Record home sales are putting a strain on the systems and people processing the transactions.
Bryan Lynn, president of the Red Deer and District Real Estate Board Co-op, said Thursday the volume of real estate deals closing in Red Deer and elsewhere in the province is overwhelming staff at the land titles office, as well as people like appraisers, lawyers and bankers.
"Land titles are running about nine days right now," said Lynn, who operates Royal LePage Central in Stettler. "In a quiet time we get three-day turn-around."
The Real Estate Board recorded 1,540 residential sales through the multiple listing service in Red Deer and the surrounding area between January and April.
During the same four-month period last year, the tally was 1,084.
"The more properties we sell, the busier the banks are, the busier the lawyers are, the busier land titles are and home inspectors and everything else," said Lynn. "We're just all short of personnel to do it any faster."
An apparent solution might be the hiring of more people. But in labour-challenged Alberta, this isn't necessarily an option.
"If we could send our land titles transactions to Saskatchewan it might speed things up, but in Alberta we're just short of people," said Lynn.
It's realtors' responsibility to ensure buyers and sellers are aware of the extended timelines needed to close home sales, he said. That means at least three weeks to a month between the time conditions are removed and the closing date.
Clients who insist on a quicker turnaround should be prepared to accept the consequences - such as hefty interest charges in the case of buyers and interim financing for vendors relying on the sale proceeds to buy another house.
Lynn said Alberta is probably alone when it comes to the land transfer crunch, although British Columbia and Ontario might be experiencing similar problems. He chalks it up to the prosperity this province is currently enjoying.
"With all the good stuff that's happening, we also have some bad stuff.
"We're all adjusting."

Calgary Herald

Published: Thursday, May 04, 2006

CALGARY -- Alberta is the best place in the country to buy residential real estate for long-term investment, according to the Real Estate Investment Network.

In a list of top places in Canada to invest, Edmonton, Grande Prairie, Alta., and Calgary are noted as the hot spots in the country for buyers to make money in residential real estate.

"This is for long-term fundamentals. Long-term hold," said Don Campbell, a real estate consultant, author and president of the Real Estate Investment Network.

"The next three years all kinds of regions across the country are going to look spectacular. But these ones will outperform over the long period of time."

The rest of the top places for residential real estate investment include Kitchener-Waterloo in Ontario, Fort St. John, B.C., Barrie, Ont., Halifax and Hamilton.

Richard Corriveau, regional economist for the Canada Mortgage and Housing Corp. for the Prairies and Territories, said the "one thing you can bank on is future appreciation."

"The difficulty for investors will be how do you cash flow a property. You purchase a new condominium, a new single-family home (they) might be very difficult to cash flow a property. A renter might not pay your carrying costs but you'll get the return at the back end of the sale once your home appreciates," Corriveau said.

He said it is difficult to determine how many people are buying residential real estate for purely investment purposes as opposed to living in the properties.

"Anecdotally we hear upwards of a quarter of all new condominiums," Corriveau added.

"The question remains whether they are speculative investors and they intend to flip the property prior to the structure even being completed or whether they intend to rent it to people.

Campbell said that in British Columbia there's no question the Fort St. John region (and Dawson Creek) is "the No. 1 place to buy for investors."

In Ontario, it's the Kitchener-Waterloo and Cambridge triangle.

"We're actually calling that the economic Alberta of Ontario. It's got strong, strong growth and lots of in-migration and average income is increasing quickly. If I was to invest anywhere outside of Alberta, that would be my second choice. Absolutely," Campbell said.

Area home prices soar

Red Deer Express

04/12/06

For the third consecutive month, real estate sales have shot up in Central Alberta.

Numbers released this week by the Red Deer & District Real Estate Board Co-op Ltd. reflect a hot market with no signs of slowing down.

March saw 518 properties sold compared to 386 during the same month last year.

That’s a 34% increase in sales during a drop in both the number of listings received last month and in the overall number of active listings.

Active listings closed at 1,169 which is down 27.8% from one year ago.

New listings received this March were 552, a decline of 16% compared to last year’s 642 listings.

Prices are also reflecting demand with the average price of a single family detached home in Red Deer jumping 35% in one year to $268,522 last month.

That’s compared to $199,512 in March of 2005 and it also represents a hike of 3.5% from February of this year.

Townhouses in Red Deer sold for an average of $162,819 last month – an increase of 32% from 2005 when the average was $123,231.

The average sale price for an acreage with a home was $290,258 – an increase of 32% from 2005 when the average price was $219,823.

The average price of a single family detached home in rural communities surrounding the city increased by 22.6% in one year to $190,979 in March compared to $155,779 in March of last year.

Emphasizing just how much sales have escalated in a short time, the average price for a single family detached house jumped 10.5% compared to this past February.

Analysts say in such a rapidly growing market, expert advice is a must.

“In this type of market, with quick turnover of properties, it is more important than ever that buyers and sellers use the services of a realtor to get the best price and value for their properties,” said Brian Lynn, president of the Red Deer & District Real Estate Board Co-op.

“A realtor will keep them informed, prepare and guide them through what could be a time-sensitive decision.”

Housing market remains red-hot

OTTAWA (CP) - Canada's red-hot housing market showed little sign of cooling off in March, instead setting a pace not seen in 18 years but also raising the likelihood of higher interest rates.
Housing starts rose to 252,300 units in March, up from 242,500 in February, Canada Mortgage and Housing Corp. reported Monday.
That marks the strongest March on record since 1987 and was much more robust than analysts expected.
But while some experts continued to warn the pace can't continue, others said there's no need to worry just yet.
"With today's data, it goes without saying that there is still not a shred of evidence that Canada's housing market is tapering off," said Marc Levesque, chief fixed-income strategist at TD Securities.
"Construction activity is proceeding at a red-hot clip, resale activity remains solid, and building permits are not even hinting at a slowdown," he said.
And that could increase pressure on the Bank of Canada to continue to nudge up its trend-setting short-term interest rate. The central bank has already boosted rates five times since last fall as a pre-emptive strike against inflation.
At the time of its last increase in early March, when central bankers raised their overnight rate to 3.75 per cent, they indicated they were almost finished tightening.
However, strong economic data - including a record low jobless rate of 6.3 per cent in March, the lowest in 32 years - is raising speculation that the Bank of Canada may have to raise rates a few more times to keep the economy from overheating.
Its next scheduled chance to change interest rates comes on April 25.
Prospects for higher interest rates initially gave the loonie a boost on Monday morning but it didn't hold and the dollar ended the day 0.03 of a cent lower at 87.03 US.
The housing report wasn't completely good news, carrying the seeds of a possible slowdown in the months ahead.
Construction of apartments and condos outpaced single-family homes in March, hinting at some weakening to come, warned CMHC chief economist Bob Dugan.
Toronto and Montreal in particular saw apartment starts surge last month, he said.
At the same time, "single starts decreased for a second consecutive month, suggesting that the pace of new-home starts will begin to pull back."
On a seasonally adjusted basis, urban starts rose 4.7 per cent to 219,700 units in March.
Multiple starts, or new construction of apartment and condominium buildings, rose 18.6 per cent to 123,000 units between February and March, while construction of stand-alone houses fell 8.9 per cent to 96,700 units.
Residential construction got a lift in the first quarter from unusually warm weather, adding fuel to the Canadian economy, said Scotia Economics analysts Sarah Hughes.
That could "diminish somewhat in the second quarter as declining affordability, rising construction costs and a cooling resale market tempers housing demand," she wrote in a note to investors Monday.
But other factors will continue to prop up the market, Hughes added.
"While starts are expected to trend downward in 2006, Canada's generational-low unemployment rate and respectable wage gains should continue to support a historically high level of residential construction."
For the first three months of the year, actual urban starts were up 19.1 per cent from the first quarter of 2005, with all regions of the country gaining on last year.
Single-home starts were up 16.7 per cent, while multiples were up 21.1 per cent.
In March, a jump in apartment construction in Montreal meant the Quebec region led Canada with a 21.2 per cent increase in urban housing starts, to 48,100 units.
Urban starts declined in the Atlantic region and Ontario, and were virtually unchanged in British Columbia.

HOUSING STARTS ON RECORD PACE

Red Deer's housing market continues to flourish with another record in the books for the first quarter of the year.
Bryan Yu, market analyst with the Canadian Mortgage and Housing Corp. in Calgary, said on Monday that Red Deer chalked up its highest year-to-date performance on record.
Yu said in the first three months of the year, 246 single-detached homes were started in the city.
That represents a 71 per cent increase over a similar period in 2005 when 144 single detached homes were started.
Red Deer's pace among Alberta centres ranked only behind Grande Prairie, which recorded a 83 per cent rise in single-detached homes with 227 starts in the first quarter.
Some 102 units were launched in March in Red Deer while 85 were started in February and 59 in January.
"Solid employment growth, a tight resale market and low vacancy rates have ensured strength in the new home market," Yu said.
Scott Boyd, executive officer with the Central Alberta Homebuilders' Association, could only chuckle and say "wow," when asked about the building pace.
Boyd said a shortage of workers of all kinds from skilled trades to labourers is still a major concern for builders in the 150-member association.
"That's definitely on top of the minds of our members," Boyd said.
The shortage may ease temporarily with the arrival of oilpatch workers who are experiencing spring breakup.
Boyd said the building forecast is for continued steady demand.
"All our forecasts are saying that it will continue until 2009. But can the people continue?" he wondered.
Boyd said cement shortages are a worry but supplies of wood products are still good.
The average cost to build a home now is about $150 per square foot in Red Deer.
Yu said total starts still lagged behind the record pace of 2002.
Multi-family starts fell by 10 per cent in the first quarter to 58 units compared with 65 in the first quarter of 2005.
Yu said the availability of serviced land continues to limit multi-family activity.
The total residential building figure is 46 per cent ahead of last year's first quarter with a total of 304 units compared with 209 in 2005.
The torrid pace of construction across Alberta is evident through an examination of the province's major urban centres.
A total of 8,888 housing starts were recorded in the first quarter, representing an increase of 36 per cent from 2005 statistics.
Calgary building jumped 40 per cent while Edmonton had a 42 per cent increase. Lethbridge grew 36 per cent while Medicine Hat jumped 62 per cent.