Alberta Real-estate coming back with a BOOM

Alberta real-estate

Alberta Real-estate coming back with a BOOM!

 

Is Alberta, or maybe even Canada, in for another Real-estate Boom?  With less and less on the market many Albertans are turning towards new builds.  Some reports are stating developers scramble to respond to a supply shortage that has prices steadily increasing for existing homes.

 

But any increase in construction of new homes will likely not surface fast enough to feed the demand for housing still pumped up by record low interest rates.  By the time these new homes are built I doubt it if the current interest rates will still be so low. 

 

Canada Mortgage and Housing Corp. said yesterday 157,300 units were built last month on a seasonally adjusted annualized basis, a 5.4% increase from a month earlier. Annualized starts dropped as low as 118,500 in April.

 

“There is not a lot of inventory around,” said Gary Friend, president of the Canadian Home Builders’ Association, adding his industry has been careful not to speculate. “We have to watch our Ps and Qs, as we try to meet this demand.”

 

Any increase in supply would be welcomed as a shortage of new listings has caused a spike in prices. The Canadian Real Estate Association said last month existing home prices across the country were up 13.6% in September from a year ago as supply was short in almost every city.

 

“The existing-homes market is in short supply so we’ve gone from a buyers’ market to sellers’ market,” said Bob Dugan, CMHC’s chief economist. “The way it gets linked is you get some spillover into the new-homes market and that’s starting to happen.”  Where early this year you were hard pressed to get an offer on a house selling.  Talking with Realtors in many cities around Alberta many are finding that a well priced homes is now coming in contact with multiple offers!  Some even selling for over list prices.  

 

Here is a warning about financing.  Pre-approvals mean nothing.  Just because you are pre-approved don’t think you can go in with no financing conditions no matter what anyone tells you.  You have to make sure that whoever you are dealing with has all your documentation and it has been reviewed.  Remember that everything might be great with you but the mortgage will be secured against the property, so the property has to be approved.  Approving the property may not just be the value, it could be square footage, location, age restrictions, foundation, and hundreds of other things.  We saw a lot of this happening in 2005 and 2006 but very careful and consult with your mortgage broker before just signing on the dotted line.