Thursday, March 25, 2010


House prices to hit record this year, but rate of increase to slow, Scotiabank says
Eric Lam, Financial Post
Published: Wednesday, March 24, 2010

Canadian home prices will reach a record high this year, but those expecting the sky-high house price increases of the past decade to continue will be disappointed, a Bank of Nova Scotia real-estate expert said yesterday. "It's time to reset price expectations for the Canadian housing market," Adrienne Warren, senior economist with Scotiabank, said at a real-estate conference in Toronto. "This was an exceptional decade for pricing." Looking at the past 50 years, prices on average rose between 2% and 2.5% each decade. But prices rose an average of 5.2% between 2000 and 2009, she said, which led to the current elevated pricing conditions. As for this year, Ms. Warren still anticipates a strong spring sales market as consumers try to take advantage of rock-bottom interest rates before an expected rate hike by the Bank of Canada in the summer.


Rate speculaton rises after BoC governor highlights inflation threat
Paul Vieira, Financial Post
Published: Wednesday, March 24, 2010

OTTAWA -- Canadians could face higher interest rates within the next few months, Bay Street economists said Wednesday after Bank of Canada Governor Mark Carney said inflation is "slightly firmer" than expected and that the promise to hold rates at record lows until July was only conditional.

Mr. Carney's comments during an Ottawa luncheon speech - in particular how he emphasized, against a backdrop of improving economic conditions, that his rate commitment was "expressly conditional" - led analysts to revisit their rate outlook, and pencil in the possibility of a move as soon as June.

The central bank's next rate announcement is April 20, followed two days later by its updated economic forecast. After that, there are rate announcements June 1 and then July 20.

The consensus among private-sector economists was for the central bank to honour its pledge and begin rate hikes in July. Now, some aren't sure. Bond traders, meanwhile, Wednesday pushed up yields on two-year notes in anticipation of rate hikes in the coming months.

The governor's remarks "failed to quell the market's speculation that a June rate hike may be in the cards," said Eric Lascelles, chief economics and rates strategist at TD Securities. "In fact, [Carney] goes to quite some length to emphasize the conditionality of the commitment not to raise rates before mid-2010, damning it with faint praise."

In the speech, Mr. Carney said inflation has been higher thanks to "transitory factors," most notably the Olympic Games in Vancouver last month, and a higher-than-expected level of economic activity. Later, speaking to reporters, the governor added first-quarter annualized growth is "looking stronger" than the central bank's projection of 3.5%. That would follow robust expansion of 5% in the final three months of 2009.

The Bank of Canada's last economic outlook, tabled in January, envisaged core inflation to average 1.6% in the first quarter and 1.7% in the second quarter. But in January, core inflation came in at 2%, and last month advanced 2.1% year-over-year.

The central bank sets its policy rate with a goal of hitting, and maintaining, 2% inflation.

The inflation outlook would be updated in April. At that time, the central bank would "take judgments on the appropriateness" of its conditional pledge, the governor told reporters.

"I cannot imagine a lower inflation forecast being unveiled come April," said Derek Holt, vice-president of economics at Scotia Capital, "but I can easily see a forecast for core inflation to remain at the 2% target that would imply earlier than anticipated hikes."

Mr. Holt said the central bank could raise its benchmark rate either in April or June, with an increase of 50 basis points to "punctuate" its seriousness in containing inflation and move away from emergency-level rates.

In April of last year, Mr. Carney cut the bank's key lending rate to its lowest possible level, 0.25%, and pledged to keep it there until the end of the second quarter in 2010. This was in an effort to pull the economy out of a deep recession, and get inflation up toward to the bank's preferred 2% target by mid-2011.

In recent weeks, however, data suggest the economic recovery is moving at a roaring pace, far exceeding expectations.

Another factor that could prompt an earlier-than-expected rate hike is an increase in M3, a key measure of money supply, said Stewart Hall, economist at HSBC Securities Canada. So far, month-over-month growth rates are tracking higher than the pre-crisis 12-month average.

"All that liquidity that has been injected into the financial system, rather than gathering dust, is now beginning to make it into the economy," Mr. Hall said. "And perhaps more than some slight upside on core inflation, it may be M3 growth that may be causing the central bank some angst with regards to their inflationary outlook."

Photo by: rian_ bean

Tuesday, March 23, 2010


Housing market momentum to carry strong sales volume into 2010: Scotiabank
By Mario Toneguzzi
Calgary Herald
March 23, 2010 9:02 AM

CALGARY - The momentum in the Canadian housing market has carried through to early 2010, with the volume of sales transactions in January and February only slightly below the near-record levels of late 2009, says a report released today by Scotiabank.

And the average MLS sale price in Canada will reach a record level this year.

"Strengthening labour markets are underpinning confidence, while generationally low mortgage rates

— and expectations that borrowing costs will soon be headed higher — are adding a sense of urgency," said the Global Real Estate Trends Report authored by economist Adrienne Warren.

"Milder-than-usual temperatures across much of the country may also have put a bit of spring into the
typically slow winter sales season. Average prices too are testing new highs, both for new and resale homes. A steady increase in the number of listings in recent months alongside a sharp increase in new construction is restoring a much better balance to the overall market compared with the latter half of 2009."

But the report said sellers’ conditions persist in most major centres.

The report said continued strong demand and pricing is expected through the spring, especially given an expected rush of buyers hoping to pre-empt tighter qualifying criteria for insured mortgages effective mid-April as well as the July 1 introduction of the HST (Harmonized Sales Tax) in Ontario and British Columbia.

"However, this should give way to more subdued activity in the second half of the year, as higher interest rates and higher home prices erode affordability. The incentive among builders to add substantial new housing stock should likewise fade as supply increases and prices cool."

The report expects the volume of MLS sales to hit about 510,000 this year, up 10 per cent from
2009 but still a touch shy of the 2007 record at the national level. Average prices are forecast
to increase about eight per cent to a record $345,000 in Canada.

Housing starts are estimated at 190,000, up from 149,000 last year.

Photo by: _Caitlyn

Wednesday, March 17, 2010


New mortgage rules leave homebuyers confused
Insured buyers must show 'ability to pay'
James Pasternak, Financial Post
Published: Wednesday, March 17, 2010

Frank and Susan Williams bought a house near Hamilton, Ont., this month, they followed a time-honoured tradition of using leveraged financing.

With mortgage insurance they only had to put down 5% of the $270,000 purchase price. They went with a closed variable rate at 2.25% and amortized the loan over 35 years. The deal was initiated with a mortgage broker, with Bank of Nova Scotia providing the financing.

"It's a three-bedroom bungalow. That was attractive to us. We have a dog and we like to do things in the backyard. We did not have the type of money we thought we'd have to put into a house. We said let's just bite the bullet and get this over with," Ms. Williams says.

And getting it over with was probably a good idea. First, they were in a rent-to-own arrangement and had to exercise their option to buy before August 2010. And second, based on pending federal rules for government-backed insured mortgages that come into effect on April 19, the Williams (not their real name) would probably not have qualified for the variable-rate mortgage. In fact, as recent arrivals from the United States and its housing crisis, their credit history might not have passed any stress test.

"We really came from the United States with nothing. Everything we had disappeared with the housing crisis. In areas that had bad loans all the houses just hit bottom. We were expecting US$250,000 out of our house but we got nothing," Ms. Williams says. They walked away from the whole mess.

But while the Williams might have had good reasons for leveraging to get their dream home -- they are firsttime buyers in Canada -- the new federal rules governing mortgages have been widely misunderstood. In fact, the biggest fear among the young and house-less is fear itself.

"There are a lot of rules that changed. But they weren't communicated very well," says Robert McLister, the editor of Vancouver-based Canadian Mortgage Trends (

Margo Wynhofen, of Grimsby, Ont.-based Verico One Mortgage Corp. ( and vice-president of the Independent Mortgage Brokers Association of Ontario, says she has had to spend considerable time explaining federal Finance Minister Jim Flaherty's statement of Feb. 16.

"I had a lot of people misunderstand the announcement. So I had a lot of clients call me for clarification. There was an overwhelming sigh of relief," Ms. Wynhofen says.

Under current mortgage-lending rules, buyers with a down payment of less than 20% of the purchase price must purchase mortgage insurance, with the most common source being Canadian Housing and Mortgage Corp. The new rules affect only customers that are required to purchase the insurance.

Under the new rules, all buyers requiring mortgage insurance will have to meet the "ability to pay" for a higher, more expensive five-year fixed-rate mortgage even if they choose a mortgage with a lower interest rate and a shorter term.

"It's not just first-time homebuyers who are affected. It's anyone who wants a variable mortgage rate now who doesn't have one already, they now have to qualify at a higher interest rate. Some of them won't qualify. And that's fine so they'll just take a fixed rate. It's not the end of the world," Ms. Wynhofen says.

Bernice Dunsby, director of home equity financing at the Royal Bank, says the new rules might even help save first-time buyers from themselves.

"We believe the new measures will have a small impact on mortgage growth, if any. First-time buyers should not be any more concerned about these changes. In fact, I believe the changes will actually help first-time homebuyers to ensure that not only can they afford their home today but in the future, especially if interest rates rise," says Ms. Dunsby.

In some cases, the rules might be outdated before they are fully implemented. A growing number of homebuyers are forgoing the conventional mortgage and using alternative financial products. Take the case of London, Ont., accountant and recent homebuyer Phil Parkinson. Three years ago, he bought his first home with a fully secured line of credit offered through Manulife Financial Corp.

The Manulife One product provides up to 80% of the appraised value of your home. It can be used to pay off the balance of your existing mortgage, personal lines of credit and any other outstanding debts you might have.

"These operate on a variable rate. It's just like one big bank account. You can have your money deposited into the account, you can pay your bills. [As you deposit] you can knock your account down and lower your interest calculation. Theoretically, you don't have to pay anything expect the interest," Mr. Parkinson says.

Other highlights of the rules don't directly affect firsttime buyers. For example, the maximum amount Canadians can withdraw in refinancing their mortgages has dropped to 90% from 95% of the value of their homes. rule has created a mini-stampede.

"There is a bit of urgency now to get [a refinancing] done before April 19. People are chronically refinancing. I have clients that refinance every two to three years to take the equity out of their home to pay off credit-card debt. The home has become an ATM machine," Ms. Wynhofen says.

A January 2007 Statistics Canada study of personal debt concluded that "increasing mortgage debt for refinancing purposes or taking out home-equity loans implies that homeowners in both [Canada and the United States] are using their homes as a source of cash to finance their spending rather than as an investment."

And in an effort to contain the risks of real-estate speculation, as of April 19 the minimum down payment for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation rises from 5% to 20%.

As for ex-patriot Americans Frank and Susan Williams, they're pretty relieved about their fresh start with a new house.

"It's very different to get a mortgage here. It's a lot less hassle than in the United States," Ms. Williams says.

And because the Williams are not particularly worried about the new mortgage rules, they are already thinking about their next purchase.

"We might be able to buy a little place that's larger when we can leverage this up a bit -- maybe get something cheaper than this with more room,' Ms. Williams says.

Photo by: Dom Dada


Another reason to buy Canada
David Pett, Financial Post
Published: Tuesday, March 16, 2010

A huge wave of Canadian corporate debt that starts coming due in 2012 could have negative implications for stocks and bonds but the refunding onslaught will pale in comparison to the United States, giving investors yet another reason to buy Canada.

"In the U.S., an avalanche of non-financial corporate debt -- almost US$1.4 trillion -- is set to mature over the next five years," said Kevin Cassidy, vice president and senior credit officer at Moody's Investors Service.

"By contrast, Canadian corporate issuers have relatively low refunding needs -- both on an absolute dollar basis, and as a percentage of outstanding debt."

In a report published Wednesday, Moody's estimated that nearly US$75-billion in Canadian non-financial corporate debt will mature in the next five years, including US$57-billion of bonds and US$18-billion in bank credit facilities.

US$19-billion of the total coming due matures in 2010 and 2011, followed by a heavy load of maturities from 2012 to 2014 worth US$56-billion.

Mr. Cassidy said the total represents 25% of the roughly US$300-billion of outstanding Canadian debt.

In terms of annual new issuance of both investment grade and speculative grade debt, which has averaged a total of US$23-billion over the past 14 years, he said the amount coming due does not appear excessive.

"As with U.S. companies, new debt issuance in Canada should be able to cover Canadian issuers' maturities over the next few years -- as long as the economy remains steady and credit markets continue to recover," he said.

While immediate refunding needs are relatively modest, with just US$4-billion maturing in 2010 and US$15 billion in 2011. Mr. Cassidy said the greater refunding requirements in 2012-2014 carry more risk given the expectation that the Bank of Canada will begin to tighten monetary policy ahead of the U.S. Federal Reserve.

If companies do have a hard time refinancing that will restrain their ability to expand and invest and could increase default risk, putting pressure on bond and share prices.

"Still, our caution is somewhat offset by our expectation that Canada's job market will recover faster than that of the U.S., with hiring in Canada encouraged by business optimism and a relatively robust credit market," he said.

South of the border, the landscape for maturing debt is much more ominous.

Thanks to a frenzy of refinancing and leveraged buy out activity prior to the credit collapse in 2007, speculative grade maturities will total US$800-billion in the next five years. US$338-billion of that is due in 2014 alone, which is up from just US$21-billion this year.

At the same time, investment grade issuers have to refinance US$1.2-trillion in loans between 2012 and 2014, not to mention the U.S. government, who will need to borrow close to US$2-trillion.

With so much debt coming due at one time, Mr. Cassidy said one of the big concerns is whether the U.S. high yield market can continue to pump out new issues as it did in 2009 in order to fill the financing void left by banks.

He noted that roughly 60% of the maturities due in the United States between 2010 and 2014 is speculative-grade debt.

By comparison, the composition of Canadian maturities over the next five years is slightly biased towards investment-grade debt, with US$45-billion or 60% of the US$75-billion due, compared to US$30-billion or 40% of speculative-grade debt due by 2014.

"The Canadian mix of investment-grade and speculative-grade maturities is also more favorable than in the U.S., where speculative-grade maturities dominate," he said.

Photo By: Don Moorcroft

Monday, March 15, 2010


Home resales cool for second straight month
Published: Monday, March 15, 2010

TORONTO -- Sales of existing homes in Canada dipped for a second straight month in February, but remained high on a year-over-year basis, as the market may be moving into more balanced conditions, data showed on Monday.

The Canadian Real Estate Association (CREA) said a total of 42,799 homes changed hands last month, down 1.5% from January, as a large gain in sales in Toronto were offset by declines in Vancouver and other British Columbia housing markets.

The real estate group said the Winter Olympics, which were held in the host city of Vancouver and nearby areas, may have played a factor in lower sales in the province last month.

Unit sales in British Columbia were down 13.3% in February from January, compared with a 3.3% advance in Ontario.

Across Canada, sales rose 44% from the same month last year, a smaller gain in national activity from the previous three months. This was in line with economists' views that year-over-year comparisons are likely to shrink in coming months because the recovery of the housing market started in February 2009.

"Housing markets are becoming more balanced," said Gregory Klump," CREA's chief economist.

After a relatively short spell of low consumer confidence during the global financial crisis, Canadian homebuyers were quickly back in the market and have made the housing sector one of the cornerstones of the domestic economic recovery. The pace of the rebound has encouraged debate about a housing bubble.

But with rising supply -- new listings rose for a fifth straight month, up 2.4% -- it could take the steam out of the housing markets as the year goes on, said Mr. Klump.

Ultralow interest rates could further prompt home resales this spring before the arrival of new mortgage rules in April and changes to provincial sales tax regimes in British Columbia and Ontario, before cooling in the second half of the year.

"We should see the Canadian housing market move slowly back into a balanced-market position as higher mortgage rates and prices begin to temper demand," said Millan Mulraine, economics strategist at TD Securities.

CREA said the national average home price in February rose 18.2% from a year earlier to $335,655 (US$329,074)

Photo By: cjhart10

Thursday, March 4, 2010


Low interest rates to power Calgary housing market
By Mario Toneguzzi
Calgary Herald
March 3, 2010

Low mortgage rates will continue to fuel activity this year in the local housing market.

A forecast by Canada Mortgage and Housing Corp. released on Tuesday said sales in both the new home and resale housing markets are expected to increase this year and next year in Calgary and for Alberta.

As well, average MLS sale prices will climb over the next two years.

"Calgary housing markets will benefit from a stronger economic outlook and historically low mortgage rates," said Richard Cho, senior market analyst in Calgary for the CMHC.

"We are expecting to see more activity this year compared to 2009. This momentum is expected to carry through into 2011 as the economy strengthens."

In releasing its 2010 housing market outlook report, CMHC said the Calgary census metropolitan area will see total housing starts rise by 20.3 per cent this year to 7,600 units, followed by a 21.1 per cent hike in 2011 to 9,200 units.

MLS sales in the Calgary area are expected to climb by 10.9 per cent to 27,600 this year and another 3.3 per cent in 2011 to 28,500.

The average MLS sales price in the Calgary region is forecast to jump by 5.5 per cent this year to $407,000 and by another 3.9 per cent next year to $423,000.

Low interest rates continue to drive Canadian housing markets, something that could continue for much of 2010, said Dan Sumner, economist with ATB Financial in Calgary.

"Although interest rates are certainly going to go up eventually, they are rising from a very low level and will probably not be back to neutral levels until 2011," he said.

"However, with home prices near the top edge of some affordability metrics, there could be little room for significant price increases in the near term."

The government of Canada announced recently a number of measures to support the stability in the housing market, said Cho.

"These changes for government-backed mortgage insurance will moderate housing activity," he added. "Changing the qualifying mortgage rate will help ensure homebuyers have a cushion to protect against the risk of increased payments when their mortgage is up for renewal. Some prospective buyers may postpone their purchase while they save for a larger down payment, while others may consider purchasing a less expensive home."

Housing Market Outlook

2010 Y/Y change 2011 Y/Y

Alberta housing starts 24,500 20.7% 29,900 22%

Calgary housing starts 7,600 20.3% 9,200 21.1%

Alberta MLS sales 64,000 10.8% 66,500 3.9%

Calgary MLS sales 27,600 10.9% 28,500 3.3%

Alberta MLS avg. price $358,500 5.1% $372,500 3.9%

Calgary MLS avg. price $407,000 5.5% $423,000 3.9%

Source: Canada Mortgage and Housing Corp.

Photo By: Nikkinoguer

Wednesday, March 3, 2010


When it comes to mortgage details, most people just 'zone out'
James Pasternak, Financial Post
Published: Tuesday, March 02, 2010

It is a legal document that stretches about 30 pages and runs about 10,000 words. Its execution takes no more than a couple minutes and when the ink dries on the signature lines, more times than not it is never read and gets slipped into a file folder, largely forgotten.

But despite its casual handling, the residential mortgage agreement governs the largest debt of over 5 million Canadians and within its fine print are the provisions that can make or break a household's financial future. There's a lot at stake. At the beginning of 2004, Canadians held $517.7-billion in mortgages.

"I think most of the major bank representatives do a good job of explaining these provisions to their clients but I think most people zone out and don't really listen. All they think about is getting a mortgage at 3.8% and ‘I want to get this done'," says Len Rodness, Partner, of Toronto-based law firm Torkin Manes (

But beyond the interest rate there are a wide range of options and clauses in the mortgage agreement that deserve scrutiny. In a competitive lending environment, shopping for the right mortgage can bring significant savings and peace of mind through the amortization period.

Take the case of Hamilton, Ont., couple Kathy Funke and Dan Perryman. When they were shopping for a home in 2003, the interest rate was the top priority. They also wanted flexible prepayment options and accelerated weekly mortgage payments. To leverage the competitive interest rate they received, they went with a variable rate mortgage. They paid off a $230,000 mortgage in 5 ½ years.

"The power in these things comes from people who know how to manage [the] various privileges. It has a huge [savings] effect on amortization....The ideal thing is to understand what your privileges are and then combine them to your advantage -- to what you can afford to do; to fit your lifestyle and ability to pay," says Jeff Atlin of Thornhill, Ont. based Abacus Mortgages Inc.

And privileges there are. You just have to shop for them.

Accelerated Payment Options: Getting the loan paid earlier

It just seemed like yesteryear when everyone was paying their mortgage on the 1st of every month. Now, in addition to the first of the month option, some of the more common options are accelerated weekly and biweekly or semi-monthly options.

These frequency options result in long term savings. For example if one selects the accelerated biweekly option one is making 26 payments in a year, the equivalent of two prepayments per year over the monthly option. When a $150,000 mortgage amortized over 25 years is paid under an accelerated bi-weekly option, the debt is retired in 21 years and the interest savings are around $18,000.

Toronto resident and electrician Karl Klos, 26, selected "weekly rapid" payments on a mortgage amortized over 35 years. The mortgage payments are made each week but he added the "rapid" option by increasing the amount paid. Mr. Klos says that the payment frequency will pay off his mortgage in 25 years instead of 35 years.

"I can't understand why anybody would do monthly payments anymore now that the banks offer the ability to have weekly payments. It may be a cash flow situation. If you do a weekly mortgage payment it could save you a significant amount of money," says real estate lawyer Len Rodness.

Restating mortgage agreement vows

It doesn't take long after one signs a mortgage agreement to hear from a neighbour or friend that they received a better rate. So when you dig out the mortgage agreement see if there's a clause that allows borrowers to renegotiate their agreement before the end of the term. The bank might use a model called "blend and extend." For example, if one has a $100,000 mortgage at 6% mortgage with two years to go they might blend it with the current five year rate of 3.79%. So according to mortgage broker Atlin when they average out 2/5 of the mortgage at 6% and 3/5 are at 3.79%, the customer will get a new reduced rate of about 4.6%. But the borrower is tied to the bank for another 5 years.

Putting spare cash against the mortgage with no penalty

Almost all mortgage agreements have options for mortgage prepayment without penalty. Klos's mortgage agreement allows prepayments of up to 15% of the annual balance. Most financial institutions provide prepayment options in the 10-20% range. Some lenders allow borrowers to make the prepayment any time during the year while other agreements restrict the prepayment to the anniversary date.

Also, some financial institutions allow customers to make multiple smaller prepayments during the year as long as they don't exceed the annual limit. Funke and Perryman were able to retire their $230,000 mortgage in 5 ½ years primarily because of the prepayment provisions in their mortgage.

Coming up with more money for each payment

Some lenders will allow borrowers to increase the payments without penalty. Depending on the wording of the mortgage agreement the increased payments can range from around 15% to 100% of the current payment. So if one is paying $1,000 per month under the 15% rule, a borrower can raise it to $1,150 per month. Klos's weekly rapid payment plan was based on him raising the weekly payments by 5%.

"Payment and amortization are a function of each other. Any time you raise the payments you shorten the amortization; any time you shorten the amortization you raise the payment," says Mr. Atlin.

The mortgage prenuptial: Penalties for getting out of your mortgage

"A mortgage is a contract first and foremost. It is a contract between a borrower and the lender," Atlin says. And if someone hasn't felt that cold business approach during the course of their mortgage, they certainly will if they try to leave early. Most borrowers pay out their mortgages when they sell their house, win a lottery or are offered a better interest rate by another company. Until recent years, the standard penalty for breaking a mortgage agreement was three months of interest. Paying out a $200,000 mortgage could amount to a $2,500 penalty.

In many current mortgage agreements, the penalty for an early exit (and not extending) is either three months of interest or an interest differential, whichever is greatest.

The mortgage differential penalty can be quite expensive. If a mortgage is at 5% interest rate and you have three years left in your term, the bank will use the difference between the agreement rate and the current market rate to calculate the penalty. Using the 5% case above, let's say the current 3-year mortgage is available at 3.5%. The bank will charge the difference between 5% and 3.5% for the balance of your term.

Bank customers who have an open mortgage with a variable rate can usually pay them out with little or no penalty. Some mortgages are closed for the first few years and then revert to an open option. The penalties, if there are any, would be much lower once the mortgage converts to an open one. If one can, it would be best to wait until the mortgage kicks into open status.

When paying out the mortgage try to have some of it calculated as your annual no-penalty prepayment option. Therefore, if you are paying out a $200,000 mortgage and you also have a 20% per annum prepayment option you might be able to save penalties on $40,000. If the mortgage prepayments can only be done on the anniversary date, make sure that is the day you select to pay out the mortgage.

Mortgage Lifelines

Mortgages are often signed and sealed with the borrower having every intention to pay. However, the world is paved with best intentions and recessions are everyone else's problem until the boss comes into your office with the bad news.

"That is something that nobody turns their attention to at the time. The original document is done. The legal issues are in that original document. For a practical point of view given the state of the economy these [clauses] might be something beneficial," said Len Rodness of Torkin Manes.

Some mortgages include a Rainy Day option. This option allows the borrower to skip one principal and interest payment each mortgage year. The interest portion of the skipped payment or payments will be added to the outstanding principal balance.

Changing amortizations

Although financial institutions can change the amortization with the click of a mouse, they are reluctant to do so. In fact, some say outright that they don't allow it and this is written into the mortgage agreement. If there are any requested changes it's much easier to go from a higher number (lets say 25 years) to a lower number (lets say 15 years), than the other way around. But the inside scoop is not to take no for an answer. If you are looking to increase the amortization, keep going up the chain of command until the CEO says no.

Photo by: Marco Bellucci


Use your window smarts

How to choose among PVC, fibreglass, wood and aluminum
By Paula McCooey, Ottawa Citizen;
Canwest News Service
February 27, 2010

Location may be real estate's best friend, but the view is the home's soulmate. Windows frame our vision of the outside world. As more people are looking for the best possible perspective, they are also hunting for smart ways to increase the value of their homes.

Windows are a good starting point.

Newer, bigger, wider, taller, more efficient windows are a hot upgrade for homeowners. Now there are more options than ever.

Architect Christopher Simmonds works on the premise that, aside from providing shelter, a house is primarily a place to experience nature from within.

"For me, windows are all important. So when we are designing a house, we are always thinking, what are the views trying to capture? Is it a tall tree? Is it a horizon? And how wide should we take the window to capture the view (but) screen out what we don't want to see, like the side of a neighbour's house or the road."

In the past, windows were the weakest link in the home, says Simmonds, who has crafted a reputation for connecting inside and outside spaces by using a lot of glass.

In the early years, when log cabins were the house of choice, people built small windows for structural reasons and because they let in the cold.

Technologies have vastly improved and many Canadians are attracted to a Mediterranean concept of living with lots of light.

"There is such a desire to open up to the outside to create this integration," says Simmonds. "Fortunately, we have the technology to go along with it."

It's common to see triple-glazed windows with low-e coatings and argon gas, says the architect. "The thermal performance of these windows is significantly better, three or four times better, than windows used to be 25 or 30 years ago."

Window company owner Bob Milne has also seen a lot of changes in the past 20 years, with owners of older homes and those building new homes looking for the best windows to stop drafts, resist mould and rot and provide added security.

Typically, they choose from four types of frames that carry their own strengths and weaknesses.

PVC windows

PVC, or polyvinyl chloride, are well suited for buyers looking for extremely low maintenance. These windows require no painting.

"You don't have to paint against weather stripping," says Milne, adding the frames come in trendy colours. "You don't have to paint against handles or cranks. You just clean your windows."

Milne notes one of the downsides to PVC is its tendency to expand. So why would you want it?

"PVC is the most economical product on the market right now," says Milne. "So say windows are $10,000 in PVC, they may be $14,000 in fibreglass."

Given PVC is extremely cost-efficient, they are the current industry standard -- which is why most companies that make the cranks and the hardware for window companies are designing them mostly for vinyl windows.


Fibreglass has been around for years, but it's still a relatively small player in the world of windows. Its big advantage is that it expands very little, allowing the caulking to outlast other installations.

"Fibreglass does not expand any differently than glass," says Milne. "It's made of glass. It's glass fibres."

People concerned about having the highest energy efficiency will search out fibreglass products. But they come with a higher price tag, and there are some limitations: It's hard to get them made into circular shapes and curves.


Wood is the original window frame material, but these days it's usually used for high-end jobs and comes with regular maintenance. In areas with weather extremes, it's hard to keep paint on a wooden window. They usually have aluminum cladding outside and wood on the inside.

"Some people forget the wood and then let it go," says Milne. "Then it peels inside and it's not as good a look as the vinyl window. They are not great in this climate."


Aluminum has been widely used in highrises for its strength and longevity, which is of utmost importance when dealing with high winds several floors up. They are light, strong, low-maintenance and easily formed into complex shapes. However, they conduct the cold. Milne says aluminum expands, too. "It's less than vinyl, but more than wood or fibreglass."


Value for your window dollar

Costs vary from the picture window, which is the cheapest, to a double operating casement, in which the two windows both crank out.

Most customers are looking for Energy Star products, which can range from double pane up to quadruple pane for enhanced thermal efficiency, with heat-reflective coating.

The best way to check a manufacturer's rating while shopping around is by visiting

Windows with argon gas help insulate against sound, heat and cold. And heat-reflecting coating, or low-emissivity (low-e), is applied to the inside surface of one or more panes to prevent heat from escaping.

Some low-e versions also helps protect against ultraviolet light, which can damage furnishings.

Chris Danko, manager of a window warehouse, suggests that if a customer wants the windows installed by a reputable company, then double the price of the window and add about 15 per cent.

Danko's most popular window product is vinyl. He says a 72-by 60-inch vinyl picture window is $495 wholesale; single, side sliders are $504.75. A double operating encasement, where both windows crank outward, are $741.46 and are the most efficient.

"The casement and awning windows have a better energy rating overall in the frame," says Danko, adding that sliding versions are less structural and technically less efficient.

"You are getting better insulation in the frame, and there is less air/water filtration because they are a tighter seal with the modern versions.

"It's not like the old-fashioned ones that wouldn't shut all the way, the wood warps and the hardware is the pits. There's more to the frame."

The crank style is the most popular, however, they are also the most expensive. If people are building new and are in a budget struggle, they are usually going to try to put the casements on the front face of the house for increased resale value.

Tuesday, March 2, 2010


Home not selling? Clean, paint and pare price
March 2, 2010
Jennifer Wilson-Speedy

If only selling a home was as simple as putting up the "For Sale" sign. Instead, it's an emotional process balled up with agonizing financial decisions and life changes that only get more stressful the longer the property's on the market.

Sofie Allsopp helps Brits make over their homes to speed up the sale of stagnant properties in Unsellables UK ,an across-the-pond rethinking of the Canadian Unsellables series.

This season, Allsop says, brings "new people (and) some really great properties" – at least, once they've cleared up the filth, clutter and worn-out decor.

"I'm always amazed when people's houses are dirty when they put it on the market."

In addition to the general turnoff that is grime, clutter "makes a house look so much smaller," she says, recalling an episode where the newlyweds' house was piled so high with boxes "you could barely see the floor."

These kinds of messes not only eat away at valuable floor and counter space but also hinder prospective buyers' ability to envision their own belongings in the home, which is often a key step in their decision making.

So, if you're preparing to sell, it's worth the effort to pare down before the first showings, including stowing family photos and mementos. Allsop also recommends putting oversized or extra furniture into storage to help make rooms feel larger.

Plus, she notes, cutting down on clutter now means less packing when moving day comes.

Faded decor is another Unsellables no-no. Often in houses that have been lingering on the market, "everything just looks a bit tired and unloved," says Allsop.

As a result, paint is "one of the most important things to do before you put in on the market," she says, suggesting sellers opt for "pale but interesting" colours, such as muted greens and blues, to help create a fresh look without imposing a bold, and potentially intimidating, personality on the space.

Sellers must also consider their furniture placement. Paring down will help open up spaces, but pieces must also be arranged to emphasize the home's flow, which means natural walking paths and doorways shouldn't be blocked. Try to showcase the flexibility of the space too. For example, convey that the home office could also be a bedroom by adding a small bed.

To prevent your home from languishing on the market, Allsop says one of the most important steps is getting a real estate expert to help you set a realistic price. She says a lot of the time people list their homes for too much money – and it ends up sitting for months until they lower the price.

In addition to delays for the sellers, listings that sit on the market also lose appeal with prospective buyers.

"If a house has been on the market for a few months, people will keep seeing it in their (web) searches and it will start to feel stale," she explains. "Price it for sale."

And, she adds, don't forget to give your home's exterior a little TLC – she notes that will be the photo on your Internet listings.

"You have two seconds to impress before someone clicks on to the next house," she says. "No one looks at a home with an overgrown yard and says, `This is the house for me.' "

Mowing the lawn, painting the front door, stowing the garbage bins and putting out some flowers "will instantly make the front of the house look smarter."


Housing market shows 'momentum' in February
Real Estate Sales, Prices Firm Up
By Mario Toneguzzi, Calgary Herald
March 2, 2010

The local housing market showed signs of balance, not a bubble, in February, according to the Calgary Real Estate Board.

In releasing its official MLS numbers for the month, the board said sales and average prices increased in both the single-family home and condominium markets compared with year-ago levels.

"We're just pretty steady and we're getting some momentum, but that's fairly typical in a normal year and I don't even compare it to last year because last year wasn't a normal year," said board president Diane Scott.

"Right now, where we sit in February, it's pretty stable. It's a comfortable market and we're almost close to equal buyers and sellers."

Single-family home sales for February were 1,035 units, up 25.5 per cent from February 2009's 825 units. The average sale price hit $458,254, an increase of 10.3 per cent from last year's $415,568.

Also, condo sales were up a whopping 56.3 per cent to 536 units compared with 343 sales in February 2009. The average price also increased by 5.2 per cent, to $282,880 from $268,971.

Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said market watchers have to be careful when comparing February numbers with a year ago.

"In many ways it would be like comparing apples to oranges," Cho said.

"Market conditions now are stronger compared to this time last year, when conditions were more uncertain. We are still seeing steady demand for homes, especially for the entry-level product. Low mortgage rates continue to support demand for home ownership.

"The selection of homes for prospective buyers has also improved, with active listings trending up. The resale market has settled into balanced conditions, putting modest pressure on prices."

A year ago, Cho said, people were losing their jobs. They were waiting on the sidelines to see where the economy was going and where house prices were headed.

Now, with things improving and the economy and housing market stabilizing, prospective buyers are more comfortable with making larger purchases such as homes, added Cho.

Scott agreed the economic situation last year had an impact.

"We were in such a slump and there was no consumer confidence," she said. "It looked like we were going downhill for a long period of time.

"This year, the consumer confidence is up, the interest rates are low still and hopefully that will stay for a little while longer and afford-ability is there. A lot of people who were sitting on the fence last year are coming off."

She said the Calgary housing market has shifted from fragile to fervent in just over 12 months. The city is also seeing a moderate rise in the number of competing offers on homes.

For towns just outside Calgary, sales were up 55.8 per cent to 335 units from 215 a year ago but the average sale price dropped by 4.82 per cent to $353,912 from $371,829.

In the country residential market, which includes acreages, sales increased by 84.38 per cent, going from 32 last year to 59 last month, with the average price remaining virtually the same at $748,506.

Scott said many first-time buyers are seeing this as the time to take advantage of record-low interest rates.

"We will see a rise in both our inventory and demand this spring -- and we expect both to stay in a healthy balance. Prices will edge up as the year progresses, but the rise in prices will be moderate," added Scott.

Single-family listings in Calgary added for the month of February totalled 2,154, a 4.72 per cent jump from a year ago.

New listings for condominiums for February were 1,109, up 24.3 per cent from last year.

"The story of the housing market is all about interest rates at the moment," said Scott. "When the rates will rise is the wild card. Canada's economic recovery showed marked improvement in the final quarter of last year. This will put pressure on the Bank of Canada to begin raising rates sooner than planned to curb inflation."

Calgary Home Sales In February

Single-family homes 2009 2010 Change

Sales 825 1,035 25.5%

Average Price $415,568 $458,254 10.3%

Median Price $375,000 $411,000 9.6%

Condominiums 2009 2010 Change

Sales 343 536 56.3%

Average Price $268,971 $282,880 5.2%

Median Price $249,900 $265,900 6.4%

Source: Calgary Real Estate Board

Monday, March 1, 2010


World Capitals Of The Future
Move over, New York and Paris.
Joel Kotkin

For most of those which were great once are small today; And those that used to be small were great in my own time. Knowing, therefore, that human prosperity never abides in the same place, I shall pay attention to both alike

--Herodotus, Fifth Century B.C.

If the great Greek chronicler and "father of history" Herodotus were alive today, he would have whiplash. In less than a lifetime, we have seen the rapid rise of a host of dynamic new global cities--and the relative decline of many others. With a majority of the world's population now living in cities, what these places do with their new wealth ultimately will shape this first truly urban century.

Just 25 years ago, when you walked down the Bund in Shanghai, there were few cars and no modern towers. The rough sidewalks expanded into the streets to accommodate a mass of poorly dressed pedestrians. A decade later, Moscow was in the midst of a particularly grungy interlude, filled with stolid people waiting in lines for shoddy consumer goods. You could hail a cab, and pay for it, with a pack of Kents.

Today, these two cities have emerged from their socialist shackles with scores of high-rise projects either already up or on the drawing board. This, of course, has come with a price; Moscow hotel accommodations--cheap if dingy a quarter century ago--last year ranked as the world's most expensive. Shanghai, meanwhile, has bustling traffic, a new subway and a 100-story office tower; it is about to begin construction on another that tops out at 121 stories.

Also remarkable: the rise of other great cities--Mumbai, Bangalore and Hyderabad in India; Beijing; Sao Paulo, Brazil; and Dubai--that a quarter century ago were either obscure or better known for their destitution than their rapid construction.

Of course, none of these cities' wealth or economic power have passed leading global centers like Tokyo, London, Paris, New York, Chicago, Los Angeles, Seoul, Singapore and Hong Kong. But our list of emerging global cities is clearly gaining on them--and with remarkable speed.

The main reason lies in economic fundamentals. Over the past 25 years, per capita income, based on purchasing power parity, grew by over 400% in India and a remarkable 1,500% in China. The bulk of that wealth came from urban centers like Mumbai and Shanghai, while the largest concentrations of poverty remained in the countryside. In that same period, U.S. per capita income grew by 245%; growth in most Western European nations was less than that.

The nascent recovery in the world economy will certainly amplify these trends. China, as opposed to the U.S., is leading the economic resurgence, drawing in commodities from its rising business partners in all continents.

For the most part, basic industries lead the way. Manufacturing has propelled the rise of the great Chinese cities. In Brazil, Sao Paulo's growth spans everything from shoes and aerospace to technology. The city also dominates Brazil's growing energy sector, both renewable and traditional. Energy--overwhelmingly of the fossil fuel variety--has powered the rise of Moscow and Dubai. It's not always pretty. As the old Yorkshire saying has it, where there's muck, there's brass.

Of course, the past year's drop in oil prices has set back things a bit. California real estate investor Bob Christiano notes that more than half of the construction projects in the United Arab Emirates--worth $582 billion total--were put on hold in 2008. But now that the price of oil seems back on the rise, you can expect things to perk up in places like Dubai, Moscow and Sao Paulo.

Not all our emerging cities are in the developing or former Communist world. North America boasts at least three genuine emerging world cities: Calgary, in Canada, and Houston and Dallas. These regional economies have been built around energy and expanding industrial power. They also have enjoyed rapid population growth. Last year, Houston and Dallas grew more than any other metropolitan region in the country; over the past decade, their populations have increased six times more rapidly than New York, Los Angeles, Chicago or San Francisco.

But it's not all a demographic game; cities like Phoenix and Las Vegas have similarly enjoyed rapid growth but do not fit on the rising global cities list. The key difference lies in the Texan cities' rising corporate power. Houston, with 27 Fortune 500 firms, has passed Chicago in the number of Fortune 500 companies, while Dallas, with 14, ranks third. Together, the two Texan cities account for about as many Fortune firms as New York, once home to almost a third of the nation's largest companies.

Similarly, Calgary has become Toronto's main challenger for corporate headquarters in Canada, a move sparked not only by oil wealth but lower taxes and regulation. The region now easily boasts the highest per capita income in the country. Its long-term main rival in growth may prove to be provincial cousin Edmonton, which sits closer to Alberta's massive oil sands deposits.

In Australia, Perth, located on the Indian Ocean and close to critical commodities such as iron ore, has also emerged in a big way. Australia's richest city has become a major urban threat to long-established Sydney and Melbourne, with growth driven both by domestic as well as foreign migration and development.

These emerging world cities also have survived the housing crisis much better than their national competitors. The growth of India and China has created an ever-richer market for commodities, as well as expertise residing in places like Perth, Calgary, Dallas and Houston, much of it built around commodity and resource extraction. The evolving ties between burgeoning world cities also spill over into the growing tourism industry in Perth and the expanding medical service complex in Houston.

Another group flocking to the developing world's super-stars: architects and civil engineers, many of them from more established first-world cities like New York, London, Los Angeles and San Francisco. Over the past 25 years, most of the biggest rail, road, airport and sanitation systems have been built not in Europe or America, but in East and South Asia, the Middle East and Brazil. Even as the West tries to work through its housing crisis, residential real estate prices are on the rise in cities like Mumbai, Bangalore, Beijing and Shanghai.

The lure is irresistible, particularly for the young and ambitious. Just last month, Adam Mayer, a 20-something formerly employed architect from San Francisco, relocated to Beijing. He sees the chaos around him, but has plunged into the opportunity. "As I wait for our economy to recover," he told me, "I am enjoying the ride as I witness perhaps one of the most compelling urban development stories of the 21st century."

High-rise office buildings have emerged as the biggest signs of the new order among global cities. Shanghai is already the fourth-tallest city in the world, with 21 buildings over 700 feet. Of the world's 10 tallest buildings, only one--the former Sears (now Willis) Tower in Chicago--resides in the U.S. or Europe. There are now more tall buildings in Asia than in North America, and of the tallest 10 completed in 2006, four were in China and four in the Middle East. When completed, the Burj Dubai will stand as the world's tallest.

Although less awesome, the shift in skylines can also be seen in Russia. Until recently, Moscow had no buildings higher than the 787 feet of Moscow State University. Now, the Kremlin city has 14 towers complete or on the way, including one that will replace the current Naberezhnaya Tower; it will be Europe's tallest building. Another project, a billion-dollar Chinatown, is being proposed with investors from China.

Even with their rapid growth and increasingly modern gloss, these cities don't tend to make the usual lifestyle-based "best cities" lists. Munich, Z├╝rich, Copenhagen and Vancouver may be somnolent compared to Beijing or Bangalore, but they tend to be far wealthier, better organized, cleaner and safer--and they have far less poor people. Even our current global metropolises like Tokyo, London and New York have been able to hone the cultural amenities that make for a gracious urbanity.

In contrast, by their very nature, boomtowns often give shorter shrift to the environment, the aesthetics of place and the more important aspects of community. Shaghai's "tofu like" soil may not be ideal for massive high-rise buildings, just as some of Dubai's buildings, some believe, may be helping to erode the Persian Gulf coastline.

These upstarts are often too busy building and trying to impress the rest of the world to focus on architecture or plan niceties to make the heroic routine of everyday life more pleasant, notes London-based architect Eric Kuhne, who has worked on major projects in Moscow, Dubai and other Persian Gulf cities. Such places tend to be "abrupt and rude" in their development, but also "honest in every way"--they are the new kids on the block, with more money and power than seasoning.

Like parvenus throughout history, Kuhne adds, these burgeoning power centers harbor "a desire to be seen as relevant, as 'modern', as shockingly new. In the stampede for a shining presence on the horizon, they both have been mesmerized ... perhaps hypnotized ... by their own profligacy of uncontrolled development."

Yet, Kuhne reminds us, you could have said the same thing about now-reigning world capitals like New York, London, Tokyo, Chicago or Los Angeles. These cities also "experienced a similar riot-panic in the post-war boom years of the '50s. We destroyed the intricacy of centuries of urbanism [and] sacrificed community and family fabric for home ownership and autonomy."

Ultimately, the salvation for these cities may lie, Kuhne suggests, not in mimicry of Western ways but in drawing inspiration from their own ancient traditions. After all, Chinese, Arabs and Russians are not newcomers to city-building. But however they decide to build their new cities, these countries will be providing the blueprint for all of our urban futures.

Joel Kotkin is a presidential fellow in urban futures at Chapman University. He is executive editor of and writes the weekly New Geographer column for Forbes. He is working on a study on upward mobility in global cities for the London-based Legatum Institute. His next book, The Next Hundred Million: America in 2050, will be published by Penguin early next year.

Calgary, Canada

Calgary has become Toronto's main competitor for corporate headquarters in Canada, a move sparked not only by oil wealth but lower taxes and regulation. The region now easily boasts the highest per capita income in Canada, and its gross domestic product is forecasted to grow 4.2% this year, according to the Conference Board of Canada. Furthermore, it is Canada's third-most diverse city and was ranked as the No. 5 "most livable" by the Economist Intelligence Unit this year. Forbes ranked it the world's cleanest city in 2007, despite Calgary's large oil industry.

10 TIPS IN 2010

Ten ways to get more money from your home
Tim Kiladze
Published: Wednesday, February 24, 2010

At last some hope for American homeowners: A week ago the National Association of Realtors reported that fourth quarter existing home sales surged almost 14% over the previous quarter. Still homeowners must be realistic; the median existing single-family home price remains 4.1% below 2008 fourth quarter levels, according to the same report.

The freefall in home prices may be over, but the buyers' market persists -- there's stiff competition to get a house sold for a good price. In a competitive market sellers need to make every effort for their properties to appear more attractive so they sell for more.

And it's the simple touches -- not the big renovations -- that often matter the most.

Clean and De-Clutter
HomeGain's 2010 Home Sale Maximizer Guide, which identifies key repairs to increase your home's selling price, says "cleaning your home and freeing it from all clutter can be the most important of all pre-sale activities." Suggested tips include organizing closets and storage rooms, removing all personal possessions and removing appliances from kitchen counters to free up the space.

Staging means dressing up your home by hanging artwork, putting out fresh flowers or turning on the fireplace in the winter. The techniques may seem basic, but a 2009 survey of Realtors found that $300 to $400 spent on staging can yield a $1,500 to $2,000 increase in home price.

Online Advertising
Most home buyers browse online listings, and good ads with video walk-throughs are clicked on 150% more than those without. Web appeal is more important than ever in selling a home.

New Front Door
Jean Nayar, author of Staged to Sell (or Keep), says a home's exterior can have a big impact on potential buyers. For cash-strapped owners, replacing the front door is a cheap exterior enhancement that can have a big impact.

"Tier 1" Renovation
Bill Carter, president of the National Association of Remodeling, recommends piecemeal renovations rather than complete overhauls, such as upgrading HVAC systems and hot water heaters, as well as installing double- or triple-paned windows. Homeowners who are able to get a small loan should invest in energy-saving projects and utilize the available tax credits.

Outdoor Entertainment Areas
Because of the recession, "people are starting to realize they've got to rethink their way of life," Carter says. He notices that families in warmer areas are emphasizing outdoor living space, such as patios and decks, rather than taking vacations.

Attic Bedroom
An attic bedroom is a great green renovation for families able to afford it. Instead of building an addition, homeowners can add space without increasing their carbon footprint. "You already have the roof and the joists and the walls there, so you can take advantage of costs already spent," Nayar says.

Inexpensive "Greening"
Installing water-conserving faucets and adding weatherstripping to movable joints are good, money-saving improvements for buyer and seller alike.

Pre-Sale Home Inspection
A pre-sale home inspection may not add value to your home, but it can certainly prevent loss, says David Tamny, president of the American Society of Home Inspectors. He says some homeowners are now advertising their completed pre-sale inspections as added insurance that their home is ready for sale.

Neutral Paints & New Carpets
It's easy to get lost in the suggestions for increasing home value, but a new coat of a neutral-colored paint and new (or shampooed) carpets are always a good base from which to start.

Look the Part

Louis Cammarosano, general manager of HomeGain, a real estate marketing company in Emeryville, Calif., stresses the importance of subtle yet crucial marketing tactics such as staging, or dressing up your home. "It's the same thing when you go for a job interview," he says. "You're looking at a person -- how they dress, how they speak. You're not looking at their credentials initially."

Last year HomeGain surveyed 1,000 real estate agents to determine which home repairs offer the biggest rewards. After ranking for return on investment, the survey found that cleaning and de-cluttering -- including removing personal possessions, polishing woodwork and glass and removing excess furniture -- is the most important. Spending US$100 to US$200 tidying up can increase a home price by US$1,500 to US$2,000.

Putting out fresh flowers, hanging artwork and turning on working fireplaces in the winter all can be equally helpful, but there are exceptions to the rule, Cammarosano says. In some parts of the country, including California, staging seems to matter more than it does in other places, where online presentation might be more important.

"Web appeal is the new curb appeal," says Julie Reynolds, senior director of PR at, which is run by the National Association of Realtors. She recommends making your home stand out online because "the value of a home is what a buyer is willing to pay." Ads that stand out often include walk-through videos; those that do are clicked on 150% more than those without, she says.

Sellers should also think about the type of buyers they have in mind. Targeting families? Make the house look lived-in. Hoping for a young couple to move in? Remind them that kid-friendly parks and other activities are nearby.

Renovate with Marketability in Mind

Certain renovations can also add value, but they don't have to be major overhauls. Jean Nayar, author of the book Staged to Sell (or Keep), which offers simple suggestions to add home value, says installing a new front door is an inexpensive exterior improvement. She also suggests replacing worn-out siding. New fiber-cement siding will generate the best return on investment, but vinyl siding will work for those with smaller budgets.

Bill Carter, president of the National Association of the Remodeling Industry, also stresses "piecemeal" renovations.

"Without HELOCs [home equity lines of credit], without property values, without lending, without people working, you're not going to see a big reach for [big renovations] yet," he says. He suggests upgrading HVAC systems and hot-water heaters, as well as installing double or triple-paned windows.

Outside projects can also add value, depending on geographic location. Particularly in warmer climates, consider adding a new patio or deck. But if you do have the budget for a big renovation, Nayar recommends thinking green.

"There is a trend in general to reduce your carbon footprint," she says. "Consumers are more aware of green living concepts and reducing your energy consumption because of the good that it will do the planet."

For example, creating an attic bedroom is a good way to add space to your home without using more energy. Plus, "you already have the roof and the joists and the walls there, so you can take advantage of costs already spent," Nayar says.

But thinking green doesn't have to be expensive. She also recommends installing weatherstripping and low-flow faucets as cheap alternatives.

Safety First

Pre-sale home inspections have gained traction in the depressed market because buyers are trying anything and everything to outdo one another. With a heavy supply of houses on the resale market, a pre-sale inspection can provide extra assurance that there won't be any surprises after signing the sale contract. David Tamny, president of the American Society of Home Inspectors, admits these inspections may not identify ways to add value, but they can certainly prevent a loss of some.

"Because of the do-it-yourself movement, people do things that are unsafe," he says, citing botched ceiling fan installations and improperly spliced wires as examples. If these problems are not detected when the home is sold, some sale contracts allow buyers to renegotiate prices if inspectors find them after signing.

Sellers needing to move quickly, however, should remain focused on the basics, Nayar says -- neutral paint jobs and replacing or cleaning carpets. That could be the difference between a signed contract and the for-sale sign remaining on the lawn.

Photo By: Tosska