Whether you are buying, selling, financing or re-financing, there is a good chance your home will be subject to an appraisal to assess its value.

Residential dwellings are generally appraised using the direct comparison approach. This means that your home is compared with similar homes in your community and surrounding neighborhoods using current sales data. The appraised value reflects the age, condition and size of your home in relation to those properties that have recently sold in your area. If there has been a fair amount of sales activity, appraisers try to use data that is no older than 90 days. Similarly, your home’s value is in part based on being able to successfully market and obtain a sale in approximately a 90-day period.

The size of your lot and where it is situated in your neighborhood can bear on your valuation. If your home faces or backs onto a park, if it fronts a busy collector street or thoroughfare, if it is located across from a school or offers easy access to the LRT, all of these elements will factor in the final appraisal. According to Kira, access to the LRT is considered to be very desirable, while being located across from a school may have a negative influence on your home’s appraisal.

A major consideration in determining your home’s appraised value is the degree to which it conforms to the other properties in your neighborhood. Kira emphasises that homes built or renovated to a specification far beyond the comparables in the area, will not necessarily see a corresponding dollar-for-dollar increase in value.

If you are looking to maximize your valuation, consider build specifications and standards that can be supported by comparable properties and transactions in your area. On the other hand, if you are looking only to maximize your love and enjoyment of your home – the sky’s the limit.

Here are some other factors that may influence your home’s appraised value:

Hot Tubs & Sheds
If these can be disassembled and moved, they are considered chattel and do not have an impact on your final valuation.

Landscaping
Many people are dismayed to discover that upgraded and extensive landscaping does little to influence the final appraised value. A beautiful backyard is a joy to the homeowner, but it’s tough to realize a return on investment from the appraisal perspective.

Incomplete Renovations
These usually result in a lower appraised value. If you are renovating a home and may need to refinance to fund the project, Kira suggests you have the house appraised prior to starting the work.

Window Coverings, Wall Treatments & Colours
Window coverings are generally considered chattels and do not have a direct bearing on value. Paint choices are unlikely to significantly increase a home’s value, however unusual treatments, loud or harsh colours or other uncommon variations may impact the appraiser’s opinion saleability.

Updated Kitchens & Bathrooms
New faucets, fixtures, flooring and cabinets can help increase your appraised value. However, you want to ensure that you are upgrading to a standard seen in other properties in your area, not greatly exceeding the neighborhood norm.

New Appliances
Unless these are built-ins, appliances are normally considered chattel and are not factored into the appraisal.

New Roofs, Exterior Finishes & Furnaces
These items will be taken into consideration as part of the overall condition of your home. A home’s value may be lower if these items are in poor condition, but a new furnace (for example) will not necessarily increase a home’s value on its own.

Air Conditioning, Heated Garages & Heated Driveways
As an isolated upgrade not generally reflected in the neighborhood comparables, these features won’t necessarily enhance your home’s value. However, if your neighborhood is full of homes that include these attributes, your final value may be negatively impacted if your home doesn’t include these.

Finished Basements
Homeowners can usually expect a value increase proportionate to the cost of the renovation as long as the work is done professionally and within the specifications common to the area. In a starter-home community, an extensive wet bar, wine cellar and media room won’t likely see a value increase proportionate to the cost of developing it.

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Two months into the year, Calgary’s real estate market seems to be experiencing a noticeable shift in momentum, with a consistent rise in optimism and a slow and steady return to more balanced numbers across all sectors. February sales totalled 1,342 units, which is still 19% below historical averages, but an improvement over the past two years, hinting that worst is behind us and the Calgary market may finally see some much needed improvement.

Throughout the month of February, our team saw a surge in the market, with strong sales and plenty of showing activity on our listings throughout most sectors. With a limited number of new listings hitting the market in the past two months, inventory levels in most market segments remain low. The lack of selection is especially apparent in new homes priced under $850,000 where demand is high and options for buyers are few and far between.

 

We anticipate more new listings will hit the market in the coming weeks, hopefully lending more options and a greater selection of properties as we head into warmer weather and the usual Spring Rush.

Detached Home Sector

Keeping with the trend seen throughout the past several months, the detached market continues to show improvement, with notable declines in inventory and many price ranges showing inventory levels comparable to stronger years past. With sales up 19% and new listings down 19% compared to February of last year, months of supply has gone from 4.26 to 2.41, firmly levelling off the market and nearly tipping the scales into sellers market territory in certain markets. Although benchmark pricing is still down year over year, we expect to start seeing modest price gains moving forward.



Semi-Detached Home Sector:


February semi-detached sales totalled 127 in February, a 15% increase compared to last year and another sign that a stronger market is on the horizon. Improved sales combined with 16% fewer new listings compared to the same time last year helped to bring months of supply down to 3.44 from 5.02, placing the majority of the semi-detached market in a balanced state - especially in the inner-city infill markets.

 





Townhome Sector:


Despite substantial improvements in all other sectors, the townhouse sector remains fairly flat comparing to February last year. The only sector to see a year over year decrease in sales activity (albeit a very modest 3%), the townhouse market did see a 7% reduction in new listings which helped to bring a very minor improvement to months of supply, from 4.96 to 4.41. Despite a sluggish start to sales improvement in this sector, we are still optimistic about activity for the remainder of 2017, although pricing may not see improvement for some time yet.



Apartment Sector:


Showcasing the most notable improvements of all sectors on a year-over-year basis, the apartment market seems to have finally turned the corner in February 2017. Sales are up by a whopping 40% comparing to the same time last year, and with new listings down 8%, months of inventory shrunk from 8.27 in 2016 to 5.88 in 2017. While still technically a buyer's market, we are hopeful that market conditions will balance out over the next 3-6 months in most price categories and we will see this sector finally level off in 2017.



New Infill Sector:

Continuing the trend seen overt the past 6 months, the new infill sector has shifted from heavy supply to record low inventory levels across most price categories. This has left new home buyers with very little to choose from, especially in entry level price points, where inventory is almost non-existent. Although builders have resumed their search for land and many now have numerous projects underway, the lack of completed home inventory is causing a fairly large gap in the market which may start to result in modest price improvements if conditions persist.

 

 

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Detached sales activity boosts February housing market

After the first two months of the year, Calgary's detached sector continues to drive a slow transition in the housing market. February sales totaled 1,342 units, which is still 19 per cent below long-term averages, but an improvement over the past two years. As sales kept trending upward, detached inventory levels continued to ease in February. These conditions caused months of supply to fall to 2.4 months, putting less downward pressure on pricing. 

Unadjusted detached benchmark prices totaled $501,900 in February, which is one per cent lower than prices recorded last year, but slightly higher than January figures.

"There seems to be a new sense of optimism these days," said CREB® president David P. Brown. "Some sellers are feeling upbeat about the changing landscape and the improved chances of selling their home. Other people are looking at the spring market with caution and wondering if we're going to see a higher than expected surge of listings. While there's less product on the market right now, sellers still need to be realistic with their pricing."

The amount of excess inventory eased in the overall market in February, setting the stage for a transition to a more stable market this year. Months of supply totaled 3.4 months, down from five months over last February. At the same time, the sales-to-new-listings ratio trended from a near record February low of 39 per cent last year to 55 per cent this February.

With sales improving and new listings and inventories contracting—two key measures of market balance, there's good evidence to show that the housing market has started a trend toward more balanced conditions.

 "The transition in the housing market appears to be underway," said CREB® chief economist Ann-Marie Lure. "However, it is important to note that this change is primarily being driven by improvements in the detached market and stability in the labour market."

"It will take some time for these conditions to translate into all housing segments and achieve price recovery," said Lurie. "But all indicators continue to point toward a slow transition from a contracting market toward one that is stabilizing at lower levels."

Click here to view the full City of Calgary monthly stats package. 

The full Calgary region monthly stats package will be available later today on creb.com.
 
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