Losing Balance, Regaining Control

Information gathered from a presentation by Todd Hirsch, ATB Financial's Chief Economist - September 9th, 2015

There have been serious imbalances in Alberta's economy over the past five years or so, and Albertans are worried... we have been relying on high oil prices and a stable and expanding energy sector to grow our economy and province. The recent extended period of lower oil prices is certainly a major contributor to the current economic environment we are seeing in Alberta, and across the nation. Make no mistake, low energy prices is a National issue, not just a provincial challenge! Last year at this time the cost of a barrel of oil was around $97, today we are looking at the mid $40's. Aside from the obvious effect that has on exploration and new capital expenditures, it also affects the Federal and Provincial Governments coffers.

To regain an economic balance, four things need to happen...

1) There must be some rebound in the price of oil. Reaching and sustaining around $60 a barrel should stabilize the industry, and contribute to our economic recovery. There is much debate regarding the question of whether or not we are in an economic recession in Alberta. We will not know for sure until April of next year whether or not we did see two consecutive months of economic retraction as that is when those figures are released.

2) There must be a re-balancing of wages. In the past decade the average earnings in Canada increased 29%, for that same period Albertans enjoyed an increase of 48%... here is the real kicker though, the average wage in the oil and gas industry increased 56%!  With many capital projects being put on hold in the energy sector, there should be downward pressure on wages as more contractors compete for less work.

3) We must see strong performances in other sectors of the economy. Agriculture, forestry and tourism should benefit from the lower Canadian dollar and lower gas prices. The US economy is also on an upswing, including new housing development contributing to the demand of products from our forest sector.

4) The value of the Canadian dollar needs to remain where it is. The lower value of the Canadian dollar is giving a bit of a cushion to lower oil prices, contributes to tourism from other countries and adds value to other exports such as forestry products.

The energy sector will need to adjust to these lower oil prices, and diversifying into other resources and alternate energy will be prudent going forward. I am sure we will find that we indeed have been in a recession this year, the question is to the extent of this retraction. Albertans are a resilient bunch and will persevere through this economic crunch. This should be a modest recession and we will most likely see a below average growth rate in the coming year. Generally people will be cautious in their investment and spending habits in the next few months, however, this should be a softer downturn than we saw in 2009-2010.

The new norm will be lower growth rates, right across the world. The rebalancing of income will start in the petroleum sector and move into other sectors of the economy leading to softer commodity prices, including real estate. Price corrections are most likely inevitable, however, should not be severe.

Real Estate Photography

Visual content in an important tool as a medium for customer retention and good real estate sales. It is of prime importance to have high quality photography to stand out from the competition. Great images not only determine the success of property sales, but also the website on which the properties are listed. Online content with compelling imagery quite simply attracts more viewings.

 

 

Homes that show well online with superior photos are also more likely to sell faster than homes with low quality photography and little or unimaginative staging. Quality is not the only factor though, it is also important to offer a variety of interesting and outstanding photos to keep a potential clients interest piqued. Without a doubt, most buyers today will research a property online prior to booking an appointment to view, or stopping by an open house. Keeping a buyer engaged through interesting and a wide variety of great photos is so important in bringing potential buyers to the table.

When buying a home, or any investment real estate property for that matter, a good portion of our decision is influenced by emotional factors such as our first impressions. We often are most likely to buy a property based on the feelings it gives us rather than the actual value it provides. Developing a consistent and obvious style with high-quality photography and staging will engage more buyers and help ensure the success of the seller regardless of their price category.

Essential Moving Tips

Reposted from Luna Grace, follow her here: http://lunagrace8.tumblr.com/

                        

Changing homes is extremely stressful, especially because you have to pack and then carry all your belongings from one place to another… It may not be the best fun you’ve ever had, but at least you can make it memorable! For this to happen, you surely need to take baby steps and have a great attention to details!
So, you need to move and you’re excited, until you realize the huge amount of things you have to pack! But don’t worry, you can hit two birds with just one stone – make it fun and effective too!
Even though planning this action with some months in advance may be time-consuming at a first glance, it will get to be less stressful and simpler if you don’t rush! By following these rules your stress level will decrease drastically! So, just enjoy your move!

Moving tips. Helpful checklist!

Main rule: Don’t take with you the things that you don’t need! Now it is the perfect time for you to have a mass declutter. Take advantage and get rid of the things that you don’t use! They’ll just occupy space in your new home as they did until the present moment, in your old one!
Here are some tips for you:

• Plan-ahead

After a tiring and stressful period, when you have probably sold your old house, now the time for you to move has finally come! Even though the stress is not over yet, don’t let things get too dramatic – there is a way for you to keep everything under control and the safest way is to plan ahead! Get the clear picture of the entire process and decide when and how you should manage this situation! A fact is certain – packing up your entire life and possessions will not be something that you’ll manage to do in one single day, therefore you need to arm yourself with a lot of patience! You’ll certainly need it!
Hint: Don’t panic!

• Stay organized

More than ever now it is the perfect time for you to show your organizational skills! Write down everything that you have to do and where you put every object. The boxes need to be labeled both with their content but as well with colors assigned for each and every room. Manage your inventory very carefully, you’ll thank yourself later on!
The thrills or frustrations of this whole situation may be disturbing to you, but stay focused! This is what you need now! Staying organized will save you time later on!
Hint: Don’t rush, take it all slow or you’ll end up mixing everything up!

• Get the right boxes

Planning in advance requires getting boxes of all sizes and shapes! Keep in mind that lighter objects should always be placed on top! What is more, you should also make sure you won’t leave empty spaces inside the box because objects will slide down and you’ll probably have a huge surprise when you’ll start unpacking!
Hint: Shake your boxes to see if any objects are misplaced and be careful not to make the boxes too heavy to lift either!

• Use colors for labelling

Colors may help you stay organized. Use a different color for every room; markers will be of great help! This way the unpacking process will become much more bearable and simpler too!
Hint: Keep it all visually appealing; you need to remember this entire experience as a step forward for you! Do everything when you are relaxed and fresh!

• Charity?

Maybe the time to do a good deed has come. You’ll probably stumble upon things you have completely forgotten about, so why not donate them all? You clearly don’t need them. Take your move as a fresh start and don’t bring useless things with you. You’ll just end up throwing them instead of reusing them. No junk, please! Take a big breath and see which objects are pointless to you!
Hint: Don’t throw away things you don’t use anymore, donate them! Others may be in great need of those particular items!

• Get rid of the dust

Hygiene is important and taking into account that you have to pack everything up, why not cleaning them first? You won’t want to get dust and dirt into your new home. Take it all step by step and make it all right from the early beginning. Think about it – one way or another at a certain point you’ll have to clean up your things so why not now? Chances are you’ll be too tired later on to clean everything!
Hint: A microfiber cloth is highly recommended!

• Newspapers, anyone?

You’ll need to fill up every box and wrap every object for protection. Therefore, try to purchase in advance enough packing paper!
Hint: When the time for unpacking comes, unpack only by room! Your entire effort to keep it all organized will become useless if you create chaos now!

• Separate the essential things

When you’ll get to your new place, you’ll firstly need certain objects so make sure you have them all together in a box at a close reach! You wouldn’t want to search for scissors or papers and not find any one of them!
What should you consider? For instance, think about – paper towels, phone chargers, trash bags or toilet paper!
Hint: Make a list with other objects and make sure you have them all in one single place!

• Pre-clean the new house

Before getting all your stuff in, try to clean up the house. Once you have the furniture in, it will much more difficult to Q-tip everything! This will save you a lot of trouble!
Hint: Take at least one week to make sure the house is clean and hygienic before bringing in your stuff! You’re looking for a fresh start, aren’t you? Then, make it look fresh!

• Vertically or horizontally?

Depending on the type of objects you are carrying, pay attention to how you place them! For instance, your plates should be placed vertically! Why? There are less chances they’ll break under pressure!
Hint: Take some time and think about every object you intend to transport, thus you’ll figure out the right place and a way to bring it ‘safe and sound’!

• Correspondence

Don’t forget to change your correspondence address with at least two weeks prior to the day you move! This way you’ll be sure no personal papers will get into the hands of the wrong people! Check the utilities you’re responsible for and make sure every important person knows how to reach you!
Hint: Don’t forget to make the switch from time!

• Get help

You are surely not going to be able to do everything all by yourself. Some may call their friends while others may call for professional help. There is always a way for whatever budget you may have, however you may be sure an expert will always be of much more help for you!
Hint: If you choose to do it all by yourself, you’ll need to have nerves of steel and a lot of patience. This entire experience is extremely stressful!

• Sort, sort, sort

In order to stay organized you surely need first of all to sort all your stuff! You clearly don’t need chaos now because the stakes are high and there are a lot of things going on. Try to be in control of everything and at all times, this way you’ll have a peaceful and exciting move!
Hint: The more time you dedicate to organizing your things, the easier it will be when you unpack!

• Separate valuables

From another point of view specialists utterly suggest you need to separate your valuables in order not to regret it later on. Among all the things you have to carry, there is enough space for mistakes to happen, this is why it is better to take precautionary measures!
 Hint: Try to stay organized and set your priorities. Your valuables and important papers should always be with you!
Knowing what things need to be done and most importantly when, will save you from a lot of painful headaches! Remember: you shouldn’t let everything on the last day! You’ll panic and you’ll not be able to face up the stress!
When the details of such an important event tend to overwhelm you, take a break! You need to relax and think clearly – a bit of organization will only help you in moments like this one!
All in all, moving may become a really great experience if you know how to handle things! Don’t hurry, this is clearly not the time for this! Take it all step by step and just enjoy!

Where is the Calgary Market going in 2012?

The good news is we are off to a good start this year!

It does look like we are in for an interesting year in Calgary this coming year. In the first quarter of 2012 we are seeing decent sales, and our inventory is growing slowly. We do need to keep an eye on the inventory levels as we may very well see a dramatic increase in the next few weeks. Last year many homes that were listed did not sell - many of those listings have been terminated or have expired. As a matter of fact, in analyzing communities across the city I have seen that rate as high as 50% - that means HALF of the homes that were listed last year DID NOT SELL! I suspect a good portion of those expired listings will be coming back on the market for the spring rush. I would also suggest that many of these Sellers are going to be more aggressive in their pricing, how they approach marketing their homes and how they deal with offers. This could set the pace for values right across the board.

There is also a huge inventory of properties that has been on the market for many months and many listings have been on for YEARS! I found one listing recently in Mount Pleasant that has been on for 1,170 consecutive days! How long can a Seller hold onto a property without sustaining considerable losses, both financially and otherwise? One of the best examples of this is a beautiful property out in Bearspaw that was purchased back in 2007 for $6.35 million, a real gem! Two and a half years later it came back on the market, listed for $5.35 million. It has been on the market ever since (849 days) and the listing price has been in steady decline. You can pick up this home today for $3.85 million!

Have prices dropped 40% since our peak in 2007? Absolutely not, this is an extreme case of a declining value and there are a select few buyers with a budget over $2 million... however, this is a reality jolt, and a true fact. It does go to show that we do need to be very cognizant of the current market... and where it is headed!

I would be cautious of how sustainable this new activity these first few weeks into 2012 is on a long term basis. In Calgary and the surrounding area we should be selling around 2,000 properties per month, a little higher late spring, and a bit less in the cold months. We have been below this plateau since August of last year. Perhaps that pent up demand will carry us through a couple of months in the spring, again we need to be very aware of why we see the higher sales, and how long we can sustain those numbers. The next three months will be paramount in seeing any kind of gain in values in the area. Typically we look at the official opening of the Stampede as the "hump" in the market… school is out, the summer is officially here and many Calgarians head to cottage country and to summer vacations.

Having said that, I would suggest that if you are considering selling this year, there is a narrow window of opportunity in the next couple of months to ride the wave of the buyers who have been sitting on the fence for the past six months or so. Once that pool of buyers dries up, we will probably see much of what we experienced through the past year, a lethargic pace at best.

If you are not considering selling your house in the next year or so, I would suggest we will do well in the next three to five years. Once things start to work themselves out with the global economy... our superior economic and political position and the location of Calgary will certainly make itself more and more apparent, and we should see a steady pace of future growth.

If you are considering buying in this market I would suggest this may very well be the best time in many years for a purchase. With interest rates at historical lows - and the opportunity to lock into these rates for long-term periods - there may not be a better time to move into a new home. The inventory of available homes typically is at its maximum in the next two or three months giving you LOTS of choice. That in combination with the softening attitudes of sellers in general will lead to a competitive and healthy marketplace.

I would be happy to discuss your posibilities with you, and to put together a strategy with you to help you achieve your goals. Please do visit my web pages to find out more about the market, and what we can do for you.

http://www.thenashgroup.ca/home.asp

Canada's Housing Bubble - An Accident Waiting to Happen

The Canadian Centre for Policy Alternatives (CCPA) has just released its study "Canada's Housing Bubble: An Accident Waiting to Happen". This paper is certainly worth the read as it runs over a variety of potential scenarios we may be facing in the next few weeks, months and years.

My critisism of this study is the fact that the author is "predicting" one of these scenarios to happen in future. The over inflated prices HAVE happened in Calgary peaking in mid-2007. The question is - are we in the midst of one of these "bubbles" or about to enter one? Without a doubt, I believe we have been in this "correcting" mode for over three years. As that is the case, the next series of questions to address would pertain to understanding where we are within this price correction. Are we in the beginning, the middle or the end?

The Canadian housing market has shown remarkable resilience through the worldwide economic downturn and the recession of 2008, quickly regaining ground over the past year creating possible price bubbles in several Canadian hot zones, including Calgary. The study points out that the recent U.S. housing crash provides a stark example of what can go horribly wrong when housing prices are outside their historical norms. Although the Canadian and American banking and mortgage situations are very different, it is important to note what happened, and how it happened south of our border, "a similar crisis could potentially occur."

Canada is experiencing, for the first time in the last 30 years, a synchronized housing bubble across its six largest residential real estate markets. The paper puts together a variety of price adjustment scenarios wondering the odds of the bubble bursting, flaming out fast or slow, versus a slow price moderation - or market correction. Regardless of the road we take, this study certainly leads to the conclusion that we WILL see adjustments, whether fast or moderate changes.

Whether the crash is orderly, protracted, or sudden, seniors and new home buyers will certainly feel the effect of the changes the most. Those who purchased homes through high-ratio mortgages while prices were at their highest will find that they owe more on their homes than the value the market permits. Seniors who will be counting on selling their homes to make their retirement plans viable and can't wait a decade or so for prices to recover will be the most effected.

While the outlook seems dim, it is pointed out that those who hold real estate through the entire boom and bust would still see their property appreciate significantly despite the declines in the final years of these various scenarios. Often the process is quite lengthy, requiring a decade or more from beginning to end. In all of the bubbles examined in the paper, the new average price after the bubble burst is always higher than the initial starting point.