Have you completed any major home renovations lately? If so, make sure you inform your insurance company. A recent survey showed that of those homeowners with home/content insurance who renovated their home or finished their basement, only 62 per cent updated their policies.
A renovation usually increases the value of your home and can require an increase in the amount of home insurance coverage you’ll need. Of course this will increase the price or your annual home insurance but don’t let that small increase stop you.

Think about it…if you spent $25,000 on a basement renovation without notifying your insurance company and your house caught fire a few months later, you might not have sufficient insurance to cover this loss. Be sure to protect your upgraded investment by remembering to update your home insurance coverage.

Why not put your rent money into an appreciating asset instead of in your landlord’s pocket?

Do you cringe every month when it’s time to write that monthly rent cheque? Like many other renters, you probably wish that your hard earned money was being put towards something that has potential payback but haven’t explored your options because you don’t think homeownership is within your reach. If you are currently renting you may be surprised to learn that there have been recent mortgage product innovations such as a minimal down payment (0%-5%) and extended amortization that can make owning your first home more than a pipe dream.

This is a great time to get into the St. John’s housing market. House prices are expected to appreciate by 12% in 2008 according to Remax. 2-apartment homes and condos are in demand but when it comes to first time buyers, many renters hesitate because they are concerned about two things. The first is that they may not have enough for a down payment. The second is that they are afraid that they may not be able to carry their monthly mortgage payments. Today, these concerns can be addressed with the minimal down payment and extended amortization options that are available to first time home buyers. Renters can now buy their first home with very little down and also not have to worry about high mortgage payments.

With minimal or zero down payment products, many financial institutions will provide you with 100% financing for the purchase price of the house. Some lenders may also let you borrow close to 100% in financing and offer you a small percentage back as cash. You are able to borrow 95% of the purchase price to put towards your down payment, closing costs, or other costs associated with purchasing a home. Do keep in mind that with minimal down payment you will most likely need to purchase insurance and also have to commit to a longer mortgage term.

Remember that if you do have money set aside for a down payment or have RRSPs you should still consider putting a larger down payment because this does lower your total mortgage amount and ultimately the amount you will pay in interest.

If on the other hand you are concerned that you will not be able to make your mortgage payments, then you should consider extended amortization products that lower your monthly payment amount. This is done by having the mortgage paid back over an extended period of time. Your monthly payments on a 35 or 40 year mortgage will be lower than the payments on a traditional 25 year mortgage.

You should note that with extended amortization products, you will be paying more interest over the long run but there are definite benefits to getting into a hot housing market early. Plus, you always have the option of decreasing your amortization period by exercising your prepayment options or by increasing monthly principal and interest payments.

A valuable resource for information on homeownership is the Canada Mortgages and Housing Corporation (CMHC) website. You will find publications such as Bringing Home Ownership Within Reach.

Given the availability of these new options and the resources to support tomorrow’s homeowners, it’s easy to see why many renters may be switching their rental payments to equity building mortgage payments within the next year.

Credit: www.newcanada.com

Oil and Gas Week is underway in Newfoundland. It was conceived to raise the profile of the oil and gas industry in Newfoundland and Labrador and build an appreciation for the impact that it has on the province’s economy. This is achieved through a variety of promotional and educational activities. A particular focus is being placed on educating secondary and post-secondary students about a variety of aspects of the industry, as well as providing information on potential career opportunities for future generations.

Newfoundland and Labrador’s offshore oil and gas industry currently has three producing offshore oil projects: Hibernia, Terra Nova, White Rose.

Residential real estate markets across Canada post solid gains over past decade, says RE/MAX. Pent-up demand, population growth, tight inventory levels, and the longest economic expansion since World War II collectively fueled one of the best decades on record for residential real estate in Canada, according to a report released by RE/MAX.

RE/MAX Decade in Review 1997 - 2007 found that major housing centres across the country experienced strong consecutive growth between 1997 and 2007. Average price spiraled upward while unit sales climbed in tandem as more and more Canadians bought into homeownership. Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return.

Edmonton led the country in terms of percentage increase in average price. The city saw a 203 per cent upswing in housing values - or an 11.7 per cent increase annually - with average price rising from $111,587 a decade ago to $338,636 in 2007. Prince Edward Island experienced the highest percentage increase in unit sales, with the number of homes sold up 119 per cent in the 10-year period.

Percentage increases in home sales varied across the country, with Prince Edward Island experiencing the greatest upswing over the past decade, followed by St. John’s at 106 per cent.

The decade was not without its obstacles – the high-tech meltdown, a US recession, 9/11, SARS, Mad Cow, a blackout that affected the entire Northeastern seaboard, natural disasters such as ice storms, hurricanes, and forest fires and more recently, the credit crunch south of the border. Given the continuation of sound economic fundamentals, it’s expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace.

MLS® residential new listings in Canada’s major markets surged to a new record in January 2008, according to statistics released by The Canadian Real Estate Association (CREA). This made the MLS® resale housing market more balanced in January 2008 than at any other point in the past seven years.Seasonally adjusted MLS® sales activity edged 0.4 per cent lower from the previous month to 28,911 units in January. The small monthly decline reflects fewer sales in Toronto, Calgary, London & St. Thomas, Vancouver, St. Catharines, Halifax and Victoria, offset by a monthly rise in real estate activity in Winnipeg, Edmonton, Saskatoon, Regina, Newfoundland and Labrador, and Ottawa.

Seasonally adjusted transactions in January broke all previous monthly records in Regina and Saskatoon, and reached the second highest monthly level ever for Newfoundland and Labrador real estate.

Record level activity in Regina and Saskatoon made them the tightest major markets in January. The market also tightened in Saint John, Newfoundland and Labrador and Windsor compared to December levels, while becoming more balanced in all other major markets. Edmonton, Calgary and Windsor remain the most balanced major markets.

A more balanced market saw smaller price increases in some markets. The major market MLS® residential average price rose 8.6 per cent year-over-year to $325,183 in January 2008. This is the smallest year-over-year price increase since December 2006.

However, the average price reached new heights in a number of major markets in January, including Victoria, Saskatoon, Kitchener-Waterloo, London & St. Thomas, Sudbury, Ottawa and Saint John.

“The January MLS® reports again show how the Canadian housing market is different than the market in the United States,” says CREA President Ann Bosley. “CREA had expected the growth in average price to slow in 2008, which is reflected in many markets. Sales levels are returning to what we would consider, on an historical basis, as more normal activity.”

There has been quite a debate around the “real estate water cooler” in recent weeks.  Towards the end of 2007  some local builders and subdivisions in St. John’s implemented a new “Economic Clause” to their contracts.  Buyers have been noted to shy away from certain subdivisions and proceed to others that do not insert this clause.  The debate is over whether this clause protects the buyer or the builder.   Does it protect the buyer from an increase in purchase price of the house?  Does it allow the builder the option to raise the price of the house prior to starting construction?

The clause states:

“This Agreement of Purchase and Sale is subject to the Vendor confirming to the Purchaser or the Purchaser’s Agent in writing the final sale price on or before the expiry of 14 days prior to excavation of the dwelling. If no written confirmation of the final sale price is issued by the Vendor on or before the expiry of 14 days prior to excavation of the dwelling the Purchase Price referenced herein before shall be deemed to be the final sale price. If written notification of an increase in the final sale price is issued with which the Purchaser is not satisfied then this Agreement of Purchase and Sale shall be void and of no effect. Upon receipt of the written notice of the increased final sale price from the Vendor the Purchaser must acknowledge in writing within 72 hours their agreement with the increase in price, and failure to do so renders this Agreement of Purchase and Sale void and of no effect with the Vendor returning the Purchasers Deposit or down payment.”

What are your thoughts on this clause? Are you in favor of the builder being protected or the buyer?

I located an interesting article in The Western Star regarding a Corner Brook Realtor heading out to Fort McMurray for 9 days to promote Newfoundland Real Estate.

Realtor brings listings to Alberta to target Newfoundlanders who want to move home

CORNER BROOK
The Western Star

A local Realtor is shopping its western Newfoundland properties to returning Newfoundlanders in Alberta this week.

K.S.A.B. Realty, its president Darren Brake and real estate broker Herb Johnson, have planned a nine-day exhibit in Fort McMurray of its real estate listings.

“Our target market is Newfoundlanders working and living in Fort McMurray who are thinking about retiring and moving back home,” Brake said.

K.S.A.B. has rented a board room at the downtown Clearwater Suite Hotel from Feb. 21-29, bringing professionally designed displays and presentations to showcase Marble Mountain Condominiums, Marble View Estates, Lake Shore Estates, Humber View Estates, Bells Brook Sub-division, and the residential and commercial real estate listed with the company in Corner Brook and throughout the Humber Valley.

In evaluating possible markets, to them, Alberta stood out above the rest.

“Because the target market in Alberta is Newfoundlanders, the prospective purchaser is already familiar with Newfoundland,” Johnson said.

“They know where Newfoundland is and they already know all the benefits of living here. Our job is to introduce them to the properties that are for sale in western Newfoundland.”
Fort McMurray has about a 40 per cent Newfoundland population, giving K.S.A.B. a market of about 24,000 people. With an average salary of over $100,000, they feel this market shows a lot of potential.

“All we need is the correct product — to that effect, we have a lot of options to offer potential customers such as vacant land, vacation homes, condominiums, and new or existing houses,” Johnson said.

It will be K.S.A.B.’s fourth real estate exhibition outside the province.
The company has been attending property exhibitions overseas since 2006.

“Over the past two years we have exhibited at three shows in Ireland and the UK,” Johnson said. “Going to Alberta will give us a presence in a new market.

“Our vendors expect us to promote their properties to new markets and they expect us to spend this kind of time and energy finding emerging markets for their real estate listings.
“Past shows have been successful. We are expecting more from this trip.”