Calgary Real Estate Newsletters - January 2007

Market Predictions for 2007...

by Joe Samson, Calgary Realtor

Alot of the people I had spoken with recently are asking the same question, “What is the market going to produce this year”?

T o get to the point, I project another strong year for the Calgary market. I expect the average market appreciation to be around 18%-20%. The first couple of months of the year may be somewhat quiet, however I anticipate on the spring market to be more active. Based on the City of Calgary’s predictions, they are expecting another 25,000 people to move to Calgary from other provinces in 2007. This will cause higher demand for real estate and as a spin off we can expect housing prices continue to rise.

For those readers who happen to be Landlords, this will be another exiting year due to a constraint of available rental properties. Currently there is less than 1% vacancy rate and it is just expected to tighten up even more.

This will create a tremendous ability to raise the rental prices along with the enjoyment of equity appreciation in your investment property.

Those readers, who are more skeptical about the performance of the Calgary Real Estate market, I don’t blame you. However, I have the confidence to stand in front of you and sound somewhat provocative to tell you that a housing bubble in Calgary just isn’t going to happen because we have the perfect economical environment to cultivate real estate growth in Calgary and throughout most of Alberta.

As some of you may know, in addition to helping people to buy and sell their houses, I also invest in real estate and try to assist as many people as possible to create financial independence through acquiring real estate.

I believe that real estate is one of the few types of investment vehicles that is safe and brings high yielding returns compared to many other investment opportunities.

Most people are aware of the common type of investment opportunities like the stock market, mutual funds, GIC, savings account etc. You could invest $100 you will earn $10 if the investment goes up in value 10%. The only problem with the above scenario is that you are missing out on the power of leverage that real estate can provide, meaning that in the above example you are getting your returns 1:1. In real estate, if you buy a house for $400,000 you would only need to invest $100,000 under most circumstances and the bank will put up the rest of the $300,000. This is called the power of leverage, your return is 4:1. In reality if a house increases in value 6.5% (being really conservative for today’s market) that means that you will be earning returns on the bank’s money as well. On a $400,000 house a 6.5% increase would generate $26,000 profit each year. Your return on investment would be $26,000/$100,000 = 26% per year. Do the math if the market would increase 18%-20% this year. I am sure that you would be okay with 80%. Wouldn’t you?

All the information and possibilities you need to grab on to your future are at your fingertips. Let’s make 2007 an outstanding year because everything done in the past is the result of what you have today and everything that you do today will be the result of your future.

I trust that his information was useful and helped you to stay informed. I will continue to provide you with the most up to date information about our real estate market and our economy.

Thank you for your continuous support, feel free to call me anytime with your questions or real estate needs.

Your Best Friend in Real Estate,
Joe Samson
Real Estate Professional

P.S. – If you had found the above information useful and believe that someone else might find it beneficial, the greatest compliment I can receive from you is to send this link to them and to keep me in your thoughts when someone mentions real estate to you. Thank you.