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Is it cheaper to build?

Mon, 16 May by Kevin Grenier
The answer is vague but true “it depends, providing the numbers work”.
This is definitely a possibility. The UofA area has zoning restrictions in place to keep things in check otherwise the trend is to create higher density homes close to the UofA. In-fills, in other words, tearing down an old home in a mature area can work as either a single family executive home or a multi-family duplex/4-plex depending on a number of factors.
This has been a trend in Vancouver for years as the price of real estate climbed beyond the average home owner’s grasp, suites became more and more popular as a “mortgage helper”.
If you get the land for a good price, build it yourself or use a dependable well-priced builder and sell the SF home for 6-700k or the fourplex for 700-850k there can be some profit in that. Of course prices vary widely depending on the area.
As for any blanket statement that says it is always cheaper to build I would say that would be inaccurate and a misleading statement.

To answer this question better for yourself, you need to know what it is going to cost for you to build or for you to hire someone to build. Usually this figure is a cost/sq’ and depends on the finishings you use, high, mid-grade or low end finishings.

You also need to know what you can reasonably expect to sell the property for once completed & how long you might expect to “hold” it until it sells.

If it is an investment property like a duplex/tri-plex you’ll need to know average market rents.

For example, the lot that just came up for sale on 106st & 61 Ave for $525k is a duplex/tri-plex lot. If the plan for a tri-plex allows for 800 sq’ / unit that would be a total of 2400sq’ above grade. At say $125/sq’ to build it would cost you $300k for the building. Lot & building 800k. For someone to buy this they’d have to expect to at least break even and at 800k they’d need to rent out each unit for about $1700/month. Is that possible? It depends, if they are a walk up townhouse with a garage that wouldn’t be totally unrealistic. But where is the profit for the initial buyer?

So it really is a numbers game. The key is to know your numbers and keep your eye open for something that works within your ability, time frame and tolerance level.
The deals are out there for those who are well prepared in advance.

I hope that helps.

Kevin
My client Helen asked:

Hi, Kevin,

This is Helen. I just have one question for you: I just see a big two storey house was built recently in front of my apartment. There was a smaller house in this place, which was moved away. Do you think this is a tendency for future real estate market, and do you think that to build a house is way cheaper and better than buying a house? Please provide some data to make a comparison.

Thanks,
Helen

Home Staging? You Can Now Choose The Service that Fits Your Needs & Budget

Sat, 07 May by Kevin Grenier

Great News for sellers looking to prepare their home for sale and get the most out it.

Home stagers often offer two levels of service, an initial consultation with some direction as to how to stage your home on your own or a full service staging with or without rented furnishings.

Now the stagers I’ve teamed up with offer a number of services from do it yourself courses on staging,

or a package that includes do it yourself preparation combined with pro stagers coming to your house to finish things off,

of couse full staging “hands off” service,

a furnishings rental program to maximize on the emotional impact the buyer will have when entering the home and also training programs for other staging professionals.

For more information or to book your staging consultation post a comment below. Also clients of mine can take advantage of the free staging initial consultation that I offer.

I look forward to reading your comments and helping you in any way I can net more in your pocket.

 

Kevin Grenier

“The Informed Home Buyer/Seller” Take the Personality Out of Your Home

Sat, 07 May by Kevin Grenier

Market Update from the Realtor’s Assocation of Edmonton – May 3rd, 2011

Tue, 03 May by Kevin Grenier

The following is the monthly press release from the Realtor’s Association of Edmonton in its entirety. If you have any questions on this or would like further detailed statistics, information or analysis, contact me at www.kevingrenier.com

Local Housing Market well-balanced: able to meet reasonable expectations

Edmonton, May 3, 2011: According to the REALTORS® Association of Edmonton, the average price of housing remained relatively stable through April as compared to the previous month. The all-residential average price decreased $310 to $327,415; down from $327,725 in March. Single family home prices decreased $425 while condo prices rose $1,305 (0.6%) during the month. Despite the activity the market is balanced without a distinct advantage for either buyer or seller.

“Prices and sales usually increase in the second quarter and REALTORS® are busy serving new and repeat customers,” explained REALTORS® Association of Edmonton President Chris Mooney. “The increase in new listings means that there is a good selection of homes to choose from. However, the market is still price sensitive and sellers will have to have a realistic pricing strategy if they are expecting a quick sale.”

Residential sales were 1,487 down 7.8%; compared to 1,613 in March. Residential listing activity rose from 2,958 units in March to 3,278 units in April. Inventory of homes on the Multiple Listing Service® increased from 6,885 last month to 7,215 as of April 30.

The average* price of a single family detached home in April was $379,075 with a median price of $357,000. Condo average price was $234,220 with a median of $220,000. Duplex and rowhouse prices rose on average from $294,585 to $300,906, a 2.1% increase. All prices reflected sales across the entire Edmonton region including surrounding communities and counties.

“There is a lot of activity in the local market and the situation changes every day and from neighbourhood to neighbourhood,” said Mooney. “Only your REALTOR® has access to the most up-to-date sales activity and sold prices. He or she is prepared to work closely with you to locate your next dream home or sell the property that no longer meets your lifestyle needs.”

The average days-on-market in April was 49 days. The residential sales-to-listing ratio was 45% in April and total MLS® System sales were over $1.822 billion for the year so far.

– 30 –

Highlights of MLS® System activity

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* Average prices indicate market trends only. They do not reflect actual changes for a particular property, which may vary from house to house and area to area. Prior period figures have been adjusted to include late reported sales and cancellations and therefore reflect a more accurate view of the period than previously reported at month end.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.