is to be sure there are NO RESALE OBSTACLES THAT CAN’T BE FIXED. For example a 2 bedroom home in a family oriented area will be harder to rent or resell than a 3 bedroom. Another example of a resale obstacle that can’t be fixed is inadequate parking for tenants. I recently considered purchasing a condo which needed gutting. That was not a problem. But when I phoned about the parking arrangements the property management company told me there was NO parking with this unit. Street parking only diminishes your prospective rental pool and limits the buyer pool for resale.

So after you get your financing in place and you begin to search for a property, consider these 3 main factors, LOCATION, LAYOUT, RESALE OBSTACLES. This will get you off to a great start in choosing your next real estate investment.

And the RONA Gift Card Goes to…

Fri, 04 Sep by melodykilbank

CONGRATULATIONS to Lily S of Kingston, ON – the winner of the $50 RONA gift card!

A BIG thank you to Lily, and to all of you who “liked” my REALTOR page.

My business continues to thrive because of the support of those, like you, who recommend my services. Your greatest compliment is a referral.

All about you. Really.

Melody

Melody Kilbank HiRes size 1

 

The BIG Reveal! and the Winner is….

Fri, 14 Aug by melodykilbank

HALLELUJAH –201- 10529 93 St is DONE!!!

The furniture is set up, the blinds are installed, the bedding is on the bed, and the decorative touches and stocked kitchen complete our newly-renovated, centrally-located 1-BR, 1 Bath condo unit. All that is left to do is to find that perfect (lucky!) renter.

Here is the link to view the rental advertisement. –

https://edmonton.rentfaster.ca/edmonton-apartment-for-rent/boyle-street/newly-renovated-fully-30571

ps. Tell your friends and family…spread the word! 🙂

I’ve also included a few snaps, here (I think it turned out fabulously!):

 

AND, I haven`t forgotten – At the beginning of this adventure, I promised that if you `liked` my facebook page, that I would include you in a draw for that $50 Rona gift card, so….(DRUMROLL)

I will contact the winner in the next few days.

Thank you for following me through all of this. So, you might be asking, will we continue our annual trend of condo purchase fix-er-up-ers.

Ask me next year, and stay tuned…

All about you. Really.

 

Melody

Taking Stock – the Cheap, the Free and the Inventory

Wed, 05 Aug by melodykilbank

We are SO close! All that’s left to complete the condo is to give it a through clean, spit-shine, then to off-load and set up the furnishings to stage it for advertising. Renters, on your marks, get set….to view the cutest, most complete little 1-bedroom in central Edmonton. BIG reveal coming SOON…! CHECK BACK… So, as I did a walk-through yesterday, I snapped my pictures and had to chuckle again – feeling very self-satisfied – when I took stock of all of the fabulous “finds” we were able to unearth through my determined, ruthless and disciplined commitment to kijiji and Re-store shopping. While my contractor questioned the value in the end of using some of the older fixtures and materials in the reno, and wondered if more money may have been spent on time to install some of these, I still maintain – even, simply from an ethical stand-point – that re-cycling and re-using over purchasing new, at least SOME materials and furnishings can, indeed, yield savings AND gave a sense that wise and responsible choices have been made. It feels great! Take a look, room-by-room:

DONT FORGET – your chance to win the $50 GIFT CARD for RONA. I am extending the deadline… All you have to do is “Like” my REALTOR(R) page on FACEBOOK by August 15/ 15. https://www.facebook.com/melodykilbank?ref=hl All about you. Really. Melody

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.