Calgary Real Estate Foreclosures.
Over the past several weeks several of my investor clients have contacted me to discuss the opportunity of buying a foreclosed property inCalgary.
Are foreclosures up in the Calgary market? Certainly, they appear to be up by about 30% but the number of foreclosures is still very small! To put it in prespective there are currently 56 foreclosures in Calgary on the market and over 5000 active listings.
Personally I have received several requests from investors asking about investing in foreclosures. That means that there are likely an additional 5000 realtors in Calgary receiving the same requests. So we have probably over 5000 investors eyeballing 56 properties inCalgary. The supply doesn't support the demand and we are not seeing big discounts on foreclosures yet in the city. The average home price in Calgary is selling around 95% of asking price; foreclosures included. There are one-offs selling at 10-20% below asking but these listings are few and far between and really depend on the financial situation of the seller.
Bank owned homes are still owned by the bank, banks are not desperate. They have not recently lost their job, they don't really care if the home sells or not. It is not like TV where foreclosures are purchased in the USA for pennies or drastic discounts. Banks are listing foreclosures for market value and if they are not getting close to asking price, only then are they reducing the price.
I suspect that as time goes on and we see more foreclosures on the market that we will begin see more deals. I don't think we are there yet and I doubt it will be like the markets in the USA. Canada has must stricter lending rules and the number of foreclosures will not flood the market. Remember there are only 56 foreclosures and over 5000 active listings.
Can you get a deal with foreclosures? Yes, but I would not go into the negotiation process expecting one. Be happy if you get a deal but be prepared for the bank to say no and stick close to their asking price. As an investor you are not emotionally attached to the properties anyway so this should making walking away easy. Keep looking and hopefully you will find one in time.
Here is an additional article by CBC also discussing similar metrics of foreclosures in the Calgary Real Estate market.
Are you thinking about investing in the Calgary Real Estate market? I'd love to help! Contact me at any time.