When we talk about the greatness of Tom Brady, we don’t only mention the 6 Superbowl championship, the nine championship appearances or the record number of Superbowl MVPs he has been accredited in his career. 


What do we talk about when he is in the conversation now?


The cliff. 


He is a 43-year-old quarterback in a league where the average age in his position has been declining each year. Heck, he just played the Chargers, who’s quarterback is 22 years old. 


But he still scored 5 touchdowns that game.


So what does that have to do with real estate and our current market? 


The real estate industry has been around since the 1800s, so no spring chicken. From that time, it has seen some of the worst economic disasters that have tested the industry. This is much like the 2 Superbowl championships Brady lost to the Giants (full disclosure, I’m a Giants fan). But even after those losses, he still was a perennial visitor to the Superbowl after. 


Over the years we have seen significant instances where we have seen crashes in our real estate markets. Two that come to mind right away are the mortgage crash of 2008 and the crash of the O&G sector in 2015. 


During both of these times, we have seen a recovery. We have seen growth. And not only the Canadian real estate market but in the Alberta market as well. From 2008 to 2014 we saw steady inclines in the market and this year as well from the crash of 2015 we have seen some ever so modest growth in pricing and declines in inventory.  


It’s funny I could only think of two right now, still thinking of those two Giants wins. :P 


The point is, if there is resilience, there will be prosperity. 


Alberta is the youngest population in the country. That doesn’t happen by accident. We are a province filled with untapped potential and I do believe we will see growth in not only our real estate market but the development of new industries. 


Our pricing in Calgary has increased, mostly due to the interest rate declining and the pandemic affecting sellers’ willingness to sell their properties. On one hand, we have buyers seeing these low rates and wanting to take advantage, but on the other hand sellers reluctant to sell due to fears of COVID spread. This is actually helping our market. 


Let me give an example before I get tons of people quoting to me the most recent CBC article. 


Real Estate is simple supply and demand. Where is the supply coming from? Resale sellers, builders, courts, etc. If the pandemic has taught us one thing, it spreads through interactions (PSA – wear your mask and please physically distant). As a seller, I may have had my home for sale pre-pandemic, or at least planned to sell in 2020 but have since changed my mind. 


What does that do to supply?


Drops that one home off the market. That has been what has been causing the declines in inventory in the single-family market. Our saturated pool of inventory pre-pandemic has diluted and will continue to do so into the winter with our seasonality changes. 


This will increase the price. 


But what about demand. Believe me or not we have, on average each month (even the winter and cold months in 2019) an average of 1,388* buyers per month. In 2020, we are averaging up to the end of September 1,334* buyers each month. 


The demand remains the same. 


So when supply goes down, demand remains constant, we have….? (break out the UofC Economics 201 class notes) 


We have a price increase, which is consistent with what we have been seeing this year. Again ever so slightly.


But Aly, you aren’t seeing what happens when things go sideways after the subsidies and deferrals are done! 


On the contrary, let’s look at how things may play out.


This year, in Alberta so far, we have had only 0.52% of mortgages defaults**. In any crisis we have had in the past, including the two I mentioned above, we have never gone over 1%. 


Alberta also has an unemployment rate as of August 2020 of 11.8% compared to 7.2% last year***. Which have started to see declines since the pandemic had started (highest of 15.5% in May 2020).  


We are also the 2nd highest province for population growth behind British Columbia as of Q3 2020. 


We have fewer businesses declaring bankruptcy as well this quarter.


It is with all this information that we need to look at how things will progress into the next year. 


So we have the second-highest flow of population into our province, the youngest population in the country and an unemployment rate on the decline. 

The response to the pandemic has been considerably better in Alberta than the biggest provinces and our population is filled with such a wonderful culture of caring and compassion for our fellow person. 


If we continue our pandemic guidelines, we are able to remain open and not have to consider downgrading the reopening, like what Ontario and Quebec are having to consider.


We just need to focus on supporting our local small business, allowing us to grow and help more in the recovery of our great province. 


As interest rates remain low, pricing is still very competitive to other big markets in Canada, our young population can achieve homeownership as their goal and not have to mortgage their future to do so. 


I believe we do have a bright path in the future and hopefully, the messages of optimism will resonate rather than doom and gloom of all kinds of industries crashing. 


Oh, and by the way, Tom Brady is still playing well, albeit he's one step closer to retirement by moving to Florida :P


Thank you for your time with this blog. I know they have been coming out a bit less since the pandemic hit. I was busy attempting to teach grade 1 (nothing can replace a teacher and that is where we need to see the most growth btw). But hopefully, I can get these going again and help to educate and inform. I hope you found some value here and if there is anything I can do to assist you with your real estate goals, please feel free to email me at ajanmohamed@cirrealty.ca It would be my pleasure to help where I can. 


Remember, it’s not just a house, it’s home. Let’s chat on how I can help you achieve your goals. 


-Aly



*Based on data pulled from the MLS.

**Based on the data pulled from the Canadian Bankers Association up to April 30, 2020

***From the Alberta Economic Dashboard

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Year over Year at this time we have seen the benchmark price drop 1.6%. We use the benchmark pricing to gauge price changes for the purpose of getting a true change of price based on similar benchmark homes. This removes any influences of more sales in one or the other market on price to provide the true value. For example, if we have more sales in the luxury marekt, this would drive the average price up but would not change the benchmark price.
 
With respect to inventory, we are consistent to where we were last month. This means that we are seeing the same numbers for absorption as last week and will continue to see as we continue to isolate and respect social distancing guidelines. 
 
Sales are down 65% on our 30 days running total year over year at this time. This is continuing the same story of the impact of the pandemic on our market. 
 
But how are we doing moving forward? 
 
The last slide above shows that in the home price ranges that are less than $600,000 have seen a weekly increase in showings. As a market, we are seeing more activity and that sales are starting to crawl back up. 
 
As the we continue to have different industries and markets open up in our province we will continue to see viewings rise and recover to some degree. 
 
if you'd like to learn more about your community or your home's value, I'm more than happy to chat and breakdown your home and what is currently worth in today's market. Feel free to send me an email at ajanmohamed@cirrealty.ca and lets chat about how I can help. 
 
Thank you, be safe. 
Aly
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This breakdown is based on interm numbers before the end of the month. 
 
For this week, we have seen benchmark pricing reduce 0.8% from the same time last year. This is understandable considering all that is going on with the pandemic. Home sales don't act like stocks and bonds and react much much slower to changes like the one we are living through. Home owners that were planning to sell may not sell now. Buyers (which are fewer now with the pandemic) have more leverage are limited by their selection and the inventory access they have. 
 
With that said, the amount of inventory has increased significantly. Those buyers I mentioned above have also shrunk and most have elected to stay home and not continue their search. In Calgary, we have an average of 9.3 months of supply, which grew in all segments. This is due to the virus impacts on our industry and as restrictions become less and less going into the summer months, this inventory level will level. 
 
The number of listings is up week over week, the number of sales are down from the end of March by 60%. We are now seeing more and more buyers interested to get into the market and the number of showings has increased week over week for the last two weeks. 
 
If you are a buyer wanting to leverage the current situation, you will want to act before the market becomes saturated with like minded buyers. For sellers, hang in there, prices haven't declined significantly and you can still get fair value for your home. 
 
Send me an email at ajanmohamed@cirrealty.ca or call/text me at (587) 328-1533 to get in touch and chat about your options. Take care and be safe. 
 
- Aly
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Real Estate is ever changing, ever evolving, and it seems is changing to a point where the Internet and information overload online is our new future.


But then the middle of March happened. The entire city, province and country had gone into lockdown to #plankthecurve. Our health care professionals, frontline workers and all the services to keep us well became our lifeline. In the midst of this all, real estate became an essential service.


So with real estate being essential, we have been forced to move to the online world of ZOOM meetings and Facebook Live open houses. We now offer 3D imaging of homes to our customers and are mandated to provide extra disclosures when representing sellers and buyers to protect us all from the spread of COVID.


If this is the new normal for the sale of real estate, have we as a society achieved what we wanted to from the industry? Albeit catapulted to this new way of life through a pandemic. But were we not moving to this direction?


Instead of calls, we text and direct message. Instead of face to face meetings, we use email to convey our intentions to buy or sell.


Now of course, these aren’t normal circumstance that we are living in. But I’m asking, is this the way today’s consumer appreciates working with the real estate industry?


Possibly…


In the just over the five years I’ve been in the real estate business, we have seen the introduction of online sold information available to the public, the introduction of new real estate models and discount brokerages here in Calgary and the province, the growing of the iBuyer model (investment partnerships and funds purchasing property from home owners for the intention of flip or long term growth) and a growing push on real estate professionals to convey to the consumer where we can add value.


None of these developments have come out of thin air. These are all pushes from consumers like you to have more transparency and options to enter into the real estate industry. We know this because none of the above programs would exist if there wasn’t an audience behind them.


But where are we now?


I had a chat with my previous brokerage owner in March and told me something interesting. He said, through all of the downturns our city and the world has seen to affect our market in past, the traditional real estate model grows stronger. We grow in market share and in consumer confidence.


I had asked how can that be? We aren’t the cheapest, there are discount brokerages for that. We don’t have the guarantee to sell someone’s home, iBuyers offer that. All the information is available to the public to determine what they feel is market value.


He told me something that I think was really profound. He said, “Aly, you are missing the point!” He then went on to tell me that in real estate, yes, we trade properties. But that’s not our business. Our business is people. Our business is helping that first-time buyer navigate the achievement of one of their dreams of owning their first home. Or being empathic to that seller that lost their job and doing everything you can to help them get out of that situation.


I think more than ever, that message really came through to me.


Today, as I write this, one of the largest property listing services in the US,  Zillow, has suspended all of its instant offer (iBuyer) programs. The new discount brokerages that have entered the market are still asking for their full fees to sell properties upfront. These fees are low, but also don’t carry a guarantee of a sale. And I’ve seen an example of an iBuyers offering significantly lower than market value to a homeowner to purchase the property to hold or flip.


But none of these programs have been able to speak to customers, family and friends. Let them vent their situations about their home situation or their hardships during this time. They also aren’t offering to help their clients with grocery delivery or community outreach to produce essential goods. They aren’t organizing help to local businesses during this time through work or gift cards to provide clients that are waiting for food pickup delays from the grocery store.


This is the business we are in as real estate and mortgage professionals. We are in the business of caring for our people, whether they be our clients, friends, family, or just the next person. We do what we need to ensure our fellow person has been taken care.


My favourite quote, which I shared a few days ago really stands true to this:


"The true worth of a man is not measured by what he does for himself, but what he does for someone else. And if you help another, without concern for a reward or gold. What you give, you shall receive tenfold." - DMX


During this pandemic, I have had sellers remove their home from the market. Buyers have paused their searches and plans. But also, in this time, I’ve had the great opportunity to call and FaceTime some my best friends, family and clients. The conversations all start the same way, we both ask, “how are you doing/feeling?” Many times, real estate does not come up, other times it comes up because those that I speak with are concerned about how my business is doing. It’s in these relationships where I see that we are most definitely in the people business.


So, is the world of online shopping, instant offers and virtual tours replacing the world of belly to belly interaction, care, empathy and service?


Not any time soon.




Thank you for taking the time to read my blog. I would love to connect with you and chat about it or any else you’d like to speak about. My information is below as well as my handles on social media. Thank you. Take care. Be safe.


If you'd like to support local restaurants, CIR currently is offering 1 of 6 $100 Skip the Dishes gift cards. To enter, visit my Instagram handle at @alyjanmohamed and find my weekly good vibes post or click here for details. These business have Skip the Dishes and services like it allowing them to continue to provide their wonderful food to us all during this time and keep their doors open for the future.


- Aly

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I have listed a new property at 167 PANAMOUNT GD NW in Calgary.
Welcome home to Panorama Hills Estates. Walking distance to two Elementary Schools (Public and Catholic) and located in a quiet outer cul-de-sac, with low speed school zone traffic and caring community. Situated on a massive pie lot, the backyard is endless for family fun. With just under 1,700 square feet, as you enter you are welcomed with a completely open to above entrance. Entering from the garage you have access to a walkthrough pantry with ample storage and ease to the kitchen for those grocery runs. Modernized with wood flooring, the main floor open concept living, kitchen and dining fits every family's need. Keep an eye on the kids in the backyard from your kitchen when preparing dinner. As we go upstairs, we have a bonus room for the family to enjoy, 2 bedrooms, a full master suite with ensuite and walk-in closet. Offering great space upstairs, the whole family can enjoy their space. The basement is unfinished and is ready for you to make your own. St Jerome Elementary School (Catholic). Also a member of Panorama Hills Community Centre. This 6 acre private park is for the exclusive use of members of the Northstar Residents Association and features a water spray park, beach volleyball court, cascading waterfall, basketball courts, children's playground, picnic areas, toboggan run and so much more.
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THE BREAKDOWN


In January we have seen gains in median price for all segments except Apartments. Pricing is starting to uptick as we continue into the spring market. As this time brings with it more buyers, the number of listings also increase. With this correlation, you would expect pricing to decline with more inventory. However, when listing growth outpaces demand, we continue to see price increases. 


If you are considering to sell your home this year, I would strongly recommend we sit down and go through the process and prepare your home for the market. You will want to be beat the competition for the buyer's attention. 


Days on Market continue to see declines throughout the segments as more and more inventory is being absorbed by today's buyer. As sales continue to increase and listing inventory declines (or is outpaced by sales) we will continue to see a move to a balanced market. 


If you are currently in the market to purchase, I would recommend you look at what you have seen and ask yourself if it meets 80% of what you want. If not, keep a keen eye on the spring market early so that you can have access to a bit more selection before everyone else. I'm more than happy to sit down with you if you aren't already working with someone and go through the process. 


If I can assist you in any way, whether it be selling or buying, please give me a call or send me an email at ajanmohamed@remax.net and lets go for coffee and chat about how I can help!

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There has been alot of talk in the last year about the housing market. And if you're like me, you have heard that the interest rates play a big role not only in the real estate industry, but the economy and Canada's presence on the world stage. 


But why? Why does it matter than we have seen increases of overnight rates set by the Bank of Canada (BOC) rise over 75 base points since this time last year? is the effect of the rising interest rate all negative for the consumer? How will these changes affect me in the next 5 years? 


I hope I can help in breaking down this information for you to help you better understand this issue and how you mitigate your risk with the change. 


So, lets start. What is interest? It is the cost of borrowing money which needs to be repaid when a loan is provided. There are two types of rates, variable (change over the course of a loan) and fixed (set the same for the duration of the loan). Variable loans are subject to changes in the overnight rate changes. When the overnight rate from the BOC increases, the cost of borrowing funds increases for the lenders, which ultimately pass the increase to the consumer. This works the opposite way when the overnight rates decrease. 


With respect to the consumer, this increase or decrease changes the amount of purchaisng power they have when qualifying for loans and the amount they can receive. As well, it changes where they prioritize what needs to be paid from their household budgets (i.e. the car loan cost is increasing, the entertainment amount will need to be reduced)


By now you are thinking, why would the BOC increase the rates if it hinders my ability to buy goods and services to grow the economy? Well lets look at what other ways the interest rates become important. 


Inflation is where the price of goods and services increase over time. When the economy is peforming well, growing more and more people are spending, one of the natural by products is inflation. As demand increases, supply becomes less causing price to increase. The interest rate is used to slow the inflation rate by reducing the purchasing power of the consumer to ultimately reduce the amount of demand for goods ans services, ultimately easing pressure on price. For most consumers, this is a good thing in that with the lower prices, the value of each dollar can purchase more. 


The other factor impacted by the interest rates is the Canadian dollar and its foreign exchange. When the interest rates increases, the dollar increases, allowing more purchasing power for us on the world stage (yes! shopping in the States doesn't burn the wallet!). When this happens local goods and services become less favourable. This is another way for the BOC to direct consumers to buy foreign in an attempt to ease pricing contraints on local markets. If the cost fo doing business is too high in Canada, the higher exchange helps to allow consumers to ease demand locally and spend internationally. 


With the Canadian economony growth on par with forecasts (see below), the BOC has used the interest rates to ensure they are able to manage the foreign exchange and inflation issues we face. 

CANADIAN GDP IN THE SECOND QUARTER


In 5 years, particularly with the introduction of the stress test, th BOC has positioned themselves to readily act when any changes in the Canadian or world economy surface. The growth of the economy is good, increased foreign exchange leverage is good, but to what extent for the consumers and businesses in Canada? As the Canadian economy grows you will continue to see increases in the rates to help manage the consumers needs. The interest rates are essential to ensure the Canadian economy is at pace with what the consumer needs. 


I hope you found this useful, please feel free to click here to join our newsletter to gain better insight into the real estate market here in Calgary along with chances to win some great prizes. 

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