Beauty may be in the eye of the beholder, but the same might not be said about the value of your home in the eyes of a civic assessor. When the City of Calgary assesses your property in order to determine the value of your home and in turn, your share of municipal tax, there’s always the possibility of a distortion in how much your home is really worth and how much the tax will affect your household bottom line.

City formula

Conducted annually and following stipulations in the provincial government’s Municipal Government Act, the assessment conducted by the City of Calgary bases estimates on analysis of the real estate market and determines the market value of your property by July 1. The formula used to calculate your taxes is relatively simple. The assessed market value of your property is multiplied by a tax rate determined by the city’s budget, usually determined in April. Assessment notices are then mailed out informing you what your taxes will be as of July 1 of this year.

Independent appraisers estimate that for every $100,000 your home is worth on the real estate market means roughly $500-$600 of tax you might wind up paying the city. So far in 2013, the city, based on nearly half a million assessments already mailed out have determined that house and condo properties have increased by three percent over the year with the median value of a home estimated at $410,000 and condos pegged at $250,000. The city deduced that 57 per cent of residential properties will enjoy a taxation decrease, with 43 per cent will experience an increase. Only five per cent of properties assessed will increase or decrease by more than 10 per cent of 2012 taxes.

Economic reality

The problem with assessments, according to most realtors and independent appraisers, is the city’s estimates don’t reflect economic reality in the real estate market. For openers, 2013 appraisals are based on July 1, 2012 market values, and as figures released regularly by the Calgary Real Estate Board indicate, fluctuations present a different picture. As well, given that the city uses a sales comparison approach, their most common methods of assessing residential property, the assessor bases findings on market figures, and never even sees the properties being assessed. This fails to take into account any damage into the property, curb appeal, renovations or even the presence of additional assets like a detached garage.

An assessor may not even be using the accurate square footage in comparing value to other homes in the neighbourhood, which might further misrepresent the value of your home, which in turn spells an inaccurate amount of property taxes you may have to fork out annually. That’s because the city follows a mass appraisal process based on available statistics that don’t take into account individual characteristics of a property. To counter any uniform estimate, the city also uses multiple regression analysis before arriving at a final figure.

Evidence of inaccuracy

In Calgary, Realtor blogs are rampant with anecdotes of how property values of homes they listed and sold wavered from city assessments. Several Realtors observed that the use of the two models could create inaccuracies as high as 50 per cent. Even in a select neighbourhood. One side of the street may have homes assessed up to seven per cent higher than real market value, while property across that same street may witness values decreased by that same percentage.

To ensure a more accurate portrayal of property values, residential home owners are advised to check the information about their home, from square footage to extent of renovations. They should also contact a local realtor who can provide statistics of the value of their homes sold on or around July 1 the previous year.

However, when it comes to balancing the value of your home versus the amount of tax you have to pay, you can’t have it both ways. A lower property value obviously means lower taxes, but it may also have a detrimental effect on your equity, and vice versa. For more information on how assessments may affect you, visit the City of Calgary online at calgary.ca/assessmentsearch.

This Beautiful 1092 sq ft 3 bedroom bungalow is located at 827 Mckenzie DR SE. Main floor is completely renovated with new paint and flooring. Comfortable living and dining area is open to kithen and bay window. Spacious kitchen has white cabinets and granite counter tops.

Large master bedroom, two additional good sized bedrooms and 4 piece bath are on the main floor. This home offers updated windows of good quality and newer high efficiency furnace.

Two piece bath and some development started in the basement. A vehicle sized gate off lane allows access to rear yard. Home has lake privileges.

Great opportunity for first time buyer or an investor, offered at $339,900.

As the economy slowly crawls back to almost equaling the plateau it achieved five years ago, when the stock market crashed and the Eurozone kerfuffle plunged the financial world into chaos, one major issue ranking high on the scuttlebutt circuit surrounds what will happen to mortgage rates. It makes sense, since the housing and construction markets are primary indicators of the economy’s direction.

Many homeowners have benefited from the reduction in the rates over the years, particularly five-year fixed closed rates, which were as high as six per cent 10 years ago and have since dropped to more than half by the end of 2012. An even longer-term picture shows that current rates are barely a third of what they were even 20 years ago.

And those who’ve been shopping around since the beginning of 2013 can have their pick of even lower offerings from mortgage brokers and the big banks, which have been offering incentives as low as three per cent. Holders of variable mortgage rates, which at this writing enjoyed a range from 2.6 to 3.6 per cent in Calgary, are also breathing easy, while anticipating that the rates don’t climb anytime soon.

At this point, that’s not likely to happen. With the Bank of Canada rate at a record low hovering around the one-per cent mark and amid predictions that Gross Domestic Product will slowly crawl up to roughly two per cent, there’s no incentive to jack the rates up. That’s good news for first-time buyers, faced with tighter federal mortgage financing laws, and looking at existing rates as a way to handle payments in the wake of rising house prices.

Current homeowners will also enjoy the rates, making it easier to get a handle on their mortgages. Since interest is normally the first component of a mortgage that’s eventually paid off, a lower rate mean that their principal will be easier to tackle. And according to the Canadian Association of Accredited Mortgage Professionals, a record one-third of Canada’s six million mortgage holders Canadians are actually ahead of the curve when it comes to their payments.

Ironically, this is all happening when the average Canadian consumer debt is just below $26,000, cited a report by credit bureau TransUnion. The report, which excluded mortgages, stated that car purchases and renovations were two major sources of debt, financed by credit cards and lines of credit.

Arguably, lower mortgage rates are easier on the pocketbook and would allow consumers enough flexibility to pay off their credit cards. But should the rates start increasing, homeowners face a slippery slope in terms of repayment leverage. Many financial experts state households should be more financially savvy in terms of they should be spending their money and measuring their payments against existing cash flow for starters. Examining the interest in repaying lines of credit and credit cards as well as their mortgages is also strategically smart in terms of prioritizing what debt needs to be dealt with.

Even in Calgary, the strongest economy in Canada, it helps to plan ahead.

Regardless of the standard of living in Calgary, consumers have had to contend with two recently emerging factors that could jeopardize their chances of owning a home.

For openers, rising housing prices have been a consideration for a few years, although the average price of a family home in Calgary at the beginning of 2013 was $496,579 – slightly lower than its Toronto equivalent at $558,345 and less than half the price of a detached bungalow in Vancouver.

The other factor concerns the federal regulation of mortgage lending standards, which not only shortened the amortization period by five years to 25, it also reduced the equity level a consumer can borrow against a home’s value from 85 to 80 per cent. The increase in monthly mortgage payments and a shorter ceiling on borrowing limits can potentially shut out a significant number of potential home buyers.

One alternative that’s been receiving attention of late is the idea of rent-to-own, which enables residents to contribute an amount of monthly rent for a predetermined period (normally three years) with an option to eventually buy the home.

For sellers trying to unload a dwelling, exercising the rent-to-own option spells more potential customers interested in taking occupancy. And in the case of a sluggish economy, those trying to unload their homes face a new market of potential tenants to help contend with any decline in home values while keeping pace with payments. Charging fair market rent countervails the economic stress of a monthly mortgage on the place as well. Sellers are also off the hook for renovations costs, since a rent-to-own agreement not only makes tenants responsible for maintenance, including footing the bill ill for their own repairs – even during the initial rent-to-own agreement period.

If at the end of the initial period, tenants decide not to buy, sellers still have the option to list the home. The big payoff in such a case is the higher return a seller can receive on a house appreciating over time and the curb appeal of a dwelling if a tenant had repaired and renovated the premises.

For buyers overwhelmed by housing prices and tighter mortgage rules, going the rent-to-own route is an opportunity to bypass the amount of cash needed for a down payment. The option is welcome news for families with bad credit history, job losses, or those who spent much of their savings migrating to the city. Avoiding the down payment in a rent-to-own allows those buyers to fix their credit history and grow their savings. Opting for rent-to-own is also easier than qualifying for a mortgage loan.

But buyers should also take into consideration that entering into a rent-to-own agreement includes putting down cash to cover the upfront option fee, usually about two per cent of the house’s value. That money goes towards the down payment of the house should the renter decide to buy the place upon conclusion of the rent-to-own period. If the tenant fails to cover rent each month or terminates the agreement before the period ends, that fee goes to the homeowner.

Still, despite these requirements, the risks surrounding a rent-to-own alternative are rather small, especially if low income is an issue. A local Realtor will also be willing to discuss additional amenities and disadvantages. 
 

When Calgary’s economy experiences a boom, Calgarians get busy. The heightened activity is particularly evident in the real estate industry, with enough hustle and bustle to qualify as a stampede in its own right.

In such a period, everyone gets into the act, from real estate agents inking deals and lawyers drawing up contracts to inspectors guaranteeing homes are up to code and contractors hired to build a home, boost an abode’s curb appeal or help consumers personalize their new digs.

However, this flurry of transactions can create an environment where a lot of unscrupulous behavior can fly under the radar. More specifically, the media is frequently abuzz with anecdotes of fraud, sloppy work and other improprieties involving the outsourcing of contract work, despite the fact that reputable contractors in Calgary are by far in the majority. Stories surrounding shoddy workmanship, unsafe renovations or even contractors disappearing before the job is completed (or even started) abound, especially during a boom period.

To ensure consumers get the work done properly and legally, check to see if the contractor has a valid business license, which is required by law under authority of the City of Calgary. If in doubt, get the contractor’s contact correspondence and business name and call the City at 403- 539-8135 to confirm the status of the information. It also helps to find out whether the contractor is a member of a number of associations, such as the Better Business Bureau or the Canadian Home Builders Association. These organizations will also have a list of reputable candidates.

Shopping around is also a good idea. Consult at least a handful of contractors to get estimates in writing, including costs, details of the work to be done, starting and completion dates and whether the candidate also subcontracts, which in turn will require additional investigation. An added bonus is whether a contractor can take care of any building permits required for a project.

Better Business Bureau

If a contractor requires a deposit, find out whether the individual or company is bonded via an insurance company and a pre-paid contractor’s licensed as required by Service Alberta. Any payment in advance that is bonded will cover such situations as fraud, theft and negligence. Questions surrounding such a transaction can easily be answered by calling Service Alberta toll-free at 1-877-427-4088 or going online at Service Alberta to conduct a provincial license search.

Keep in mind that contractors are not legally required to carry liability insurance, meaning that any property damage on behalf of the contractor might not be recouped without coverage. If this is a concern, opt for a contractor who carries such coverage and confirm the policy with that person’s insurance company. Similarly, contractors cannot sue a consumer in the course of a project, unless the latter is responsible for an on-the-job injury. Ask the contractor about coverage by the Worker’s Compensation Board.

Another oversight may involve liens against the property owner if the contractors don’t pay their suppliers or subcontractors. One safe for consumers to protect themselves is to check the property title record at a private registry. In absence of a registered lien, a consumer can pay 90 per cent of the final bill and withhold the remainder for 45 days. After than period, if there are no outstanding expenses, the final amount is paid.

Finally, most of these fine points should be covered under contract. If a contractor’s written agreement doesn’t cover these areas, or doesn’t even bother to supply a contract, continue shopping around.

By taking these proper steps, consumers like you will have extra protection against any damage to their premises, creating an unsafe work area and potential financial hardship. These precautions will also help ensure that regardless of the job, it will be completed to your satisfaction.
 

Life in Calgary, home of Canada’s most robust economy, doesn’t mean very much unless you have a roof over your head. It doesn’t help when the competition for active listings is so fierce, sometimes an active listing doesn’t even last a day before the ink dries on the sales contract. Folks who prefer to rent until they get an opportunity to buy a home aren’t all that fortunate, either, given Calgary’s vacancy rate barely hovering above the one-per cent mark. In fact, despite the competition for real estate, it’s still more prudent to purchase a home than to rent a place, since the inventory of active listings is comparatively much higher.

Whether you choose to purchase a house, condominium suite or townhouse, it pays to weigh the advantages of each option, but it’s more important to settle on a choice based on your lifestyle needs. For folks intent on starting a family, the overwhelming favourite is a standard home, while empty nesters and young professionals more intent on establishing their careers often go the condo route.

In terms of what’s available, the Calgary Real Estate Board reports that single family homes dominate the active listings. Its January reported cited 2,073 units sported “For Sale” signs that month, more than double the combined availability of condo apartments (640) and condo townhouses (369). In fact, that ratio has been consistent throughout all of 2012, even during the peak month of May when single family home availability hit 3842, considerably higher than condo apartments at 642 at and condo townhomes at 455.

Taking affordability into account, the average price for a single family home in 2012 was 481,259. Townhomes in 2012 averaged $316,750 and Calgary condo apartments sold even lower at $284,702. Even with January fluctuations, which saw townhomes climb to $320,589 and apartments dip to $280,272, going the condo way seems to be a better bet on a buyer’s pocketbook.

Or is it? With the average size of a condominium apartment or townhouse smaller than most family homes, chances are you’ll get the same bang for the buck if you pro rate the amount of square footage of living space you’ve paid for. Most housing units ─ from laned to detached ─ offer quite a lot more privacy with the added luxuries of a yard, garden and even a landscape you can customize to your tastes. That additional space also comes in handy for growing families.

Springbank Hill House

Depending on the age of a house, utility bills will vary as well as the mortgage, although the latter is considerably higher than its condo equivalent. But there’s the benefit of no condominium fees and with that, no codes of conduct set by a complex’s condominium association to follow.

On the other hand, condominium owners tend to have many of their utilities covered in their monthly fees, and most residents are drawn to the low-maintenance nature of their homes, in terms of both financial costs and elbow grease. However, depending on the dwelling and what is actually covered by those charges, the combined expenses of a mortgage and condo fees could sometimes be as high as a home mortgage, a factor to consider when choosing a type of home.

Many condominiums, particularly apartments do have the added amenities of workout rooms, saunas, underground garages and even swimming pools, within a few steps away from their suites. As well, townhouse condo owners aren’t faced with the burdensome tasks of shoveling snow and mowing grass. However, maintenance of these services are also reflected in condo fees.

The bottom line is besides checking the financial end, such as evaluating the cost of a house mortgage with a combined cost of a condominium mortgage and association and maintenance fees, consider which type of housing fits your lifestyle the most. What isn’t reflected in your calculations may be the tipping point that determines your preference.
 

The first thing you learn in the stock market is “Buy when high, sell when low.” And when it comes to selling your home in Calgary, such sage advice is the same. But when factoring in Calgary’s status as the hottest real estate market in Canada at a time when the economy is recovering with a vengeance after the bear market ensued a few years ago, sellers have to consider a number of other variables in the equation.

Normally, spring is seen by many sellers as the best time to get their property listed, while winter is normally viewed as the worst season during the year to sell. To many buyers, snow tends to have less curb appeal than a fresh lawn, while the cold conditions tend to deter people from venturing outdoors, an obvious prerequisite to relocating.

Summer vacations usually distract folks in selling mode, while the visual inconvenience of dead leaves on the property landscape during the fall tend to make buyers lose interest.

This cyclical behavior is supported by 2012 statistics released in January by the Calgary Real Estate Board, which cited May as the hottest-selling month at 2,199 units, with March, April and June sales hovering above the 2,000 mark. That’s a huge contrast to the winter doldrums that affected sales, specifically in December (1,083) and January (1,068).

But there’s plenty of evidence to suggest there are several serious buyers out there year-round. The average price of a home sold each month was well above its benchmark. And when comparing sales with active listings, December managed to clear 40 percent of its inventory (considerably higher than warmer months from June to October), a performance level only marginally lower than the 43 per cent ratios of March and April and the 42 per cent level registered in May, the highest selling month of the year. Save for January (24 per cent), the level of competition for available real estate doesn’t seem to fluctuate wildly throughout the year. And if January is once again taken out of the equation, the difference in the number of days a house is on the market during peak and valley times is two weeks throughout the rest of the year.

One school of thought suggests sellers to list their home early in the year to get a leap on the competition due to a potential glut in available homes. In 2012, the number of available homes spiked in March spiked to 5,092 from February’s active listing tally of 4,736, before peaking at 5,739 in May. The prevailing logic is that smaller inventory increases a listed home’s exposure in the face of increasing demand, which in turn drives up the price. Keep an eye on the market to help plan your selling strategy if you believe this tactic is right for you.

The other alternative is to sell when you think you’re actually ready to sell, taking into account your future family plans. A Realtor can advise you on other ways to increase the value of your home by suggesting curb appeal tips and necessary repairs to ensure a shorter listing period and a higher market price.

Regardless of what time of year you decide to sell in the hottest market in the country, timing is only one of several ways you can ensure a good return on your property investment.
 

If Calgary can call itself the Heart of the New West, then it stands to reason that one neighbourhood can dub itself as the city’s New North. If the mountain façade at the main street entranceway to the area is any indication, Skyview Ranch is definitely one urban frontier worth exploring.

From the moment shovels started turning the turf in 2009; Skyview Ranch has quickly become one of the most attractive residential spaces in the city. Nestled on the corner of Metis Drive NE and Country Hills Boulevard NE and expanding outward to the northeast, the area on the edge of town boasts more than 10 square kilometers of breathtaking natural scenery, made even more accessible via the network of pathways, parks and wetlands that are home to Alberta wildlife.

Fans of green space find Skyview Ranch to be an ideal panoramic postcard spot to take in the Rockies piercing the open skies to the west, with the prairie foothills looming in every other direction. With 1,800 residents in more than 800 dwellings, Skyview Ranch is currently one of Calgary’s smaller neighbourhoods, but one that’s gained a great deal of attention since development started a handful of years ago. In the past year alone, the number of residential units almost literally doubled in number, in response to the overwhelming demand for housing in the city. In fact, the establishment of Skyview Ranch has led potential buyers to consider purchasing in the northeast quadrant of the city for the first time in years.

When it comes to housing options in the neighbourhood, nearly a dozen developers have introduced the latest models in residential living that include condominiums, townhomes, semi-detached homes, front drive units and laned houses. Most commonly available dwellings tend to be eye-catching two-storey, front drive units featuring a double garage, complete with 2.5 baths, three bedrooms and the latest in stainless steel appliances and granite counter tops. Depending on the size of the homes, expect the price tags to vary from less than $400,000 for a 1,500 square-foot model to more than $500,000 for housing with greater than 2,500 square feet.

2 Storey Home

Because of its outskirt location, Skyview Ranch offers a taste of country living, with access to most amenities and services in nearby Balzac, home of the recently-built CrossIron Mills shopping centre. The neighbourhood is only seven minutes away from McKnight International Airport and is quickly accessible to downtown or even out of town via the Deerfoot immediately west. Like any new development, Skyview Ranch continues to be a work in progress. Future amenity plans include an LRT station for easy access to the rest of the city, a centrally-located recreation centre, a shopping mall, and onramps to a proposed ring road system − all of them designed to keep the adjacent ecosystems intact.

For folks who enjoy life on the edge of town, with a cross-section of urban exposure and rural hospitality, Skyview Ranch is one reason to look northward.

There’s an old saying among opportunists: Strike while the iron is hot. The same goes for Calgary’s housing market, and in the case of rental properties, it’s best to scramble while the skillet is scorching.

That’s because, like the real estate sales market, availability for units in the rental sector is also scarce, largely due to the influx of workers into a scorching economy that graces Calgary.

The Calgary Real Estate Board reported the availability of units for sale at 3,100 in January. For renters, the pickings were slimmer according to the Canadian Mortgage and Housing Corporation. Most recent statistics gathered last October cited the vacancy rate at 1.3 per cent, or just less than 450 empty dwellings out of 34, 212 total rental units in the city.

“Some would look to purchase as mortgage rates continued to be low; while others preferred to rent − good news for our industry,” said Keith McMullen, president of the Calgary Residential Rental Association’s Winter 2013 edition of Rental Review. “We watched throughout the year as vacancy levels gradually began to decline and this trend has continued.”

And even though nearly 400 rental units were under construction at the beginning of 2013, pundits see no reason why the level of vacancies won’t exceed two per cent. Cutting into any potential vacancy increase is the fact that the overall rental inventory has also decreased from 34,818 to 34,212, over the past year, largely due to conversions to condominiums.

Taking into account what is actually available, the CRRA estimated that price increases have been modest at best ─ between two and five per cent throughout 2012. CMHC figures pegged the average monthly rent for a two-bedroom home in Calgary last October at $1,150. For downtown renters, the average cost was $1,240 for the same type of unit, the highest in the city. Both organizations predicted that as long as migrant workers keep moving to Calgary and scarcity remains an issue, price increases will remain steady.

“Landlords and property owners will continue to see interest in their rental units in 2013 as employers expand their payrolls and as people look for a place to call home after moving from another region,” said the CMHC in its Fall 2012 Rental Market Report.

Still, for all the advantages of owning a home, some consumers believe that renting is a lower-risk alternative to purchasing a home. The numbers bear out their logic. A down payment on a listed home must be no less than five per cent of the principal in order to qualify for financing, and considering the average price of a Calgary home in January was $434,942, a consumer would need nearly $22,000 in order to take possession. In comparison, renters wanting to live downtown would need to shell out slightly more than one-tenth of that amount to cover first month’s rent and security deposit.

Although the CERB declared that more people are choosing to become homeowners these days, the CRRA says there still remains a significant population in Calgary that still prefer to rent. Said McMullin in his CRRA quarterly column, “There is reason for optimism as we move into 2013.”
 

As the fastest-growing metropolis in Canada, Calgary seems to have everything, from economic prosperity to entrepreneurial opportunity. Everything, that is, except available housing. The Calgary Real Estate Board stats at the beginning of 2013 bear this out, with less than 3,000 available units listed, a 15 per cent drop from the end of 2011.

In response, the sod in outlying areas is being turned faster than ever, with new neighbourhoods like Auburn Bay, Evanston, Sherwood and Walden popping literally out of what used to be grassland. That’s kept such builders as Melcor, Homes by Avi, Jayman, Landmark, Greenboro and scores of others busy trying to keep pace with the demand, which shows no sign of stopping.

Consumers are also looking at resale homes, dwellings that have existed for years, which have become available in older neighbourhoods. And still others are looking at newly-built units gracing their presence on streets long familiar to Calgarians.

Choosing between a newly-built or resale home almost always comes down to personal preference. And like any other lifestyle option, each type of unit has its own set of advantages.

If consumers are looking for a long-term investment, new homes are normally preferred because of their durability, thanks to improved engineering and construction technology, from the joists keeping the floor level to the insulation that protects families from the outdoor elements year-round. Materials in construction are stronger and more energy-efficient than ever, cutting down on the heating and electrical bills that plague older units. Strict adherence to building codes also cut down the risk of hazards, such as fires from faulty wiring. Such quality also decreases maintenance over time, including the urge to make repairs or renovate and the need to improve a property’s curb appeal. And most builders have warranties to safeguard their work to protect consumers from damage associated with plumbing or heating system failures. Beyond those basics, new homes also sport such perks as hardwood floors, granite countertops and the latest in stainless steel appliances.

Resale Home

Resale homes on the other hand have accessibility on its side, given that they are located in neighbourhoods with existing services, from convenience stores to schools within walking distance. Unlike new home neighbourhoods which usually see families residing in units that lack complete landscaping or even light standards on the streets, resale home areas have all those services intact. They also have a pocketbook advantage of not being subject to GST tacked onto the sticker price.

Recently, the federal government introduced a new home GST rebate program on units costing less than $450,000. Consumers who bought a home from a builder can apply for such a rebate within two years of possession date. Late in 2012, the provincial government offered additional consumer protection with its introduction of the New Home Buyer Protection Act, which once passed will make home warrantee coverage mandatory for builders to provide on new homes being constructed this fall. Additional stipulation include warrantees of one year for labour and materials, two years for defective materials and labour on distribution and delivery systems, five years of building envelope protection in which a builder must provide a consumer with additional years of coverage, and 10 years on major structure components.

Such legislation would also be a boon for consumers wanting to purchase an infill home: a newly-constructed unit that replaces a previous building. With all the amenities of a new home, combined with the benefits of living in a fully serviced neighbourhood, residents get the feel of getting the best of all options.

But then, if one manages to buy a home in Calgary, one already becomes the envy of the rest of Canada.