Should we buy or sell first?

This is a common question that people have when they have a home to sell. Should we find a home first, or sell ours first? I understand the worry that you won't find the right home, but in reality that is very rare. Especially today with our current listing inventory in Edmonton we always find a good home if we give ourselves enough time (60-90 day possession on your existing home). I always recommend to sell first. There are quite a few reasons but the biggest is money. Financially you can lose money by buying first. To explain this, when you are buying you are emotionally involved. When you are selling it is much more of a logical (have to do) process. I've seen many people buy first and overpay for their new home (emotional) then they "dump" their home and sell at a low price in order to get into the next home. Not to mention, it almost always puts you in a bad financial spot when you are covering two mortgages for any period of time. I've seen some people in this market that have bought first and have lost 10's of thousands of dollars (eesh!).
Some people try to buy subject to their home selling and this may not put you in a bad position immediately (not having to cover two mortgages), but your negotiating power is lessened when you have this condition on your offer. So, you still end up overpaying for the new home. This is also a real roller coaster emotionally. If you can't buy the new home outright and have to put a subject to sale condition in your offer, the seller of the new home will always put a time clause on the condition. What that means, is that if another offer comes in on the new home, the seller has the right to serve you with 24, 48 or 72 hours notice to either remove all your conditions (ie own both homes) or withdraw your offer. So, you end up back in the bad financial position by removing conditions, or you back away from the offer and lose your dream home. Not fun.
The last remaining problem is that pricing your existing home is not an exact science. Nobody, including appraisers, can tell you exactly what your home will sell for. We as professional Realtors can educate you on what your home should sell for, but until we actually have a buyer offer on your home, we are only working with hypothetical numbers. Not to mention the market can change while you are trying to sell. For example, 5 of your neighbours can put their homes up for sale, a local company can lay off 1000 workers, interest rates can go up etc. You get my point. You are in a much better position when you know exactly what you are netting out of your existing home.
That is why I always recommend you sell first.

July 2008 Edmonton Real Estate Update

Well this month we can definitely see a trend. We are starting to see our listing inventory finally coming down. This follows closely with previous years where we peak out in May with the number of homes on the market. There is then a gradual decline to a low of inventory at the end of December. January sees inventory building up until May and then the number of homes for sale starts to fall again.

On the demand side, the sales have been quite strong. We are just off April, May and June numbers of 1820-1850 sales, we sold 1752 homes. That is particularly good for July as this month is normally the lowest next to December for sales volume. This amount of sales is also much stronger than last July (2007) where we had only 1565 homes sold.

Outdoor Entertaining Ideas

As the weather gets warmer, there's nothing more fun than taking the party outdoors. Whether you're having a backyard bash or an intimate gathering on your condo balcony or rooftop, here are some tips for a simple, sophisticated summer 'do.
Be deliciously different.Think outside the burger, and try something like marinated vegetable skewers or grilled pizza. If you plan to barbecue something that falls apart easily, like fish or veggies, use a grill rack. Put a sprig or two of fresh rosemary on the coals while you're grilling. Not only will the food taste great, but your party will smell wonderful.
Serve a signature cocktail.Set up a margarita or mojito station. Set out rimmed glasses, slice some limes, then serve the drink in pitchers with lots of ice and let guests help themselves. Be sure to offer lots of non-alcoholic options, too.
Let your guests help themselves.Spend time enjoying your guests instead of serving them. Set up an elegant outdoor buffet by covering a side table with a crisp white tablecloth. Create "bouquets" of cutlery in vases, or make a neat pile of restaurant-style "roll-ups" with paper napkins. Decorate with candles, flowers and fresh herbs.
Have an upscale picnic. For the ultimate casual get-together, plan a backyard picnic (or a picnic in the park) on a big blanket. Bring some cushions to keep everyone comfortable, and use serving trays as level surfaces for drinks, snacks and other wobbly items like vases of flowers and pillar candles.
Light up the night.String holiday lights along railings and in trees. Go with white for an elegant look, or coloured lights for a more whimsical mood.
Inexpensive citronella torches add a great ambiance and get rid of bugs.
Set out lots of candles in open mason jars or glass hurricane covers. Group them in big multi-level bunches for an intimate feel, or space them in equal increments along a fence or railing for a modern touch.
Break out the marshmallows.Pick up a portable patio campfire for unbeatable ambiance at your evening soiree. The campfire (available at some home improvement stores) looks like a stone-ringed pit, but is gas-fueled and easy to move around. Be sure to check fire codes in your area, and if you're entertaining on a balcony or a rooftop, check with your building to see what the rules are.
Be on bug patrol.Use citronella lamps and candles to keep mosquitoes away, and put a bottle of insect repellent in plain sight so your guests don't have to ask.
Always remember the first rule of summer entertaining: keep it simple and enjoy yourself. Plan ahead, get everything ready well ahead of time, then sit down and enjoy the sunshine or starlight - and the warm company of friends and family.
Balsamic grilled asparagusA delicious take on a warm-weather favourite
Snap tough ends off 1 pound of asparagus. Combine 3 tbsp balsamic vinegar, 1 tbsp olive oil, 2 tbsp chopped shallots, and a dash of salt and pepper. Drizzle over asparagus and let stand 30 minutes. Brush grill rack with oil, and grill 5 minutes on each side or until done.

Summer Doldrums

Well July is here and that normally means a slowdown in activity in our market. Most people are surprised to hear that December and July are the two slowest months for number of units sold in the real estate market. That being said there are still homes selling, people just tend to have their minds on summer holidays and enjoying the short Edmonton summer. I've put together another graph showing our inventory versus sales.
The sales data has been quite strong, we are pushing 2000 home sales each month for the last 3 months. Actually they have been extremely consistent, 1823 in April, 1821 in May and 1852 in June.
Our inventory has finally started to crest, we actually dropped a little with the number of homes for sale on the market. At the end of May we were sitting at 11,006 homes for sale and now we are down to 10,817. This falls into normal inventory patterns of markets prior to 2006. We normally peak out in May and the inventory gradually falls to a low a the end of December.

Migration and Erratic Home inventory in Edmonton

There is an interesting graph that has come out from our Real Estate Board. It shows the relationship over the past 2 years between migration into the province and our listing inventory. We have went from extreme lows under 2000 homes for sale in a month to approaching 10,000. This graph clearly shows how the increased migration knocks the inventory down and vice versa when migration slows.
Most builders in the past two years were taking over 12 months to build a home. The increased migration was causing quite a building boom in the last two years. The only catch, was the time it took to build. If a home is not ready until 12 months or more and then the migration slows, the overhang of listing inventory starts to develop.
I think our situation is quite different then the inventory buildup and price declines in the U.S. markets. Many of those markets were "false booms". Speculators buying to flip, and builders overbuilding without the strong economic dynamics that there are in Edmonton. Did we see speculators in this market? Sure, but the difference is we have the employment and migration figures to justify the extra building.

Selling your Home in Edmonton

I often hear the question, "How is the real estate market?" There are many buyers out there, and there are many sellers too. The reason there is a high supply of homes for sale is one word, price. If you as a seller are pricing your home based on the 2006 or early 2007 home pricing strategy, you are going to be sitting on the market for quite some time. What I mean by that is this, the previous 2 years saw unbelievable price increases. If your neighbour sold for $400,000 you could tack on another $10,000 or $20,000 and list for $410,000+. You would probably even sell for more than your list say $425,000.
We are in a different market now. Much more of a balanced market. Buyers are aware that there is a good source of inventory and they are not going to pay you a premium for your home. If the neighbour's home sold for $400,000 last month, it doesn't mean your home will sell for $410,000 or more. Shrewd buyers will pay you market value, not premium value. I have been involved in two multiple offers on my listed homes in the past week. Multiple offers happen in a strong market where there are numerous buyers. So, when people ask me "how is the market?" my answer is that there is a strong demand for quality reasonably priced homes. The most important part of that sentence is reasonably priced.

Edmonton March Update

The stats are out and the sales finished strong again in February. 1287 properties sold (1227 sold in Jan 08). Historical figures for February are:
2007 1886 sales
2006 1605 sales
2005 1257 sales
2004 1195 sales
So, February sales were back on track with 2005/2004 numbers. We aren't seeing the "manic" buying of the previous two years. January and February are back to "normal " levels for properties sold.
Inventory is still climbing. We are now sitting at 8284 sfd and condos for sale (7352 at end of Jan 2008). Buyers have good selection without the pressure of multiple offers bidding up the price overlist.

Prices are moving up:
Average price increase for SFD (from $379,567 to $381,965)
Average price increased for condos (from $257,956 to $264,204)
Rowhouse/duplex price went down (from $301756 to $294,780) historically this category is always more volatile because of the small segment of the market this category consists of.
Overall average price (duplex/sfd/condos) increased from $332,051 to $338,347 from Jan 2008. Prices actually increased close to 2% for all categories average.

Overall the market is still high with inventory, but I've seen three multiple offers on new listings of SFDs in the last 2 weeks in the lower price ranges (under $450,000 in the better neighbourhoods and under $350,000 in the average areas). Both homes selling for under list price and with conditions, which is of course different from the previous 2 years where we saw unconditional overlist offers.
For buyers this market has been the best of both worlds. Prices have stabilized and have started to increase over the last 3 consecutive months, and there is a good selection of homes for sale. I'm not predicting a large increase in prices as of yet. The prices should be strong though, the inflow of buyers this spring will continue to work on the supply of homes for sale.

For sellers, pricing is very important. Tacking on $10,000 or $20,000 to a realistic sales price just doesn't work in this market. The realistic sellers are selling quicker than the 60 day on market average. Those testing the market, are either not selling or having to reduce their price below market value in order to generate offers.