QUESTION EVERYTHING

To build or to buy, that is the question
 BY ANDREA COX

CALGARY HERALD SEPTEMBER 27, 2013

It’s every homebuyer’s dilemma — to buy an older home in an established neighbourhood, or a new home in a new community.

With myriad options to choose from, narrowing down the choices can be overwhelming.

“I always filter everything through an investment lens,” says Todd Talbot, real estate guru and co-host of Love It or List It Vancouver, a TV show on the W Network. “But I also believe that if it is done well, you can have your cake and eat it, too.”

There are a couple of different ways to look at it, he says.

“The new build has a certain mystique to it — a certain flair,” says Talbot, recalling that the first home that he ever purchased, a condo, was brand new. “I fell in love with the idea.”

Certainly, a new home has a visual and kinesthetic attraction. You can smell the newness, see the perfection of the finishes and know that most likely, you won’t have to do a thing to it for quite a while.

“The big trap is that you see the show suite and you fall in love with the idea of it,” says Talbot. His advice is to be clear about what the base price includes — from landscaping and the basement development to the appliance package.

Clarity surrounding timelines is also of tantamount importance when buying. Will you be selling in five years? Ten years?

You don’t want to detract from the fun of buying a house, but it is necessary to be realistic because, eventually, you are going to sell.

That said, Talbot suggests buyers understand the future development of a new community and the inherent future change in variables like traffic, noise, landscaping and neighbours. “Chances are in five to 10 years, when you go to sell your home, it will be a much different environment.”

Ideally, the goal is to find a neighbourhood that is on the upswing, with the anticipation of capital appreciation.

“I am willing to buy in a neighbourhood that is not necessarily the absolute best, if it has some room to grow. I like neighbourhoods that are dynamic.”

As the saying goes, real estate is all about location, location and location, says Ross Pavl, a Calgary-based realtor with Re/Max.

“You definitely need to consider the area,” he says. “It has to always be in demand. You want to be close to amenities, to transportation, a university and a major work area. All of those factors will be a huge influence when you go to sell.”

When a city surpasses the population threshold of 1 million, the market shifts, he says. “Inner-city real estate will appreciate almost twice as fast as the suburbs,” says Pavl.

The demand is all about lifestyle — being close to the restaurants and theatres, not to mention the walkability factor. But that is also tempered with the fact that Calgary buyers are attracted to the appeal of the new.

“As soon as something is 10 years old, everyone in Calgary considers it old,” he says. “They would rather just buy a piece of land and build something new.”

Of course, price is also a factor. Buying a smaller home closer in and boosting its market appeal through renovations are certainly coveted options, but for many, the higher price takes them farther out into new communities in the suburbs, where prices are more affordable.

When it comes right down to it, real estate investments are all about controlling the variables — the location, amenities and visceral experience of the home, says Talbot. “Not to say that one home or location is better than the other, it’s just all about understanding what you are buying.”

Photo By: Captain Camera

PREDICTING TRENDS

Don't forget to consider a new condo's palette
BY MARILYN WILSON
POSTMEDIA NEWSSEPTEMBER 7, 2013

There are many factors to consider when choosing a new condo. Competing for attention are details concerning location, site orientation, views, size, potential for resale and, often most important, cost. There is, however, another set of factors that buyers may not fully consider. These are the interior design features that come with the condo. Specifically, I want to discuss condo palettes - the hues of walls, fixtures, cabinetry and window treatments.

Let's assume you are not one of those lucky individuals who is starting with a bare-bones unit for which you will choose all spatial arrangements, appliances and finishes. In reality, most new buyers cannot boast of extensive experience in condo design and an absence of budget restrictions. Rather, they rely on pre-designed packages that include specific colour palettes and decor choices.

One way developers attract buyers is through interior design. They offer a variety of samples of flooring, cabinetry and counter-tops. Builders are always thinking forward in the rapid-paced environment of condo development, so predicting potential colour and texture trends when a condo is ready to be sold can help differentiate a builder's offerings from those of the competition.

Not only that, but as condo showrooms come out months - sometimes years - before construction, colour trends are often chosen in advance. For instance, 2014's must-have features and colours have already been established.

Builders usually enlist the expertise of the best interior designers in the country to develop their interior design palettes. Since many of these designers' fees are beyond what most individuals are willing to pay, a buyer can benefit indirectly from a designer's skills by purchasing a condo whose palette is a result of careful consideration.

In general, builders try to supply prospective purchasers with the hottest and most desirable designs, thereby outdoing their competition.

Model suites will give you your first taste of a condo's palette offerings. On show are a spectrum of colours, textures and design features that can be selected at no extra cost. The more you relate to the basic palettes offered, the more you get your money's worth.

If you have trouble picturing yourself living among this decor, it may be time to consider another development with a different designer. This will prevent you from struggling to accommodate someone else's taste. To complicate matters, the builder will offer a wide selection of extra-cost upgrades - flooring, appliances, built-ins, counter-tops and backsplashes - the list goes on and on. If you don't see an upgrade you want, just ask, as most requests can be accommodated.

If you have a clear sense of what works for you, the selection process can be relatively straightforward. Remember that a reputed designer has been working in the background on your behalf, and now the builder will supply an experienced consultant to help with the decision-making.

Despite this, you may also want to enlist the services of your own designer to help organize the palette and options to create your own unique space. If you go this route, make sure to pick a designer with similar tastes to your own. This is best done by viewing examples of their work, something most designers will be happy to arrange.

You may be wondering what the current trends are.

There is movement away from the beige-on-beige theme to more sophisticated taupes, greys, pewters, creams, almonds and cappuccinos. These rich tones add variety and interest to spaces while maintaining the virtue of not being statements in and of themselves.

Textures are evolving rapidly with many designers forgoing classic granite and tile themes in favour of composites and polished concrete set off by smooth or sandblasted glass or stainless-steel backsplashes.

It's important not to forget that seasonal views may have a strong influence on your colour palette. For instance, you may want to opt out of an all-white palette, as the decor will suffer when the city is blanketed in snow. Whatever you choose, try not to go too bold with your palette, as you may get sick of it or suffer during resale.

Otherwise, follow the instincts of your taste, and happy condo hunting.

Marilyn Wilson has been selling real estate for more than 24 years and owns Marilyn Wilson Dream Properties Inc.

SIXTEEN TONS

Are you house rich or house poor?

By Jason Heath  

Financial Post September 17, 2013

According to Statistics Canada, about one-quarter of Canadians are spending too much on housing costs. “Too much” is defined by Canada Mortgage and Housing Corporation (CMHC) as 30% or more of household income. Are you house rich and cash poor?

First off, it’s important to understand what CMHC’s “household income” refers to in order to measure if you are over or under the suggested 30% threshold. They define household income as pre-tax household income, which is a questionable metric due to our tax code.

We have a graduated tax system in Canada where every taxpayer files their own tax return, so there can be a big difference in after-tax income between two households with identical household incomes. A household where two people are earning $50,000 each in Ontario, for example, has after-tax income of about $75,840. A household where one person is earning $100,000 – the same gross income as the $50,000 times 2 household – has only $69,841 of after-tax income. That’s a difference of about 8%, so not immaterial.First off, it’s important to understand what CMHC’s “household income” refers to in order to measure if you are over or under the suggested 30% threshold. They define household income as pre-tax household income, which is a questionable metric due to our tax code.

What are “housing costs”? According to CMHC, these costs include rent and utilities for renters. For homeowners, included are mortgage payments, property taxes, condo fees and utilities.

Several factors are ignored by the 30% rule of thumb. What if a couple has two cars and they drive long distances to work, so transportation costs are higher than a couple with no cars? What if they have kids? They’re not cheap either.

As a financial planner, I can say a common topic of discussion with clients relates to their current house or their next one.

With young couples, they’re often wondering if they can afford their dream home – without breaking the bank. Taking on a bigger house and a bigger mortgage can limit other things which may or may not be important. Retirement savings might need to be scaled back, but what about living for today? Big mortgage payments might make a family think twice about a vacation they might otherwise enjoy (or need).

Not surprisingly, a lot of Baby Boomers are considering a downsize of their home. In some cases, it’s because people have more house than they need once the kids grow up and move out. In others, it’s because they live in an expensive city like Vancouver and a move outside the city can help pad retirement savings.

Either way, young or old, upsize or downsize, housing costs represent a large component of household spending and a large proportion of household net worth. It’s important to evaluate the pros and cons of moving up or cashing out.

One thing I always emphasize is that rules of thumb need to be taken with a grain of salt. They can be quite deceiving and lead people to make imprudent decisions. Just because a bank approves you for a mortgage, it doesn’t mean you’re wise to take it on. And just because CMHC suggests a 30% target for your housing costs as a proportion of your household income, it doesn’t necessarily constitute sound personal financial planning – especially when today’s interest rates and the resulting mortgage payments are artificially low.

AUTUMNAL DUTIES

Clean up your yard this fall with ease
Tips to protect your outdoor space

News Canada

Saturday, September 21, 2013

Homeowners invest hundreds, sometimes thousands of dollars in converting their backyards into an extended outdoor living space.

Yet when the autumn chill blows in, many abandon their man-made oasis only to be faced with an overwhelming cleanup in the spring.

It's easy to make light work out of a fall cleanup with the right tools, say gardening enthusiasts.

The Ryobi ONE+ 18-volt battery system, which features over 50 products such as a cordless hedge trimmer and cordless blower, will save time when pruning and prepping your yard for the winter.

The advanced lithium interchangeable batteries give you superior runtime and rapid recharging, eliminating the frustration of running out of power mid-cleanup.

A leaf blower, for example, is an ideal investment for larger properties and their backpack blower makes light work of a gruelling task.

It can easily clear lawns and flower beds of loose leaves and debris -- letting you simply blow leaves to your property line for municipal pickup.

To protect your outdoor space from harsh, destructive winter elements, take a look at these tips from Ryobi:

• Trim plants and shrubs for optimal spring blooms and to avoid spring "bald spots";

• Remove leaves and dead plant material from annual and perennial garden beds;

• Protect perennials from frost heaving by mulching after the ground freezes;

• Cover shrubs that are sensitive to low winter temperatures with burlap;

• Build a simple (or elaborate) compost bin for fall leaves, add fresh grass clippings and cover until spring;

• Remove dead branches from rose and fruit trees;

• Check eavestroughs, siding, railing and pathways for loose screws, shaky handrails and loose pathways and make repairs to eliminate possible slipping hazards and prolonged property damage.

With the proper tools, lawn care doesn't have to be a nightmare.

Winterizing your outdoor space can save you hundreds of dollars next spring.

By protecting plant beds from disease, outdoor furnishing from rot and such structures as air conditioning units and eavestroughs from flooding or ice damming, you're far less likely to be faced with unsightly spring repairs.

A SELLERS' MARKET

Calgary area housing market has best price growth expectation
7% and higher forecast for year-over-year hike in short-term
By Mario Toneguzzi 
Calgary Herald September 20, 2013

CALGARY — Calgary and area is forecast to lead the country in short-term year-over-year price growth in the housing market, according to a report released Friday by the Conference Board of Canada.

The report said prices in the Calgary region are expected to rise by seven per cent or more.

The board’s report said Calgary is now in a sellers’ market.

The board said the seasonally-adjusted annual rate of sales in Calgary of 33,264 in August was up 6.3 per cent from the previous month and a 26.3 per cent hike from a year ago.

The seasonally-adjusted annual rate of listings at 43,704 was up 2.0 per cent from July and increased by 4.8 per cent from August 2012.

The board said the average price in Calgary of $441,806 in August increased by 0.7 per cent from the previous month and by 8.0 per cent from a year ago.

Scott Bollinger, broker for the ComFree Commonsense Network, said the strong housing market in the city is due to a strong outlook for the economy.

“We’ll outperform most of the country, and that creates significant demand for housing. Interest rates are low, and the Bank of Canada is unlikely to move them till 2015,” he said. “Personal incomes are high and growing. Oil prices are strong and stable. Our growth in the 20-44-year-old demographic is second fastest in the world, behind only India. And our cost of living is lower than Toronto or Vancouver.

“That all adds up to this: More Calgarians can afford to buy a home, and more can afford to move up in the market.”

Bollinger said the strong price growth in the Calgary market is due to confidence — people who are confident about their employment and future wages.

“Confidence in housing is a good investment. Confidence in the city’s economic strengths and the strength of the market, in the face perhaps of news from other cities that a housing bubble is on the horizon. Real estate is local, and Calgarians are smart and savvy enough to realize that,” he said.

“I think we can expect this to continue because of those strong economic fundamentals, and because growth in optimistic buyers is outpacing growth in listings. It’s the old supply-and-demand.”

According to the Calgary Real Estate Board, year-to-date for just the city, there have been 17,933 MLS sales as of Thursday, up 9.33 per cent from the same period a year ago. The average sale price has jumped by 6.93 per cent to $456,779 but new listings are down 0.8 per cent to 25,943.

“The average price in Calgary is forecast to increase almost six per cent this year to $435,000,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., about the census metropolitan area. “Part of the gains in the average price thus far is due to the high number of luxury homes sold this year. There has also been more pressure on prices as active listings have moved lower as well as days-on-market. Price growth is expected to continue into 2014 but at a more modest pace.”

SIMMONS BUILDING IN THE VILLAGE

EV EXPERIENCE CALGARY

21st Century Simmons is the story of how a historic riverfront landmark in the heart of Calgary's East Village is being transformed into a day and night culinary hotspot and gathering place for the neighbourhood and the city. The Simmons will be rejuvenated by East Village Master Developer CMLC and a consortium of Calgary culinary luminaries – Phil Robertson and Sebastian Sztabzyb of Phil & Sebastian Coffee Roasters, Aviv Fried of Sidewalk Citizen Bakery, and Connie DeSousa and John Jackson, founders of Charcut. In this film, they discuss the unique retail experience they're bringing to the Simmons, which is designed to complement larger-format shopping facilities to be developed by RioCan elsewhere in East Village.

Video: 
http://m.youtube.com/watch?v=Sa_W_BoeNLU&feature=youtu.be&desktop_uri=%2Fwatch%3Fv%3DSa_W_BoeNLU%26feature%3Dyoutu.be

Source:
http://www.evexperience.com/21st-century-simmons-story-how-historic-riverfront-landmark-h

A FLOOD OF HOPE

Alberta an economic leader despite devastating floods
Real GDP growth forecast to be best in Canada in 2014
By Mario Toneguzzi

Calgary Herald September 17, 2013

CALGARY — Not even the worst floods in memory will be enough to restrain Alberta’s economy this year, according to the latest RBC Economics Provincial Outlook released Tuesday.

The report said post-flood spending will more than compensate for the drop in economic activity related to the natural disaster as RBC is upwardly revising its provincial real GDP growth rate to 3.2 per cent in 2013, up from the 3.0 per cent previously projected due to the anticipated economic boost from post-flood spending.

It will be the second best growth rate in the country this year behind Newfoundland & Labrador at 6.0 per cent.

And RBC is forecasting Alberta growth of 4.1 per cent in 2014 to lead the nation.

“There is no doubt Alberta’s economy took a hit after the floods, however, the province has shown tremendous resiliency, and we expect the economy to spring forward for the remainder of 2013,” said Craig Wright, senior vice-president and chief economist for RBC. “Post-flood spending will more than make up for the short-lived economic challenges Alberta experienced at the beginning of the summer.”

Ben Brunnen, a Calgary economic consultant, said Alberta is well-poised for growth into 2014.

“Oil and gas revenues are at their highest point since 2008, and industry re-investment is comparable to 2011 when we saw five per cent GDP growth,” he said.

“People have confidence in the Calgary economy. Unemployment is low, the residential real estate market is strong, and we are at the front end of a major commercial construction cycle.”

Adam Legge, president and chief executive of the Calgary Chamber of Commerce, is not as optimistic as the RBC report.

“I think Alberta will do moderate growth next year restrained by lack of market access, continued oil price differentials and a shortage of labour. Flood-related spending does hit GDP but should be viewed as a temporary lift that actually will create reduced GDP impacts in the future.”

RBC said that annual GDP statistics will fully capture the additional spending and work required by the reconstruction, repair and replacement that will take place, but will essentially ignore the destruction of or damage to property.

“Even without this perverse lift that the floods will provide to the provincial economy, Alberta continues to demonstrate substantial and sustained economic momentum,” said Wright.

The report is forecasting 1.8 per cent economic growth for Canada this year followed by 2.8 per cent in 2014.

“In addition to the boost from post-flood spending, we expect Alberta’s economy to benefit from stronger capital investment in oilsands now that earlier ‘bitumen bubble’ concerns have largely receded,” said Wright.

Todd Hirsch, chief economist with ATB Financial, said Alberta’s economy is set to pick up a bit of momentum next year after slowing down slightly in 2013.

“Stronger energy prices than a year ago are largely the reason. However, agriculture has quietly but steadily regained a very strong position in Alberta’s economy,” he said.

“Continued inflow of interprovincial migrants in 2014 should also ensure the housing market remains healthy and balanced.”

Photo By: Marc Shandro