BuyingFinancialMarket Updates April 23, 2021

The Current Price of Lumber & Its Effect on the Real Estate Market

The coronavirus pandemic has caused problems with supply in just about every industry, not just lumber. Last summer, we saw a shortage in everything recreational, from ATVs to RV’s, batteries, and patio cushions. The computer industry is still trying to meet the demand of new home office and gaming PC needs, and doesn’t show signs of stopping. And if you’ve been considering any home renovations or woodworking project, you’re likely no stranger to the skyrocketing prices of lumber due to the higher demand. But how has this shortage of lumber affected home prices?

Home Improvements Leading to Short Supply of Lumber

When the COVID-19 pandemic hit, forced lockdowns resulted in closed lumber mills. Then those in lockdown started making improvements to their houses and backyards, as they looked forward to a summer stuck at home. Decks and fences were being built in record numbers as people renovated to accommodate their new work-from-home/stay-at-home lifestyles, swiftly leaving lumber mills in short supply and scrambling to catch up, leading to an increase in prices.

If you’re considering a backyard facelift this spring or summer, you can expect to pay as much as double pre-pandemic lumber pricing. And if you need to contract your work out, there again, you’ll likely pay even more, as contractors are straining to keep up with workloads.

The Shift to a Seller’s Market

If you’ve been paying attention to the real estate market in Saskatoon, you’ve no doubt noticed the shift to a seller’s market. The shortage of homes for sale has caused desperation in buyers who need to buy for many reasons. Perhaps they just sold their home to take advantage of rising prices. Or maybe low interest rates took them from being unable to afford a home to desperate to find one before their locked-in rates expire.

Whatever the reason, REALTORS®, like myself, are seeing more and more bidding wars and offering scenarios where the sellers have the upper hand. Buyers are offering at or above asking prices, causing prices to increase in every market across Canada, including Saskatoon.

The Cost of Lumber & Rising Home Prices

So how, you ask, does the cost of lumber indirectly affect rising home prices? Before COVID-19 hit, 1,000 board feet of 2’ x 4′ lengths cost approximately $550. As it stands now, that same amount costs more than $1,400. Now, take a typical 2,500 sq ft home, add in those rising lumber prices, and you are adding as much as $30K to the cost of building a new house!

Now, let’s consider a homebuyer weighing their options to build new or buy an existing home. With a new build home costing approximately $30,000 more now than it did before the COVID-19 pandemic, many are deciding to forgo building new and begin looking for an existing home for sale instead.

As we are in a seller’s market, there are not many available homes, especially in the most popular price ranges. But let’s say that they do manage to find one they would like to purchase. The scarcity of inventory right now has buyers right changing offer prices. There is no time to offer low and see what the counteroffer might be. In this market, the house will likely be sold to another buyer quite quickly. So they don’t take any chances and offer at or above asking, which is likely still a better deal than the new build they were considering.

From what we thought was a simple, short-term inventory issue to now a national crisi of rising real estate costs, this is how lumber prices affect the current home prices. So what can you do to best protect yourself as a buyer? Well, especially in a seller’s market, it is crucial to work with a local real estate professional who understands what is happening in today’s market—and that’s where I can help. Contact me today and let’s get your journey of buying a house off on the right foot today!

BuyingFinancial March 23, 2021

How to Know You’re Not Paying Too Much When Offering on a House

For most people, buying a house is the single largest purchase they’ll ever make.  Wanting to ensure you get a good deal is only natural. But how can you really know? It’s not like you can ask the seller how much the other buyer is offering, and in a seller’s market there are likely to be multiple offers and competing bids.

Having said that, you still don’t want to overpay just because the market is hot. Of course, the price is not the only determining factor in deciding whether a home is a good purchase—location and condition are also integral factors. With that said, as your REALTOR®, I have many tools I use to help you ensure you get the best deal possible.

Comparables

When you show interest in a property, and before we even discuss a price to offer, I will take into account all the recently sold, currently listed, and unsold properties that are comparable to the one we are looking at. I analyze homes that are similar in size, location, and amenities they offer, but also some others that are different. Is it considerably less expensive than a larger, nicer house? Is it more expensive than smaller, less attractive properties?

With my deep understanding of current market conditions and market history, we can work together to determine a maximum price you will be happy with and that I am confident will not be high for market values.

Neighbourhood Impact

I also use my extensive neighbourhood knowledge taking into account expected occurrences that will impact the values of homes in any specific community. Is there positive development planned, such as a major mall or a large new company moving into the area? In this case, the appreciation value of your home in the near to distant future looks good. However, if grocery stores and gas stations are closing down, the price should reflect that and the appreciation value of the home will likely be affected.

One thing to note is that new housing development can go either way. It can mean that the area is hot and likely to be in high demand in the future, thus increasing home values. Or it can result in a surplus of housing, which will lower the value of homes in the area.

Professional Experience

Without even analyzing the data, a professional REALTOR®, like myself, who is very familiar with the area and the market will intuitively know whether a property is priced appropriately or not and what a fair offering price would be. You can’t really replace this intuition—it simply comes with years of experience.

 

Once you have an accepted offer, we will take further steps to ensure you are getting a good deal. Requiring a home inspector will ensure there are no surprises and that no expensive repairs are necessary.  We will also check permit history to ensure all previous work done to the property was permitted and passed inspections.

The lender will also request a property appraisal to protect their financial interests. The lender wants to make sure they are making a wise investment. At this point, you can reevaluate the offer price and if necessary negotiate the sale price before closing.

Lifestyle June 11, 2020

7 Things Everyone With a Home Needs to Know

One of the best things about buying a home is no longer waiting on a landlord to fix any issues that may come up in your living space. On the other hand, one of the worst things about owning a home is that any issues that do arise on your property are entirely your responsibility. That’s why, when you become a homeowner, one of the most important things you need to do is familiarize yourself with the most common tasks you may need to complete should an issue ever arise. Here are some of the top contenders:

1) How to Shut Off Your Water

Water damage can be one of the most costly repairs you may encounter as a homeowner. And knowing how to stop it before it gets out of hand may just be the difference between a few minutes with the mop and a full-on wall dissection.

While it may sound like a labour-intensive job to shut off all the water in your house, it is actually just as simple as twisting just one knob, known as your main water valve. True, you can find several valves throughout your plumbing system that are able to control individual areas of your home separately. But when emergency strikes, you’ll value the time saved just cutting it all off, rather than trying to find the right one.

If you live in the city of Saskatoon, or have city water fed to your home, your main water valve should be in your basement just near your water heater. If your home runs on well water, you’ll usually find yours near your water storage tank.

2) All About Furnace Filters

Furnace filters are what clean the air in your home, filtering out particles before feeding the air back to you, and they typically need to be changed every couple of months—sooner if you’ve been doing renovations! Because you’ll never know quite when they’ll need to be replaced each time, it’s always a good idea to have a few extras on-hand just in case.

Not all furnaces are created equal, and the same can be said for their filters, too. Not only do they vary in size, but also in efficiency, as well. Other than your size, you’ll want to know your MERV (minimum efficiency reporting value), which can range from 1-16. Of course, you’ll also want to know just how to change the filter, so take a moment to find the little removable panel, and be aware that removing it may be different than the one you had in your last home.

3) How to Clean Your Drain Traps

If you’ve ever checked “under the hood” of your sinks, you’ve probably seen that bit of u-shaped plumbing right underneath and you may have even wondered what that would be for. Known as a drain trap, it is a little pocket in the plumbing that holds just a little bit of water to help block gas and vapours from escaping into your home. But, while it is intended to hold water, it can also hold basically anything you pour down your drain, too, and it may need a good cleaning every once in a while to keep the pipes flowing smoothly.

Before donning your rubber gloves and getting to work, it’s always a good idea to put that main water shut off valve to use to prevent any accidents. Then, you’ll just want to place a bucket underneath, unscrew the clamps, and remove to give it a good clean.

4) Inspect Your Window & Door Seals

Over time, it’s totally normal for the seals around your windows and doors to deteriorate, and the earlier you can catch it, the more time and money you’ll save in repairs and heating costs. Every year, take some time to have a close look around your windows and doors, and keep an eye out for any cracks that may appear, sealing them quickly when you find them.

5) How to Clean Your Gutters

Every fall, we enjoy the beautiful change of scenery as the leaves change colour and fall to the ground. But the trouble is, not all of those leaves make it to the ground. In fact, quite a few of them often end up in our gutters, leading to clogs and clutter that can cause hefty water damages if left unchecked. In the spring and the fall, make time to pop up on the ladder to free up any dams that may have been forming along the gutters.

6) Resetting Ground Fault Interrupters

You may have noticed that the outlets in your kitchen and bathrooms are a little different than the rest of your house. Those little buttons in the centre aren’t just for decoration, though. Those are a very important safety feature known as ground fault interrupters, typically found on outlets that are more in danger of being exposed to water.

In the event of a power surge in your house, these interrupters automatically cut the power to these outlets to prevent a devastating accident, and when you need to get things back up and running, they will need to be reset to turn back on again once it is safe. All you need to do is look for the little button in the middle. If it is popped out, simply pop it back in again, and get back to blowdrying your hair or mixing that cookie dough!

7) Labeling Your Electrical Panel

Most of us have probably dealt with a breaker that needs to be flipped, and usually know where to go to find it. But if you’ve ever had to do that with an unlabeled panel, then you’ll know the hassle of either running up and down the stairs to check if it worked or enlisting the help of a friend or family member to call out to you.

Rather than waiting for a breaker to blow, then flipping through all the breakers at that time, take a moment when you move in to carefully label each switch. While it may take you a little while to figure out which switch is which, knowing the differences will not only save you time in an emergency later on, but it can also save time for an electrician, should you ever need their help in your home, too!

 

Owning a home can be a wonderful venture, especially as a first time home buyer, but if you’re not sure how to handle a little regular maintenance, it can also be quite a headache. By taking care of these essential homeowner tasks, though, you’ll be better equipped to handle the little things as they come, saving yourself both time and money moving forward!