From tiny homes to laneway dwellings, Canadians are embracing an increasing range of unique and unusual abodes. But whatever you choose to call “home,” chances are a team of insurance professionals have been working on coverage specially designed to underwrite you.
Tiny homes are increasingly common, especially in urban areas where housing costs have skyrocketed, says Stefan Tirschler, CIP, product and underwriting manager, Square One Insurance Services Inc.
“In the beginning, tiny homes were lived in by a small community of people experimenting with a new way of living,” he says. “Today, we’ve seen zoning changes across the country, and that’s resulted in a wide range of small dwellings on the market. This includes anything from miniature frame homes, portable frame homes on wheels, tiny homes built from shipping containers, laneway homes—even yurt-style homes.”
Tirschler notes that underwriting for tiny homes tends to build on safety standards for existing homes or materials used in the structure.
“For example, a shipping container home is likely to be similar in coverage to a standard home once it’s been delivered,” he says.
Smaller prefabricated or manufactured homes have also become more common. A manufactured home is typically delivered to the site on a chassis, lifted off and mounted onto a foundation. A slight variation, a park model home, remains on the chassis, but can be lived in as a permanent residence.
“The question we ask ourselves as underwriters is, where do these homes fit and to what standard do they need to be built?” says Michael Hewett, senior product manager, leisure and lifestyle, with Aviva Canada Inc. “The Canadian Standards Association, for example, offers standards for manufactured homes and park model homes. We also look to these same standards as a basis to underwrite tiny homes that are built in a similar manner.”
He notes, however, that owners of manufactured homes should seek an appropriate amount of coverage for additional living expenses.
“A manufactured home may have lower value, but it could take up to year to order a new home from a manufacturer,” Hewett says. “We allow customers living in these homes to buy additional coverage for living expenses.”
Homes designated as heritage buildings also offer unique challenges for underwriters, says Jackie Murison, FCIP, CRM, ICP, portfolio and innovation specialist with The Commonwell.
“The policy must take into consideration when the home was built, whether someone of cultural or historical importance lived in it, or any unique building materials that must be used in a rebuild,” she says. “You couldn’t replace plaster walls with drywall or stained glass with regular glass. The homeowner won’t have a choice on that. Properly valuing those rebuilds can be a big challenge.”
She notes that the Town Hall in Lindsay, Ont., is a heritage building that happens to be two feet out of alignment because the builder shifted the surveyor’s pegs.
“If there was an insured loss, that same alignment would have to be considered,” she says.
High-value homes also require custom coverage, says Anthea McFarland, CIP, senior vice-president, personal insurance at HUB International.
“In many cases, we’re talking about homes with an average value of up to $1,000 per square foot, reflecting such building materials as the most valuable marble and granite finishes,” she says. “We send out specialist appraisers to these homes to come up with a number that covers exactly how much it would cost to replace the custom detail in these homes.”
Often, Canadian owners of high-value homes also own properties in the U.S., the Bahamas or the UK, and brokers such as HUB International work with a global network of insurers to cover all of the dwellings under a single policy.
“High-net-worth insurers also offer a range of additional policy coverage,” says McFarland. “These can cover anything from appliance failure and maintenance, kidnap or ransom insurance, and even cyberbullying insurance, to cover the services of a therapist for child victims. Some clients also request standalone insurance policies to cover specialized art collections, including van Goghs and Warhols. As a broker for this client group, we endeavour to be a one-stop shop.”
Canada’s housing market continues to evolve in fresh new ways.
“Technology continues to reduce the distance between customer and underwriter,” says Tirschler. “We’re much better positioned to take notice of customer needs and expectations and adapt and respond to them much more quickly – wherever and however they choose to live.”
This article was created by Content Works, Postmedia’s commercial content division, on behalf of the Insurance Institute of Canada.
The Killarney project is easing regulations to allow for off-site prefabrication, and the builder believes it will be the first of many homes like it
In a backyard in the southwest community of Killarney, three shipping containers are being positioned above a two-car garage to create 480 square feet of living space for Chad Saunders and his wife, Jennifer Head. The finished residence will be the first laneway shipping-container home in Calgary.
Jeremy Johnson, founder of the Calgary-based builder responsible, Modern Huts, believes it will be the first of many.
“Since the containers were put in position a couple of weeks ago, we’ve had a lot of inquiries on costs and timescales,” Mr. Johnson says. “Killarney is a community which is pretty open to density and innovation and people are interested and excited to see something like this come to Calgary.”
“Most container companies are building laneway homes fully modular and then moving the completed units into position, which is a very efficient and economical way to build, but we’re having to site-build for this project because of the city’s inspection process. They want to see all the processes as the build unfolds,” he says.
This has meant Mr. Johnson and his team will be on site for approximately three months, rather than the five days which would be required were they permitted to complete the build off-site.
Since starting the project, Mr. Johnson says this particular inspection process has been revised and the city will allow container homes to be built fully prefabricated in future.
“Until now, you could use modular building techniques but the city was sticky on anything that was fully prefabbed and delivered, even with modular homes,” he says. “Laneway – and specifically container homes – are still very new to Calgary so the city has been pretty cautious, but we’re seeing that change now, which is good news.”
Despite the challenges, Mr. Johnson says the build, which is his company’s third container home, is going well. He expects the entire one-bedroom suite, including the two-car garage underneath, to come in around $130,000.
“The cost to build will be similar to a stick-frame build but it will be quicker, even without building off-site, more durable and will result in a far more energy efficient building. The R-values we’re reaching are really high and we’re hopeful of achieving Passive [House] standards someday,” he says. (Passive House is a standard for ultralow energy efficiency.)
“The exterior of the suite is being left largely as metal, so will require virtually no maintenance, and we’re also generating a lot less garbage,” Mr. Johnson says. “We have eight bags of garbage on site right now and drywall starts this week. With a stick build, at the same stage, we’d have a full bin of waste leaving the site already.”
Upon completion in March, Mr. Saunders and Ms. Head will move into the container suite with their eight-year-old son while Mr. Johnson renovates their 1950 bungalow. Mr. Saunders has owned the property on the corner of 32nd St. and 26thAve. S.W. for 19 years. He bought it as a starter home but, as the years passed, he and his wife started talking about paying off the mortgage and renovating, rather than moving.
“When we started to approach builders about doing a renovation, most of them said we’d be better to knock the house down and built from scratch, but we really weren’t interested in building a monster house,” he says. “When Jeremy suggested we include the old garage in the reno, that’s when we started to think about putting in a suite. We’ve always liked the idea of shipping-container homes – what they stand for from an environmental perspective and also how they look.”
The couple have no firm long-term plans for their garage-top property yet but Mr. Saunders, who works in the arts, says they could end up letting it out to an artist in residence.
“If we find the perfect renter, then great, but we’re also considering options with organizations like Alberta Ballet which need temporary accommodation for artists from time to time. We think that could be a really fun and interesting way to use the space,” he says. “We actually hope to engage a local artist to create a mural on the side of the container which faces into the yard when it’s finished, too.”
Mr. Saunders also sees long-term value in having a second residence on the family property.
“We know from relatives how expensive care facilities can be and how challenging that is for seniors. We figure that maybe in 30 years, if our family needs a caregiver, someone could move into that house. It doesn’t hurt to think ahead and have options,” he says. “We’d rather diversify the land we have now than build a huge house that we’ll struggle to take care of in the future.”
Mr. Johnson says caregiving is one of the main motivators for clients inquiring with his company about laneway homes.
“When we finish this project, we move onto another shipping container laneway home in Silver Springs. It’ll be a four-container suite providing 640 square feet of living space and two bedrooms for a daughter and her son who are moving back onto the family property to provide care to her parents,” he says. “Silver Springs is a neighbourhood where you find a lot of retirees and we’ve had other inquiries for the same kind of project from that community.”
Other projects planned for summer include a laneway office for a client in Mount Royal and a solar-powered, hydroponic greenhouse for a client in Briar Hill who’s interested in year-round growing. Both would be fashioned from a single shipping container.
Mr. Johnson says in time he’s like to start to prefabricate shipping container suites and have them shipped across Canada. But, for now, he’s focusing on the local market in Calgary where laneway homes are becoming more common and, he says, there’s “virtually no competition for small-scale, backyard shipping-container projects.”
Over the last two days we have talked about your Realtors networks and Passive vs. Active Marketing but there are a few things that you should know about listing your home that will set you up for success when you are ready to put your house on the market!
- Neat and Tidy
We know that you love your home, and you might have kids and kids can be messy, or maybe you have pets and sometimes pets smell. Realtors have homes, with all of these same things, I promise we don’t all live in pristine real estate marvels, in fact if you walk into my house I can promise you will be tripped by a hockey stick or a dog toy, BUT I cannot emphasize this enough, your home needs to be spotless for photos and for showings. it sucks, we all know this, it is hard to keep your home in show home shape, but it will not sell if it isn’t. Try and have it “show home” clean when you have your Realtor interview so that they can get a clear picture of what your home looks like on its best day!
2. Listen to your Lister
You are obviously going to have a conversation with your Realtor about the listing price of your home. Realtors have tools that they use to identify what your home should be listed at, these tools (called CMA, which we will talk about in a later post) combined with a savvy understanding of the current market conditions your Realtor can usually pin point pretty close what your home should be listed at and ultimately what it should sell for. One fatal flaw in home owners is that they don’t listen to this number, typically because they think their house is worth more. Some Realtors will push back because of knowledge and expertise, some will take the listing at a higher price tag, simply to get your listing… when this happens you can find yourself in a vortex of price dropping and haggling with offers when and if they come in. If your home is priced right (not too high or too low) it will sell. Don’t be afraid to ask questions about list price, but ultimately if your Realtor has stats to back the price point… take their advice.
3. Clear the Clutter
This is your home, of course you would have personal touches, nik naks and frames. maybe some crazy feature walls, or novelty rooster collections. We know you love these items, we do too. BUT potential buyers don’t. Most people when viewing a home cannot look past the esthetic and see true potential of their own items in a home, in fact they have the same problem with empty spaces. This is why a staged home will always sell faster 10/10 times. You can start this by packing up any personalized items and clutter. particularly toys, and collections, photos and other chachkeys that can be distracting for the potential buyer. Think of it as a head start on packing for your move out!
4. Be flexible and realistic
Thinking about upcoming showings can be overwhelming and daunting, but showings are good, they are the pass that takes you right to the touchdown, showings is where your offer will come from. The worst part; showings aren’t typically a 9:00-5:00 job. Now, this is still your home, you call the shots. It is really important that you are as flexible and realistic when setting schedules with your agent. If you have a 2 year old, maybe any showings after 7:00pm aren’t acceptable, maybe you need 24 hours notice before a showing, these are normal requests and completely acceptable! it is your home after all. Set clear expectations with your agent, but be mindful that if they call you and someone wants to see your house in the next 3 hours and you say no… that could have been the person who wanted to buy it.
5. Be patient, and communicate
If you have questions about your listing, the market, the last showing… the weather you need to know that you should be asking! Your agent should be keeping you informed about your listing, but if you’re not getting what you need, call them! Some agents even have review software that will generate feedback immediately following a showing, really good agents follow up with the buyers agent to try and close a deal, or at the very least find out why they didn’t choose your home, and the Great agents bring in their own buyers… from that network we talked about!
How important is marketing in Real Estate you ask? In short… it is incredibly important, in fact it can mean the difference between a sale and you sitting frustrated on your property for months, it can also be the difference in your listing becoming stale in the market because it sits for too long with little to no exposure.
I like to think that every Realtor has their own tips and tricks that they use to generate business, employ smart marketing techniques and do the very best for their client. The truth is, at the end of the day it breaks down to two types of agents. Active and Passive Marketers.
- Passive Marketing
Every Realtor does this, and some pawn it off as highly effective marketing tools, but at the end of the day they are waiting for the business to find them. Waiting for the buyer to call. Passive marketing is listing the home on MLS, putting it on a website, (that may or may not generate google ad words). There is nothing wrong with passive marketing, and every Realtor should do it because there is always the online buyer who shops around and can and will find you on MLS, but it isn’t exceeding expectations and it isn’t going above and beyond.
- Active Marketing
Active marketing is when the rubber meets the road. We talked in my previous post about Networksand this has a lot to do with that. Active marketing is when your Agent is actively searching the market for a buyer for your home. They can do this through their network, through lead capture services that they can deploy through various social media channels, and their website. Your Realtor should create a brand for your home. Does your Realtor use a professional photographer? are they a professional photographer? do they do home staging? what do they charge for home staging? All of these tools tie together and make your home sale something extra special, not just another MLS number on the proverbial YYC Real Estate shelf. Now, marketing costs money! The right kind of marketing costs lots of money! This is why you hire a Realtor, so you don’t have to navigate this alone. Always make sure to ask what the price tag is attached to any marketing plan when you are discussing commissions, offering photos and home staging is great, but ensure you know what that will cost you in the end. We will talk about where your money is going in a later post!
Kevin D’Costa Fun Fact! Did you know that I am an accredited staging professional RE. Did you also know that I offer this service to all of my clients? The best part, you rarely have to run out and buy thousands of dollars worth of furniture, usually just some minor esthetic and décor items are enough!
The point I am trying to make is this; When you’re interviewing a Realtor do not be afraid to ask them what exactly they are going to do for you? how are they going to market your home? Now that you know if you get the “I have a great webpage and I will list it on MLS” are the wrong answers, you can ask for more. expect more!
I have always received these questions, periodically, but lately it seems like almost daily I am asked “how do I choose the right realtor to sell my home”. I have always been an advocate of interviewing agents and ensuring that you have the right fit for you. You should never choose a Realtor without knowing and understanding how they are going to work for you! I am writing a part mini series that will include some insider tips on what to look for in a Realtor and very specific things to ask while you’re interviewing. Choosing someone to sell your home is a very important choice, I want to make sure you know what to look for!
A Realtors network is like a golden ticket. Most might think “The bigger the team and the fancier the website the quicker the sale” This isn’t necessarily true. Your realtor should have a network of potential buyers, sellers, Realtors, Mortgage professionals, lenders and brokers that work as a team to get the job done. Ask your Realtor about his or her professional network, you very well could be interviewing a Realtor that has a client just waiting to put an offer in on your home, they were simply waiting for that special something to come along. Real Estate professionals can’t work in silos, the biggest key to success in Real Estate is to have a respected group of people who you connect with regularly.
I recently did a study on first time home buyers in Alberta. 23% of those who responded said that they were not in the market to buy a home. The top reasons being 1. down payment and 2. Mortgage approval. As the study continued it became glaringly obvious that for MOST of this 23% home ownership was actually attainable, they simply were not educated or up to date on what options are available to them. My point here is this; Take **John and Susie for example. Looking for their dream home which is a 1200sq ft. front attached garage home in Windsong. They believed they would never qualify so they were waiting and saving… waiting… and saving. I had the opportunity to list a 1300sqft home in Windsong that would be PERFECT for this growing family. You guessed right… Because I have a trusted network of professionals we had their down payment sorted out, had them Mortgaged (with a pretty great rate to boot) and into this home. Their Mortgage payment is less than they were paying in rent and they OWN it! All of this they originally thought was unattainable. Now, This is a stellar example because Bob and Betty were able to sell their home before it even hit MLS for 24 hours and John and Susie were home owners, but not unrealistic with the right opportunity and the right network of Real Estate wizards working together! Every thing is impossible if you don’t try! Your Realtor should always try! with everything they have got! So when you’re interviewing, ask them this; “What does your professional network look like, and how are you going to step up to the plate for me?”
** Names and communities changed for privacy
Calgary has become an attractive place for commercial real estate investment for Toronto-based Allied Properties REIT.
In fact, the bulk of the company’s Canadian acquisitions in 2013 took place in the city and its president and chief executive says Allied foresees continued growth in its Calgary portfolio.
“The consolidation in Calgary has been very successful for us,” said Michael Emory, president and chief executive of Allied, who was in Calgary this week. “We wouldn’t have expected going in, to be honest, that we’d be able to put together such a good concentration of properties so quickly. But we have. It’s gone very well. We like the market . . . We’ve really been pleased with what we’ve been able to accumulate here.”
Allied’s first acquisition in Calgary was the downtown Lougheed Building in the second half of 2010. Today, it owns 19 properties in Calgary with 915,834 square feet of rentable area. In January, it announced the acquisition of two additional properties which are scheduled to close later this month, increasing the number of properties to 21 and the rentable area to just over one million square feet.
“Basically what Allied does is acquires office property that is either in or very close to the core. That’s number one. Number two, has very distinctive internal and external attributes. And third, is available to our tenants at lower overall occupancy costs. It’s anywhere from 35 per cent to 50 per cent lower than the cost in the conventional office towers,” said Emory.
“If we look at 2013, the bulk of our growth was actually in Calgary and so far this year we’ve announced three acquisitions, two of them are in Calgary. We’ve announced about $90 million in acquisitions and about $60 million are here . . . Our coming here has given the owners of these kinds of assets the opportunity to achieve liquidity and they’ve taken advantage of it. I hope to see continued growth . . . and we’re very keen on the Calgary market.”
A couple of Allied’s downtown Calgary properties are undergoing transformation. The Art Central building, which was acquired in 2011, is set for demolition to begin in July to make room for an office and residential skyscraper.
Fashion Central, which was also bought in 2011, could have its name changed after the concept of several retailers under a fashion theme – by the previous owner – has not worked out.
Fashion Central has 27,183 square feet of rentable area, 18,408 square feet of which is used by retail tenants and 8,775 square feet by office tenants. There are six retail tenants on the main/street level and five retail tenants on the lower level.
“It really wasn’t working well on the second level for retail users. There wasn’t enough traffic prepared to go up to a second level in order to give the retailers the volume of activity they needed,” said Emory. “What we have done is we took the retailers who were up there, who wanted to stay in the building, down to the main level and the level below. Then we basically made from the second floor up office space and it’s a very high-end, high-calibre office environment.”
The change in focus for the building has Emory contemplating a change in the building’s name. A possibility is to call it the Alberta Block, which is the historic name of the building, but Emory said the REIT is in discussions with tenants on their input.
“If the retail tenants think it’s important to continue to name the building Fashion Central, we will,” he said. “If it’s a matter of indifference to the tentants then we’d prefer to change it to the Alberta Block . . . It’s a bit of a misnomer. It isn’t Fashion Central. There are other parts of downtown that might legitimately call themselves Fashion Central. This building can’t really carry the name to be very honest.”
Susan Thompson, business development manager of real estate for Calgary Economic Development, said the older-type buildings typical of Allied Properties portfolio provide tenants with a “funky character space that some smaller creative businesses like.”
“Obviously that’s going to attract a certain type of company,” said Thompson. “They’ll love that price point. And they’ll love the look and the feel of that space.”
A high level of demand will continue to lift housing starts, MLS sales and average house prices this year in the Calgary region, according to a report released Thursday by Canada Mortgage and Housing Corp.
The agency’s first quarter 2014 Housing Market Outlook said housing starts in the Calgary census metropolitan area will reach 14,100 units in 2014 before declining to 13,500 in 2015. They were at 12,584 last year.
The report said a record level of migration in 2013 will help lift MLS sales from 29,954 in 2013 to 31,300 units in 2014 and to 32,100 in 2015 and the high level of demand is expected to be met by more supply which will help lift the average price from $437,036 in 2013 to $449,000 in 2014 and to $460,000 in 2015.
“Calgary has experienced a large inflows of people and employers are projected to continue to expand their payrolls. This will be an active year for the Calgary real estate market,” said Lai Sing Louie, the CMHC’s regional economist for the Prairie and Territories Region in Calgary.
The level of MLS sales is below but approaching the record of about 33,000 transactions in 2006.
“Tight conditions in the resale market will have some buyers looking to the new home market to meet their needs this year. By 2015, it is expected that supply levels in the new home market and a wider selection of listings in the resale market will help moderate new construction activity.”
CMHC is forecasting the rental vacancy rate in the Calgary region to climb from 1.0 per cent in 2013 to 1.2 per cent this year and to 1.5 per cent in 2015. It also forecasts the average rent for a two-bedroom apartment to rise from $1,224 in 2013 to $1,280 this year and to $1,320 next year.
“Calgary’s housing market is one of the strongest in the country, and is expected to remain so for the foreseeable future,” said Ben Brunnen, an economic consultant in Calgary. “The increased demand for housing is being driven by strong fundamentals such as robust population growth, low vacancy rates, high rents, and growing wages. These underlying conditions provide confidence that the price and sales growth we’re seeing right now are economically sustainable.
“Looking ahead, with the low Canadian dollar and stronger housing demand in the U.S., watch for price appreciations in the cost of new housing, which could put increased pressure on Calgary’s housing market.”
The Calgary and Alberta housing markets will be buoyed in the coming years by strong net migration numbers. CMHC estimates net migration to the province in 2013 will be 103,000 people followed by forecasts of 71,000 in 2014 and 63,000 in 2015.
In Alberta, after reaching 18,431 units in 2013, single-detached starts are projected to increase to 19,100 in 2014 and remain near this level at 18,800 in 2015. After increasing to 17,580 units in 2013, multi-family starts in Alberta are projected to rise further to 18,000 units in 2014 and then moderate to 17,600 units in 2015, said the CMHC.
In the resale market, MLS sales are projected to rise from 66,080 units in 2013 in Alberta to 68,500 in 2014 and to 70,100 in 2015. The average MLS price in the province will increase from $380,969 in 2013 to $391,100 in 2014, and then rise to $401,000 in 2015.
Calgary is ranked fifth overall in North America for the number of highrises and skyscrapers currently under construction.
A ranking compiled by Emporis, an international provider of building data, said Toronto is North America’s highrise boomtown with 130 projects on the go.
The report, released Tuesday, said New York City was second at 91, followed by Montreal (25), Vancouver (23) and Calgary (22).
One aspect common to all the cities in the ranking with the exception of Houston, said Emporis, is the majority of the highrises under construction are residential buildings.
It said New York remains the city with the most completed highrises in North America with 6,069.
Emporis said the ranking consists of highrises, defined as multi-storey buildings of at least 35 metres in height or of 12 to 39 floors if the height is not known. Highrises of 100 metres or more, or that have at least 40 storeys, are considered skyscrapers.
© Copyright (c) The Calgary Herald
The Airdrie housing market had a very strong year in 2013 with pricing returning to the peak levels of 2007.
Now looking to 2014 the Calgary housing market is expected to continue growing, which should push Airdrie housing prices up further as well.
As homes get less affordable in Calgary, buyers will look for less expensive options and head out to the smaller centers.
With our location and with so many amenities, Airdrie is often many buyer’s No. 1 choice as their place to call home. To put some perspective to the affordability, we’ll look at benchmark pricing (benchmark means the typical home).
For a look at what is considered typical please see our blog dated Jan. 6 at airdrieliving.ca
Through the third quarter of 2013 the typical home in Calgary was selling for $470,600 while in Airdrie the typical home sold for $365,900 for a difference of almost $105,000. However, in Airdrie we all know that two storeys are king and what builders will continue to build.
So it certainly makes sense to look at benchmark pricing for the typical two-storey home as well.
The typical two- storey home in Calgary sold for $508,400 and in Airdrie sold for $402,200 for a difference of more than $106,000.
With these kind of savings on the largest investment most people will ever make, it is easy to see why so many buyers are willing to move out of the city and why Airdrie continues to grow by 11 people a day, with half of them coming from Calgary.
To add to rising prices, in 2014 the Calgary real estate board is predicting an increase of 4.3 percent for the city of Calgary with the first half of the year being stronger than the second half.
This along with interest rates expected to climb slightly, Airdrie’s affordability will remain high compared to Calgary, which should also continue driving prices up here.
Another key factor for the Airdrie market will be housing starts.
If starts increase, this will help alleviate some of the pressure on resale homes.
However, if starts remain around the same then we will continue to see a low number of available homes on the market, which again could push prices up even further.
While I wish I had a working crystal ball and could tell you exactly what’s going to happen, that is just not the case. We live in a world of ever changing factors and in Alberta we are of course dependent on oil.
If oil goes up then housing prices will probably go up, if they go down then pricing will likely all relative. If you sell when prices are high chances are you will buy when prices are high.
Same goes when the market is low. So when people ask me, ‘when is it the best time to list my house?’ my answer is always ‘when you want to sell because you never know when the right buyer for your house is out there looking and if you are not on the market they will not find you.’
So regardless of pricing make the decision based on your needs.
So the good news is all factors are leading towards a strong 2014.