Calgary's real estate market has been a rollercoaster ride over the past year, but the latest foreclosure data reveals a startling trend that could spell disaster for homeowners and opportunity for savvy investors. Let's dive into the numbers and uncover what's really happening behind the scenes.

The graph we're examining today tracks Calgary foreclosures from July 2023 to June 2024, showing both active listings and sales. At first glance, it might seem like a jumble of blue and orange bars, but there's a story hidden in this data that demands our attention.

Let's start with the good news: foreclosure sales have generally been on a downward trend since the beginning of 2024. In February, we saw a spike with 27 sales, but that number quickly dropped to 13 in March and has remained relatively low since then. June 2024 shows only 6 foreclosure sales, the lowest point in the entire year.

But here's where things get interesting – and potentially alarming.

While sales have been decreasing, active listings have been on a wild ride. They peaked in November 2023 with a whopping 39 listings, then took a nosedive to just 25 in February 2024. Since then, we've seen a steady climb back up, with June 2024 showing 19 active foreclosure listings.

Now, you might be thinking, "19 listings isn't that bad, right?" Wrong. Here's why this number is setting off alarm bells in the real estate community:

1. The Widening Gap: Notice how the blue bars (active listings) are getting taller while the orange bars (sales) are shrinking? This indicates a growing inventory of foreclosed properties that aren't being absorbed by the market.

2. Seasonal Patterns Disrupted: Typically, we'd expect to see more activity in the spring and summer months. But this graph shows an atypical pattern, suggesting underlying economic factors at play.

3. The Calm Before the Storm: The relatively low number of current listings could be misleading. Banks often hold onto foreclosed properties, releasing them gradually to avoid flooding the market. The steady increase we're seeing could be the beginning of a much larger wave.

4. Economic Indicators: While not shown in this graph, it's crucial to consider broader economic factors. Rising interest rates, inflation, and potential job losses in key sectors could all contribute to a surge in foreclosures in the coming months.

5. The Ripple Effect: As more foreclosures hit the market, overall home values in Calgary could be negatively impacted, potentially pushing more homeowners underwater on their mortgages and creating a vicious cycle.

So, what does this mean for you?

For Current Homeowners:

- If you're struggling with your mortgage, act now. Reach out to your lender about potential modification options.

- Consider selling before a potential market downturn if you're in a precarious financial position.

- Stay informed about local economic trends that could impact your home's value.

For Potential Buyers:

- Keep a close eye on foreclosure listings. There may be opportunities to snag properties at below-market rates.

- Be cautious, though. A flood of foreclosures could drive down overall home values, so think long-term.

- Consider working with a real estate agent who specializes in foreclosures to navigate this tricky market.

For Investors:

- The growing inventory of foreclosures could present lucrative opportunities, especially if you have the capital to renovate and flip properties.

- Research neighborhoods carefully. Some areas may be hit harder than others by this trend.

- Be prepared for potential competition from large investment firms if the foreclosure market heats up significantly.

While it's impossible to predict the future with certainty, the data paints a concerning picture for Calgary's housing market. The key takeaway? Whether you're a homeowner, buyer, or investor, now is the time to stay vigilant and prepared.

Keep a close eye on foreclosure trends in the coming months. If the gap between active listings and sales continues to widen, it could signal the beginning of a major shift in Calgary's real estate landscape. Those who are prepared and informed will be best positioned to weather the storm – or even capitalize on the opportunities it may bring.

Remember, in real estate, as in life, knowledge is power. Stay informed, stay proactive, and you'll be ready for whatever the market throws your way.

Consumer Awareness Guide: Pros and Cons of Buying Calgary Foreclosures

In the bustling real estate scene of Calgary, foreclosed properties frequently appear on the market, often perceived as attractive deals. This guide delves into the advantages and challenges of purchasing these properties, providing a balanced view to aid potential buyers in making informed decisions.

Pros of Buying Calgary Foreclosures

• Price Advantage: Foreclosed homes are typically available at lower prices than comparable properties in the area, offering considerable savings for budget-conscious buyers or investors.

• Potential for Appreciation: Purchasing a foreclosed property at a low price may lead to significant appreciation, especially with market improvements or property upgrades.

• Less Competition: The complexity and risk associated with foreclosures can deter some buyers, resulting in less competition for those willing to navigate the process.

• Opportunity for Rental Income: With strategic renovations, a foreclosed property can be transformed into a lucrative rental unit.

Cons of Buying Calgary Foreclosures

• Property Condition: Foreclosed homes may require extensive repairs due to neglect or vandalism, leading to additional investment in renovations.

• Complex Purchasing Process: The procedure for acquiring a foreclosed property involves more steps than usual, including interactions with banks and navigating legal and court matters.

• Unpredictable Costs: Initial savings may be offset by unexpected expenses such as repairs, unpaid taxes, and liens that can emerge post-purchase.

• Market Volatility: The real estate market’s unpredictability offers no assurances that a foreclosed property’s value will increase.

• Emotional Toll: The nature of a foreclosure, often linked to financial distress, can be emotionally challenging for some buyers.

• Less Room for Negotiation: Negotiations with banks or financial institutions typically offer less flexibility compared to dealings with individual sellers.

Purchasing a foreclosure in Calgary requires careful thought and diligent preparation. It is crucial to consider both the potential benefits and the risks involved. Consulting with a realtor experienced in foreclosures and obtaining legal advice can facilitate a smoother transaction.

While foreclosures might offer unique opportunities for savings and returns, they also come with distinct challenges. It's important for buyers to make well-informed decisions and to always consider their long-term objectives in the real estate market.

FAQs

What are the primary risks associated with buying a foreclosure in Calgary?

The main risks include the property's poor condition, requiring significant investment in repairs, complex purchase procedures, unforeseen costs such as liens and unpaid taxes, and market volatility which may affect property values.

Can buying a foreclosure in Calgary be a good investment?

Buying a foreclosure can be a good investment if managed correctly. It offers potential for significant appreciation and rental income. However, it requires upfront research, careful planning, and consideration of the additional costs and potential risks involved.

What steps should I take before buying a foreclosed property?

Potential buyers should conduct thorough property inspections, review all legal and financial documents, consult with professionals experienced in foreclosures, and fully understand the potential costs and challenges associated with the property.

How one Calgary investor bought foreclosures for a new Airbnb Business

Our client recently bought 6 condos in one building to operate as his new Airbnb Business. This recently retired accountant crunched the numbers into a solid business plan and took action. His idea became his reality. We all have great ideas, and I’m sure you’ll have some outstanding ones today. Maybe even while you are reading this article. But few of us take action. Many of us tell others about our great ideas in the hope that they will take action and then share the success with us because it was our idea. Good luck with that!

The two main points of this article are that you have to take action yourself, and there are opportunities in Real Estate to create a business for yourself.

Our client bought 6 condos in the same building, and only a few were actual foreclosures. The other condo deals came about from our due diligence on his behalf, leading us to other motivated sellers. He now owns several similar units at the same address. And only has One Condo Board and One Condo Management Company to deal with. And a single set of Condo Documents. One set of Bylaws, One Reserve Fund Study, One Reserve Fund Budget, One Monthly Board Meeting, One Annual Board Meeting, and other unforeseen issues that may pop up from time to time.

He also gets to streamline all other costs to improve and manage his portfolio of condos at a single address. All by taking that first step after the idea popped into his head.

What’s the worst thing that could happen, and could he deal with it? That question should be at the top of everybody’s list when evaluating a great idea. The worst thing that could happen in the case of any business is to have no income for whatever reason. No income is only a problem if you have debt. No Income, No Debt, No Problem. It’s not likely you would lose 100% of the revenue potential. A solid written business plan will tell you your Break-Even point based on debt service, operating expenses and income. Once you have a Break-Even calculation, you will know when your business starts to lose money. So, the worst that could happen is you start losing money. How much could you lose, for how long and could you deal with it? Making sure you have an excellent downside cushion helps you sleep at night. On the other hand, if you have no down-side cushion, your motivation to get it right becomes very focused.

We have many clients that go into business for themselves with Real Estate in Calgary. And they all started with the first one, and the first one could be any type of property that generates income.

They took action on their idea. They focused on their goals and ignored the jealous and envious dream stealers. Taking action is taking a leap of faith in yourself. Don’t let yourself or anybody else hold you back. Get your Great Ideas down on paper, crunch the numbers, find your break-even point and decide if you can deal with the worst that can happen.

Opportunity is knocking; answer the door! We can help you!

Three important things to know when buying a foreclosure in “As Is” condition from the banks or the courts are:

• Buyers take all the risk

• Lenders typically won’t finance “As Is” properties

• “As Is” Includes Nothing.

Buyers take all the risk in exchange for a discount on the price.

That would be the basic premise of buying a foreclosure. The seller is, in most cases, the bank or the courts. The foreclosure sellers have not lived in the property. They have limited knowledge about the property, so they use “As Is” to offset the lack of information a traditional seller would have an offer to the buyer. It’s up to the buyer to use all their own resources to mitigate the risk. The most valuable resource for buyers of Alberta Foreclosures is an experienced real estate agent like Jerry Charlton.

Lenders Do Not Like to Mortgage “As Is” Purchases.

Mortgage lenders have two risks they lend against. One is you, the buyer, and the other is the property they get as security. Banks like to take almost zero risk in exchange for low mortgage interest rates. It’s not impossible to finance foreclosures, but it is for most people. Courts will not consider any Offers To Purchase a Foreclosure with conditions like financing or home inspection. Banks are a bit more flexible about conditions. The rule of thumb with foreclosed properties is Cash Is King. Whoever makes the best Cash Offer usually gets the property. This is where a great mortgage agent with access to many different lenders, including the traditional banks, can help you. Renting money is easy!

“As Is” Includes Nothing.

When you buy a home, you usually add into the contract the Stove, Fridge, Dishwasher, Washer, Dryer, Window Coverings, etc.  Not so with foreclosures. Again, the sellers have minimal knowledge about the property, let alone the appliances. Therefore, the sellers of foreclosed properties do not include anything in the sale. What this means to a buyer is if there is a stove, fridge, etc., in the property on the day of the “As Is” possession, then the buyer gets to keep them. If the property is vacant, the appliances usually remain. If the property is occupied, the story could have a different ending.

A real estate agent like Jerry Charlton is the most essential resource a foreclosure buyer can have. He has helped buyers and investors purchase foreclosures for almost 20 years.

Where To Find Alberta Foreclosures For Sale

In the coming months, a lot of people will be searching for Alberta Foreclosures for sale. Banks are raising interest rates on mortgages. Inflation is out of control. The stupid Russian invasion of a free country is wreaking havoc around the world. Oil prices are going through the roof. A recession is on the way and will be sending a lot of people back to the home rental market.

So where does the smart money go in good times and bad? Real Estate that's where, just ask Warren Buffet, Bill Gates, or Jeff Bezos. Billionaires love Real Estate. You can even become a Nut Case President of The USA with the help of Real Estate!

Anyways back to Where Do You Find Alberta Foreclosures For Sale? Right here on my website, we feature all the foreclosures for sale today. New listings get added daily. We can also send you the new listings as they happen which moves you to the front of the line. Quickly evaluate the new foreclosure listings from the comfort of your email box.

Searching and Finding Foreclosures For Sale is just the first step in the process of buying and owning foreclosures.

We are here to help you whenever you are ready. Just call, email, or even text us.