Calgary home buyers, sellers in muddy legal waters after flood

For people buying or selling a home, having the property flood in the midst of a transaction can create a whole new set of headaches.

Who’s responsible for the cleanup? Whose insurance to use? What happens on the date of possession?

The Calgary Real Estate Board is urging people in the midst of residential real estate transactions to consult their lawyers to find out the impact of the devastating floods that hit the city.

“Those who have closings or sales that were affected by the flooding in Calgary and surrounding areas should call their lawyers as soon as possible for guidance. All questions must be referred for a legal opinion and addressed on a case-by-case basis,” said the board on its website.

“Lou Pesta, senior associate at Walsh LLP, recommends that all parties attempt to resolve the situations fairly. He also advised that for houses which are affected, no keys should be exchanged until the emergency has subsided and any legal issues have been resolved.”

Jeff Kahane, a Calgary lawyer specializing in real estate, said the situation right now is a mess and a complicated one with a number of different issues, which are very situ-ationally dependent.

“It’s the biggest week for real estate of the year, in a year that has been exceptionally busy in general, and then you throw in all the flood issues, it’s just been nuts,” Kahane said.

“It’s a mess.” In a blog on his website, Mike Fotiou, associate broker with First Place Realty, said there are more than 550 homes now listed on MLS in the flood-affected areas, the majority of them being condos.

The affected communities are home to more than one in five condos now listed in the city.

“Over 200 homes were sold in those communities in the past 30 days. As to buyers who recently closed on homes heavily affected in those areas, each of their cases will need to be addressed on an individual

basis as many properties are no longer in ‘substantially the same condition’ as outlined in the purchase contract,” he wrote.

In a blog on its website, the Real Estate Council of Alberta said it has already received calls from industry professionals about what will happen to transactions that were underway.

“What should industry professionals do if the flood has destroyed their brokerage office, their contracts and other paperwork? What is to be done for a consumer who has sold his or her home and purchased a new one, when the new home has been damaged by flood waters? What about a seller brokerage agreement for a seller whose current home is no longer saleable because of extensive damage?” it said.

“Brokerages and offices that have suffered flood damage and may have lost their records should, to the best of their ability, start recreating transaction records using copies of contracts obtained through lawyers, lenders and the consumers themselves. Call the real estate lawyers involved, call the mortgage broker, call the lender and call the local bank, if possible. …”

The Real Estate Council of Alberta said industry professionals should also reach out to their clients, both buyers and sellers, who are currently involved in transactions in areas affected by flooding to find out how clients wish to proceed.

“Once you are clear on how the consumers want to proceed, a determination has to be made as to whether that course of action is legal. If all parties to a transaction do not agree on a course of action, recommend to your clients that they seek legal advice from a lawyer familiar with handling such disputes,” the association said.

© Copyright (c) The Calgary Herald

Calgary top contributor in national advance for new home prices – New Housing Price Index rises by 0.5%

Statistics Canada reported Thursday that its New Housing Price Index rose by 0.5 per cent in Calgary for the month and by 0.2 per cent across the country.

“Builders reported that higher material and labour costs as well as market conditions were the main reasons for higher prices” in Calgary, said the federal agency.

Nationally the index rose following a 0.1 per cent increase in March and similar gains over the past 12 months.

The biggest monthly price advance was in St. John’s (one per cent), following eight consecutive months of little or no price change, said Statistics Canada.

New housing prices were also up in Hamilton (0.8 per cent), Winnipeg (0.6 per cent) and Saskatoon (0.3 per cent).

On a year-over-year basis, the NHPI rose two per cent in the 12 months to April, following a similar increase the previous month, added the federal agency.

The main contributor to the advance was the combined region of Toronto and Oshawa, where the year-over-year increase in contractors’ selling prices was 2.9 per cent.

For the fifth consecutive month, Winnipeg recorded the largest year-over-year price movement in Canada. Prices were up 5.5 per cent in April following a 5.1 per cent advance in March. Other significant year-over-year increases occurred in Calgary (4.7 per cent), Regina (3.1 per cent) and Hamilton (2.8 per cent). In Calgary, annual price gains have been generally accelerating throughout 2012 and 2013, said Statistics Canada.

© Copyright (c) The Calgary Herald

Calgary house price growth best in Canada

Calgary experienced the best monthly growth rate in house prices in May for repeat home sales across the country, according to a new report released Wednesday.

The Teranet-National Bank National Composite House Price Index said prices in Calgary were up 2.3 per cent from the previous month.

“The decline in active listings has played a part in the rise in prices. Homes on average are taking less time to sell compared to 2012, and a number of homes are also receiving multiple offers,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp.

Nationally, prices rose by 1.1 per cent in the 11 markets surveyed. It was the ninth time in the 15 years of index data collection that May prices were up 1.0 per cent or more from the month before. The previous occurrences were in 2002, in 2004 through 2007 and in 2010 through 2012, it said.

The May monthly gain was one per cent or more in seven of the 11 markets surveyed led by Calgary. They also included Edmonton (1.9 per cent), Hamilton (1.4 per cent), Montreal and Winnipeg (1.2 per cent), Ottawa-Gatineau (1.1 per cent) and Toronto (1.0 per cent). Lesser monthly increases were recorded in Quebec City (0.8 per cent) and Vancouver (0.7 per cent). Prices were flat in Halifax and down from the month before in Victoria (0.8 per cent).

The index is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index.

On a yearly basis, prices in Calgary rose by 5.8 per cent — the second highest in the country behind Quebec City’s 6.5 per cent.

“In annual terms, house price growth in Calgary has continued to accelerate, reaching a three-year high of 5.8 per cent, as the city recovers from its recent housing downturn,” said Amna Asaf, economist with Capital Economics. “With the months supply of inventory trending lower in the province of Alberta as a whole, we suspect house prices in Calgary will continue to edge higher.”

At the national level, for a second consecutive month, the index was up 2.0 per cent from a year earlier, the smallest 12-month increase since November 2009.

“By way of comparison, the Case-Shiller home price index of 20 U.S. metropolitan markets was up 10.9 per cent from a year earlier in March,” said the report.

In Canada, the price gain over the 12 months ending in May exceeded the cross-country average in seven of the 11 markets surveyed for the national composite index. Besides Calgary and Quebec City, prices were up in Hamilton (5.8 per cent), Winnipeg (4.6 per cent), Edmonton (4.0 per cent), Toronto (3.9 per cent) and Halifax (2.3 per cent). The 12-month increase matched the average in Ottawa-Gatineau (2.0 per cent) and lagged it in Montreal (1.9 per cent). Prices were down from a year earlier in Victoria (4.1 per cent) and Vancouver (3.2 per cent). For Vancouver it was the 10th straight month of 12-month deflation.

© Copyright (c) The Calgary Herald

Calgary region housing starts trend upwards

New home construction picked up in the Calgary region in May.

Canada Mortgage and Housing Corp. reported Monday that total starts in the Calgary census metropolitan area reached 1,078 units during the month, which was an increase from 949 in May 2012.

“The trend of total housing starts increased slightly in May, due to strong construction in both the single-detached and multi-family markets,” said Richard Cho, CMHC’s senior market analyst for Calgary.

Multi-family starts rose to 519 in May from 466 a year ago while the single-detached market saw starts jump to 559 from 483 last year.

Robert Kavcic, senior economist with BMO Capital Markets, said multi-unit housing starts in Canada came storming back in May “after falling precipitously through the winter months.”

“Still, the six-month trend in overall Canadian housing starts sits very close to demographic demand, further hinting at a soft landing,” he said.

Total Canadian housing starts rose by 13.8 per cent in May to 200,178 annualized units, the strongest pace in six months, added Kavcic.

The multi-unit segment rose by 22 per cent.

He said Alberta posted a modest gain, and activity in the province now sits at the highest level in five years.

“With the six-month moving average now more in line with the rate of household formation, May’s sharp jump in the pace of new home construction is unlikely to be sustained,” said Dina Ignjatovic, economist with TD Economics, about the national picture. “Indeed, slower price growth in the housing market could lead to lower homebuilding activity in the coming quarters. Moreover, the overbuilding that has taken place over the last 10 years could lead to new home construction falling below this demographic need for a period of time. This should, however, help to prevent further overbuilding and a consequential sharp correction in the housing market.

“Overall, we expect new home starts to gradually trend down over the next 12-18 months, suggesting that the Canadian economy will not be able to count on residential investment to prop up growth over that timeframe.”

© Copyright (c) The Calgary Herald

Calgary region building permits rise in April – Nearly 13% gain from a year ago

The value of building permits in the Calgary region jumped to $772.7 million in April, according to Statistics Canada.

The federal agency reported Wednesday that permits were up 40.6 per cent from March and increased by 12.9 per cent year-over-year.

The gains in Calgary were driven by higher construction intentions for commercial buildings, added the federal agency.

Across Canada, building permits worth $7 billion were issued in April, up 10.5 per cent from March. The advance in April was the fourth consecutive monthly increase. The recent upswing came after a downward trend in the total value of building permits that began in the fall of 2012, said Statistics Canada.

Construction intentions for residential dwellings rose 21.0 per cent to $4.4 billion. It was the second straight monthly increase and the highest level in 10 months. In the non-residential sector, the value of permits fell 3.6 per cent to $2.6 billion, following two consecutive monthly gains.

In Alberta, total building permits of $1.5 billion were down 12.5 per cent from the previous month but up 10.0 per cent from a year ago.

The residential sector saw building permits of $739.1 million, which represented a decline of 8.8 per cent from March but an increase of 15.4 per cent from April 2012. The non-residential sector in Alberta dropped by 15.9 per cent from March to $733.8 million. However, it was up 5.0 per cent from last year.

Todd Hirsch, senior economist with ATB Financial, said March’s building permit value for the province was a record high at $1.68 billion.

“Residential permits slipped by about $70 million but remain close to the high-water marks set in recent months,” he said. “The moderation in permits since last April is consistent with other residential indicators such as new home prices and housing starts. All three are suggesting the housing market will remain in a healthy balance in the coming months.

“Non-residential permits saw a sharper pull-back in April, but these kinds of building permits are typically more volatile than their housing counterparts. By far the most significant contributor to the drop in April was government and institutional projects, which fell from $514 million to $69 million. Commercial and industrial building permits still posted increases.”

© Copyright (c) The Calgary Herald