Improving economy could signal time to move from variable rate.

Toronto- Longer term fixed mortgage rates may soon be a better deal than variable rates for home buyers, says a new report by BMO Capital Markets.

BMO chief economist Douglas Porter and senior economist Benjamin Reitzes say that historically, choosing a variable mortgage rate has been more “cost-effective” than locking in on a five-year fixed rate, but this may no longer be the case as signs of an improving economy continue.

It has been long anticipated that both the Bank of Canada and the U.S. Federal Reserve will move to hike interest rates in 2015.

“True, it may have seemed that markets and economists have played the role of the Little Boy Who Cried Wolf on higher interest rates in recent years,” says the report release Thursday.

But there are emerging signs that the tide is finally turning for rates, especially with the U.S. economy  poised to accelerate.  The bond market has sent out loud warning signals over the past year that the era of low-interest rates may finally be drawing to a close.”

Currently, a five-year fixed mortgage rate from on of the big Canadian banks hovers above three per cent, with variable rates ranging below that.

As bond yields rise they will put pressure on borrowing costs and long-term mortgages, Porter and Reitzes say. “So, even if variable rates take some time to climb, we may not see such low fixed rates again any time soon.” their report says.

Most affected by potential hikes, they said, are those who are already stretched too thinly in the housing marking, so locking in at a higher rate may help this group weather any drastic increases.

“For those who don’t have much financial flexibility and would run into difficulty  form a pronounced upswing in interest rates (typically first-time homebuyers), any potential extra cost for peace of mind now appears to be a price well worth paying,” the report says.

Earlier this week, the Teranet National Bank national composite price index found that home prices are rising steadily.

In February, Canadian home prices rose 0.3 per cent.

The index found that prices were up in all five  markets surveyed in Western Canada  and were down in all eastern markets except Montreal.

– Edmonton Journal – Business B3-Friday March 14, 2014 – The Canadian Press

Wall beds come out of hiding!

Comfortable space savers are turning rooms into multitaskers.

“The clients came to interior designer Laura Casey with a space dilemma: They did not want to give up the guest room in their suburban home, yet they needed a place for their child to play.

Casey came up with a solution often used in small urban apartment: a Murphy Bed. It takes up less space than a sofa sleeper or futon and – unlike many of those – uses a standard mattress, so guests including elderly grandparents, have a more comfortable stay.

“The did not want to compromise the quality of the mattress,” said Casey, owner of Laura Casey Interiors in Charlotte N.C.

The Murphy bed – which tucks into cabinetry when not in use – is enjoying new popularity as a stylish space-saver in many kinds of homes, not just studio apartments.

“It is an interesting trend,” said Chris Fahy, vice president of The Bedder Way Co. in Indianapolis, which makes Murphy beds ans has seen sales rise in recent years. He says many customers are Baby Boomers, empty nesters, and other homeowners who want to turn a bedroom into a hobby room or exercise room but still need a place for grown children, grand children or other guests to sleep.  Fahy’s Murphy beds range in price from $1300-$3100. California Closets, which also makes custom wall beds, has seen the same upward trend, said Ginny Snook Scott, vice president for sale and marketing.

– Edmonton Journal – Homes – Section H – Helen Metella – Saturday March 8, 2014

Were you looking for a space-saving tip, or a multitasking room option. Why not look into a Murphy bed?

It’s all the buzz….St. Albert has topped MoneySense’s annual Best Places to live ranking. 

“Who says size matters? If you’re looking for the best place in Canada to live, perhaps it’s time to think small. Really small. It’s easy to think residing in a modest-sized town means giving up access to all the services and amenities you need or desire, but that doesn’t have to be the case. Satellite communities around major centres are evolving to deliver small-town flare with big-city conveniences. In that way, many of these communities aren’t just great places to live: they’re Canada’s best-kept secrets. Take St. Albert, a community of just 64,000 on the edge of Edmonton that few Canadians have likely ever heard of. They have now, because St. Albert tops MoneySense’s annual Best Places to Live ranking.

The surge of the west is a prominent trend in our ranking. Nearly half the top 20 cities on our list are west of Winnipeg. It’s no fluke. Consider what’s happening in cities like Calgary, which comes in second overall (and was last year’s number one). In addition to offering plenty of opportunities to land high-paying jobs, the city is rapidly expanding its transit system and growing its cultural scene. The tilt westward doesn’t come without some casualties in the east. Orillia and Owen Sound in Ontario are two prime examples. Growth in these cities is stagnant and the job outlook is dim compared to the rest of the country.”

In case you were wondering how they go about reaching these rankings here are some facts from MoneySense:

“In total, we consider 34 different factors before arriving at our winner. To do this, we collect reams of hard data on each city from Environics Analytics and other partners. Then we tease out factors that make a community a truly great place, thereby creating a level playing field. The result is a completely unbiased look at the biggest 201 cities in Canada. ”

“So exactly how does St. Albert, a small city on the fringe of Edmonton, beat out every other city in Canada? Take your pick. Unemployment sits at just above 4%, incomes are among the highest in the country, crime rates are steadily falling, and while its winters can be skin-splittingly cold (averaging 28 days a year with a minimum temperature below -20˚C), there’s plenty of sun all year round.

“The numbers, though, don’t begin to describe the appeal St. Albert holds, especially for young families. At a time when some cities seem to be going to war with kids looking to play a little shinny on the street, St. Albert stands out as a place where cars don’t always come first. Street hockey is encouraged and if you want to close the street for a neighbourhood party, go right ahead. Give the city 10 days’ notice and they’ll barricade the street—the city’s Neighbourhood Watch and Citizen’s Patrol teams will even bring the food.”

So there you have it! St. Albert ranks 1st in the Best Places to Live in Canada.

MoneySense Magazine, by Mark Brown ,March 12th, 2014, From the April 2014 issue of the magazine

From the early 1990s to the beginning of this century, “bigger is better: certainly was the mantra of the home-building industry.  But according to new data, home buyers are seeking less space today but more in green amenities.

Research by the Canadian Home Builders Association has found that many people now desire smaller homes with multi-purpose rooms and energy-saving features. Plus, a survey of International Furnishing and Design Association members forecasts more emphasis will be placed on smaller, more eco-friendly homes.  Family rooms will grow larger, as will kitchens.  Other rooms in the home will disappear, including the living room.

Many homeowners and potential home buyers realize that with girth  comes a cost.  In today’s fragile economy, the ability to cash in on the dream of homeownership may come at the compromise of a smaller, better planned home. According to Tim Bailey, the manager of Avid Canada, a research and consulting firm for the building industry, “While many consumers are willing to forgo space, they are not equating this with having to forfeit functionality.  Design creativity is requisite to adapt to this changing preference.” Here are some thing you will and will not find in newer homes moving forward.

– The dining room is becoming extinct, with larger eat-in-kitchen/entertaining spaces the norm.  The kitchen will be the main room of the home and be renamed the “Kitchen lounge”.

– Seperate rooms are evolving into spaces that serve many different purposes.

– Although the sizes of bathrooms may be scaled back, the amenities will not. Spa-style bathrooms with luxurious products, high-tech features  and televisions will be on the rise.

– The master bedroom suite may not shrink in size, but it could be combined to form a home office and exercise space.

– Expect to see more high-tech offerings, such as voice-or motion activation devices in the home.  Lighting, entertainment gear, heating/cooling systems, and even blinds could be hooked up to a master control system.

-Thanks to an increasing number of people working from home, the presence of a dedicated home office is a given in newer homes.  Nearly 40 per cent of industry forecasters say that they expect one in every home.

– Home storage solutions will also be a vital component of new homes.  Builders will create clever solutions for mixing storage into more compact spaces.

– With aging baby boomers comprising a larger segment of home buyers, expect to see more one level homes, or at least homes where there is a master suite and the majority of the living space on the first level.

Smaller, more efficient homes require less in terms of heating and cooling energy.  They need less furniture, and new materials made from sustainable products help further fuel green initiatives in the building industry.  Energy efficient homes are a main priority for buyers.  Although the homes may be smaller, they will not be miniscule.

-Metro Creative Services, St. Albert Gazette – Article

“Fears of an office glut are increasing in Alberta’s Capital as the City of Edmonton and developers bid to build more towers on spec in a city where much of the new space remains vacant.  The current vacancy rate in downtown Edmonton is around 8.5 per cent, which is considered a “healthy market”, but analysts warn that if all the Class A space being planned proceeds, landlords could soon get a sinking feeling.

With new developments such as the Kelly Ramsey Building underway and slated for completion in 2016 and other proposed developments, there is potentially 1.1 million square feet of Class A office space that would be added to current inventory,” DTZ Barnicke reports.  Based on current absorption, it would take 10 years for the office market to return to a healthy state, the report concludes.

Since it was built three years ago, the Epcor Tower downtown remains 30 percent empty with 188,000 square feet vacant.  As well, the 174,000 square-foot office tower at 9888 Jasper Avenue, the former ATB Tower, is completely vacant after ATB relocated.

Over the past decade, Edmonton has seen 75,000 square feet to 100,000 square feet of office space leased up each year on average, but in 2013 the downtown experienced negative absorption of 253,000 square feet.

Still, the potential building boom would represent the biggest in 30 years.  “There is more serious consideration of new development in the office market right now than at any time since the early 1980’s,” said Avison Young prinicipal Cory Wasnack, who notes that only one new office tower – Epcor – has been built  since 1990.

“We predict that 2014 will be a game changing year for the office market – one that will bring excitement from a development perspective and challenges for older existing inventory that faces a new competitive frontier,” Wosnack said.

That could be a wild frontier, especially if the city proceeds with a 450,000 square foot high-rise at 101 Street and 104 Avenue.  The city plans to take 350,000 square feet in the building and deliver the rest as spectacular office space.  If the tower proceeds – it would be built with Katz Group and WAM Developments – about 300,000 square feet of city leased space in other parts of the city could go dark.  At present, the city leases offices various locations around the downtown, including Chancery Hall, TD Tower, HSBC Bank Place and Scotia Place.  If a greenlight were given, the City of Edmonton tower would complete in 2017.

Office lease rates in the downtown are already softening, agents note, and could fall further if a glut of space emerges.  Class A rental rates now average $23.50 per square foot, according to DTZ, down from $30.59 in 2008.

Avison Young forecasts a recovery in the Edmonton office market this year, with a projected 250,000 square feet leased up in the downtown and another 125,000 square feet absorbed in surburban markets. …..

–  WESTERN INVESTOR, MARCH 2014, ALBERT SEC. B.11 – 

Spring is just around the corner, so why wait any longer for the full colour of spring!

‘Tis the season where the trees start to awaken and the sun is rising earlier.  I think I speak for most when I say that we are eager for Spring to arrive. A fresh coat of paint inside your home? Why not! That could be the easiest way to get a jump-start on Spring.

The multitude of paint chips at any store would be a daunting task.  However, with the help from experts at Para Paints, things got a little easier.  Not all home owners have access to a professional designers eye so Para Paints ‘Colour Trend Palette Postcards’ for 2014 make the task more comfortable. This tool is formatted as a handy passport and all of the trends evoke a sense of escape or renewal.

“Beach House’ is a colour trend combination that brightens with cheerful yellows, matching grey neutrals and accent colours of bright  blues and greens.  Para Paints chosen colour of the year, Plantain Chips (PF52), is the perfect feature for the beach house inspired room.

These newest palettes provide the inspiration for refreshed  and rejuvenated rooms without the guesswork of choosing complementary colours.

“It can be expensive to completely redo a room, so the trick is to find a starting point for a colour refresh in your existing decor scheme,” says Garry Belfall , the senior brand Manager at Para Paints. “The 2014 Colour Trend Palette Postcards are designed to help people see how vibrant colours and complimentary neutrals can work together.”

A refresh on any room in your home  is a sure way to kick-start a new season.  It can be as simple as switching out one or two of your colours choices from an accent wall, rug or even couch cushions. It can make a world of a difference.

(Royal LePage Homeowner Newsletter – Vol 19 Issue 3 March 2014)

(Para Paints  www.para.com )

(NC) The home selling season is about to heat up. If you’ve decided to enter the market, you’re in good company, says Phil Dorner, president of the Ontario Real Estate Association.

“Spring tends to see an increase in real estate

listings, but it also brings out the buyers,” Dorner explains. “In order to achieve the best possible results, careful planning and know-how are required in the home selling process.”

Here is a simplified breakdown of some of the steps involved in selling a home:

Consult an expert – A Realtor will help you set a price, develop a marketing plan, make your home more ‘saleable’, and act on your behalf during negotiations to ensure your interests are protected.

Set a price – Choosing the appropriate list price for your home can lead to a timely sale, so it’s important to get it right the first time. The price should be realistic – neither too high nor too low.

Prepare your home – The house should be clean and clutter free. If necessary, hire a professional stager to help make a notable first impression and enhance its appeal. Everything in your home should be in working order – make repairs where necessary.

Market your home – A marketing plan may include holding ‘open houses’, advertising and most importantly, networking. Your Realtor will relay information about your home to a vast network of potential homebuyers in your market.

Receive an offer – Once you receive an offer you can either, accept, reject or “sign back” or “counter” the offer.

Negotiate the sale – Most offers require some negotiating. Once both parties have agreed on the terms of the sale, the next step will be preparing a contract.

Close the sale – At the “closing” meeting, ownership of the property is legally transferred to the buyer. Your lawyer will assist you in the legal transfer.

“Once you’ve closed, prepare to vacate your home and make a list of all the items you will need to turn over to the new owners,” says Dorner. “Finally, celebrate.”

More information is available at www.wedothehomework.ca.

www.newscanada.com

(NC) If the thought of the reawakening real estate market excites you, you may be ready to buy a home. Aspiring homeowners will need to have a few things locked down before taking the plunge.

“Above all else, homeownership needs to make sense financially,” says Phil Dorner, president of the Ontario Real Estate Association. “Market conditions, mortgage rates, investment opportunities – all of these factors are important, but they should not be the only reasons for buying a home.”

According to Dorner, you’ll know you’re ready to buy a home when:

You’re familiar with the market – You’ve discussed options with your Realtor and you’re familiar with home prices in the neighbourhoods you’re considering.

You know how much you can afford – You’ve worked out how much is required for the down payment and closing costs, as well as monthly mortgage payments and other expenses like utilities, insurance, property taxes and maintenance.

You have the money for a down payment – You have at least five per cent of the property value saved and ready to put towards a down payment.

You have a reliable income – You have consistent cash flow to cover monthly expenses.

You have emergency savings – If your income is unexpectedly interrupted, you’ll be able to make your mortgage payments.

Your debts are under control – Your debt-to-income ratio is where it needs to be in order to secure a mortgage through a lender.

Your credit history is in good shape – You’ve spent the last several months, or years, building or perfecting your credit in order to help secure a lower interest rate on your mortgage resulting in a lower monthly payment.

You are prepared for the responsibility – You are familiar with all of the maintenance that a home requires and you’re prepared to deal with it.

“If you checked all or most of these points, you may be ready to buy a home,” says Dorner. “It’s a big step, but it’s also an enjoyable and extremely rewarding one.”

More information is available at www.wedothehomework.ca.

www.newscanada.com

(NC) According to a recent forecast from the Canadian Real Estate Association, the housing market is poised to see 3.4 per cent growth in the coming year – and more and more of us are choosing condominiums.

Jamus MacPherson, a condominium insurance expert with Western Financial Group, encourages clients to read the fine print before signing on the dotted line. “Buying a home, whether it is a condo or a single family house, is one of the biggest financial commitments you will make in your life,” he says. “There are important differences between purchasing single and multi-family homes. When it comes to condos, keeping a few important details in mind can save you headaches in the long run.”

To help condo buyers sort through the clutter, MacPherson suggests referring to the following checklist:

Ask questions. Knowing the building’s history will give you peace of mind. Important questions to ask include: Do the unit owners own the recreational facilities as part of the common property, or does the condominium corporation lease them? How many units are rented? How much money is in the reserve fund and what major expenses, if any, are being considered in the reserve fund plan?

Schedule a comprehensive home inspection. This examination should not only include the unit you’re considering, but also the building envelope and common areas. When selecting an inspector or engineer, make sure they are qualified to provide a complete and reliable inspection. This will protect your investment in the long run.

Watch for last minute changes. If you’ve purchased a new-build condo, there is a chance that last minute changes may be made by contractors in construction. Keep a close eye out and don’t be afraid to ask questions if something isn’t as was initially agreed on.

Know what your condo board will cover. Anything to do with the complex’s structure is the responsibility of the condominium corporation, but you will need to secure your own insurance to cover personal property, liability or any changes you choose to make to the unit. According to MacPherson, understanding the condo corporation and the stability of the reserve funds is crucial.

“It is critical that you work with your broker to ensure that you not only protect yourself from losses to your own property, but also any costs that may be incurred from losses to the rest of the property that might be underinsured through the corporation.”

Be proactive with your insurance broker. Depending on the use of your condo, your insurance needs may change. “Many condo owners don’t realize that by taking on a roommate, or leasing out their unit, their current policy may no longer cover them,” says MacPherson. “Updating your broker on anything from new, valuable contents to cohabitation will ensure that you’re properly insured.”

More information is available at www.westernfinancialgroup.ca.

www.newscanada.com

Recently I attended a commercial seminar with speaker Donald R. Campbell, Founding Partner of Real Estate Investment Network (REIN). He spoke of some of the reasons why he believes Edmonton is the best market to invest in commercial opportunities in the country today. Some attributes he mentioned are:

– Great affordability
– Future Ring Road development to be completed In a few years
– LRT expansion plans
– Revitalization of downtown with construction of new arena and development of old airport grounds
– A shortage of existing multi-family (down to only about 30 properties) as well as a shortage of light industrial
– Very low current vacancy rates
– Prices in Edmonton are only going up!!

If you have any questions about his seminar or clients who would have interest in investing or selling in Edmonton just let me know!

Contact Don Cholak today for any inquiries. If I don’t have the answer, I’ll get it for you!!