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Everything you need to know about Edmonton Real Estate

In today's edition of "Everything You Need To Know About Edmonton Real Estate" we have a candid discussion with David Edmiston of Pacestter homes about how this Covid-19 virus has affected the new home industry and what our thought are about the market going forward.

Serge Bourgoin:

Hey, everybody. Welcome to Everything About Edmonton Real Estate. This is our very first episode. Today, I'm honored to have David Edmiston from Pacesetter Homes joining us today. David comes from real estate royalty. I started working in real estate in 1985 and I started working with his father and I met David since he was 12 years old. David has had real estate in his blood since he was born. David, welcome.

David Edmiston:

Thank you for having me today, Serge. It's my pleasure to come on board your show and talk about the things that I know about. That's predominantly new homes and the Edmonton new home market. What would you like to do to get started?

Serge Bourgoin:

Well, first of all, why don't you tell us a bit about Pacesetter? Because maybe a lot of our viewers today aren't familiar with Pacesetter Homes.

David Edmiston:

Well, that's a really interesting topic. I can speak quite a bit about it. I actually started my career early on with Qualico group of companies, that's the parent company of Pacesetter. Then I left them and sold used real estate and new homes for other companies over a period of time and I came back to them about 10 years ago. They're actually the largest and oldest land development and home-building company in all of Western Canada and they're a family-owned company. They started in 1951 in Winnipeg, Manitoba. It's a wonderful company. I've been with them for the past decade and they are Edmonton's number one home builder and they have been for over five years.

Serge Bourgoin:

When you say they're the "number one home builder," in what category? Is it number of units sold? Number of homes built? What?

David Edmiston:

I guess I always look at that type of metric and I think of the volume as being the most important vote in the marketplace. We think about the most popular car or the most popular restaurant. Well, it's probably the most popular because it represents the best mix of value, price, features, service. Pacesetter Homes is the number one home builder in the city of Edmonton by volume and has been for over five years.

Serge Bourgoin:

Mm-hmm (affirmative). Tell us about how this COVID-19 situation has changed how you're doing business.

David Edmiston:

It's changed it dramatically, Serge. We're doing a lot more work via video conferencing, although we are still open in the show homes, but we're taking extra measures. Surfaces and doorknobs are being wiped down between clients. We're only allowing one client in the showroom at a time. One family comes in, they come into a clean, sanitized environment, they're safe in that environment, and they spend that time with us. When they finish, we allow the next person to come in. It's actually working really well. If anything, it provides a higher level of customer service because they have more one-on-one.

David Edmiston:

I'm noticing that show home traffic, well, had been down. It's actually picking up now. It's been really busy over the last two weeks. In terms of how it's changed how we do business, we're having to do so much more via remote access. Sales are still bustling. We actually finalized 17 sales just last week. We had one of our best weeks in this year, actually, just last week.

Serge Bourgoin:

I totally agree. I've noticed an uptick in the number of people going out looking at homes at this time. I mean, I was out with different buyers last week. I sold two homes over in-

David Edmiston:

Good for you.

Serge Bourgoin:

... Then I'm off again after this showing another buyer another home, so there's still buyers out there. Of course, as you mentioned, we have to take different precautions, like wearing gloves, masks, having sanitizing wipes and, of course, hand sanitizer. Real estate is still happening. We got to just keep that in mind. Just because of COVID-19 virus is here does not mean that the world comes to an end.

David Edmiston:

You're absolutely right.

Serge Bourgoin:

Have you noticed that builders are now offering discounted prices during this time to make it a great buying opportunity just to entice people to come out and have a look at their homes?

David Edmiston:

That's a great question. I think every home builder in the city of Edmonton has probably responded to the marketplace. Pacesetter adjusted some of their pricing on certain products at the beginning of the year just because of the existing market conditions being a little bit softer than maybe we'd seen in years past.

David Edmiston:

When COVID hit us, we offered additional discounts and promotions. We actually have the best pricing we've had in probably close to a decade. We've got phenomenal arrangements with most developers where they're actually helping to reduce the overall cost as well.

David Edmiston:

Just as a sideline, I had a client reach out to me and he said, "I'm waiting until prices drop," and I said, "Well, you might want to come in and have a conversation with me." He came in and he ended up buying a house from me because what he figured out is that prices had dropped and selection is still abundant and he didn't want to wait until there was nothing left.

Serge Bourgoin:

Right. Well, I mean, that's particularly true, of course, with new home builders because one of the restrictions that you have that limits you is the number of lots that are available. At this point, you have a certain number of laws that are available to you and eventually those are going to be sold and then all of a sudden, it'll take time for to the developers to open up their subdivisions and add new lots on the market and right now, I think they're sitting on the sidelines waiting to see.

David Edmiston:

Yeah, I think you're actually right on the money on that. I mean, we're starting to see people come back into the marketplace. I wonder if that's a precursor to a flood of buyers that we would normally see in the spring market?

Serge Bourgoin:

Well, it's an interesting point that you bring up because I know that I've experienced this and talking to people is I get a lot of people tell me, "Serge, either they don't want to go out at the moment because of the COVID virus. They just want to wait until the pandemic is over." I have others that are telling me, "Serge, I'm going to sit by the sideline cause I think this is going to put downward pressure on valuations and homes are going to be cheaper."

Serge Bourgoin:

That is possible, without a doubt that that's possible, however, one of the things that I concerned about for those people is that what's happening is now, we're creating a pent-up demand that's just... They're not buying it. But that number of people that are waiting is growing and growing and growing and-

David Edmiston:

We've seen this before.

Serge Bourgoin:

... I've seen it before, exactly. As soon as things get better, all of a sudden, they rush into the market thinking, "Okay, now we've bottomed out," but usually by that point, things are already going back up again because all of a sudden, you're going to have this huge flood of people coming on the market. Now, you're going to have an excess number of buyers in relation to the inventory available. Law of supply and demand says if I have more demand than I have supply, then prices go up. That's a great possibility that that could happen. There's an old saying in real estate and it's not trying to time the market, it's time in the market that's important.

David Edmiston:

Indeed.

Serge Bourgoin:

The sooner you get in there and buy, as long as you can get a good deal, you negotiate a great deal, right, at this time, which right now, people are negotiating and you can negotiate a great deal now. Then now you can be in that home and you can start making your payments and therefore, you're acquiring equity sooner and you're going to have that mortgage paid off sooner. I'm not a big fan of trying to time the market because usually by the time people figured it out, "Oh, we've peaked," or, "We're at the bottom," it's actually too late. They've missed it, right?

David Edmiston:

I guess for me, I agree with you a hundred percent. I had a financial analyst one time talk to me about real estate and investing and he said, "If you ever have buyers that are sitting on the fence," he said, "Something to remind them is 'Waiting to buy a house is kind of like waiting to save for retirement.'" It gives you less time to build up in that marketplace. It was a really viable point and it makes a lot sense with what you just said there.

Serge Bourgoin:

Exactly. As you know, I was a financial advisor and a stockbroker for 10 years in my previous life and we would see people trying to time the market and those are the people always got slopped.

David Edmiston:

Yes, a hundred percent.

Serge Bourgoin:

They always were getting caught and they were getting into late, getting into early. It's impossible to do. There's people that have better track records than others, but it's impossible to do consistently. Time in the market is much more important than timing the market.

Serge Bourgoin:

Now, David, we were talking about how you guys had discounted pricing and offering great promotions at this time. There are other things that could, of course, help buyers acquire home in this market and at this time. One of the things is the flex down program. Can you tell us a bit about that program?

David Edmiston:

Yeah, it's a wildly popular program, Serge. It's actually designed to allow buyers that have not yet saved up their down payment an opportunity into homeownership. I mean, I've helped hundreds if not thousands of buyers over the span of my career to purchase homes using programs just like that one where even if they haven't saved up their entire down payment, they can use other strategies in order to buy the home now.

Serge Bourgoin:

Mm-hmm (affirmative). With the flex down, it's possible, if you have good credit rating and you have the income to support it, to get up to a hundred percent financing, correct?

David Edmiston:

100% accurate.

Serge Bourgoin:

Yeah. Now, of course, the government's come out with a program to help first-time home buyers. It's called the "First-Time Home Buyer Incentive Program." Are you finding that a lot of your first-time buyers are taking advantage of that program?

David Edmiston:

Serge, honestly, every single buyer who is able to qualify for the program is taking it. The government is giving 10% of the value of the home and it's effectively a 25-year interest-free loan. I mean, when you buy a house and you put 5% down and the government puts 10% down, you've got a 15% down payment on your home, your payments are reduced dramatically.

Serge Bourgoin:

Mm-hmm (affirmative). Of course. Of course, you just mentioned that 10%. Now, 10% from the government, that's only for new homes. If they want an advantage of this first-time home buyer program and they're buying a resale home, of course, they're only going to get 5% for those purchases.

David Edmiston:

Correct.

Serge Bourgoin:

Now, you have another program that is a little different than the flex down, but also can help with down payment and that's the cashback program.

David Edmiston:

We do. We work with a couple of different lenders to provide a cashback program. Again, I've had hundreds if not thousands people take advantage of cashback programs over the years. Probably the most common use for them is to pay out debts, people who've already saved up their down payment to buy a house and maybe they don't want to have zero in their bank account or maybe they don't want to move into the new home and still be carrying a car loan or a credit card debt. The bank is there for them and they provide that cash back and in that moment they're able to wipe out all of that debt. In fact, I have countless homeowners that have moved into their homes with me and actually experienced a lower overall monthly cost because of the restructuring that we've done and utilizing the cash back. It's incredible.

Serge Bourgoin:

Mm-hmm (affirmative). Okay. Now, could you tell us about maybe some of the better programs you have available and maybe some of what you think are some of your best deals that you have going on right now?

David Edmiston:

Yeah, absolutely. I actually made a couple notes. I'm just going to reference my notes here. Not sure if you're aware, but certainly for your audience, this home builder actually builds in 34 different locations in Edmonton and surrounding area. That's actually more than any other home builder. We are the largest, so we have the most selection.

David Edmiston:

We also have the best value. I've got homes without condo fees starting from $550 biweekly. Those will actually have a two-car garage, a yard. I've got double attached garage houses starting from $644 biweekly and I've got luxury homes and walkout basement homes starting from $704 biweekly. Truly a once-in-a-lifetime opportunity to enter the marketplace with a very, very affordable monthly overall cost.

Serge Bourgoin:

Wow. Based on the numbers you're telling me, in a lot of cases, they can get onto a brand new home that they actually own, start earning equity for lower than they're paying rent right now.

David Edmiston:

It's incredible. We're helping people every day because of that.

Serge Bourgoin:

Mm-hmm (affirmative). Okay. Now, as you mentioned before, your show home is open to the public, but of course, you're restricting one couple in at a time, one group in at a time. What are your hours of operation at the show home?

David Edmiston:

Well, we're open from 3:00 until 8:00 PM Monday through Thursday and then on the weekends, we're open from noon until 5:00. We do encourage clients to reach out to us in advance and book an appointment so that we have that time set aside for them, but we are open for business.

Serge Bourgoin:

Okay. Now, we talked a little bit about what the market is doing now and what might happen. I mean, what are your thoughts? I mean, what have you experienced and what do you think we're going to be seeing going forward?

David Edmiston:

That's a really great question. I've been asked that question a lot. I've been in the industry for almost three decades now and you know, I suppose that when the market is really high and really hot, I know that in a very short period of time, it would likely soften. I know that when the market is really soft in a relatively short period of time, it'll usually firm up and go up. I've seen that over my career. I mean, when I started selling new homes in the city of Edmonton, you could buy a brand new home for under a hundred thousand dollars and we've watched those numbers steadily rise throughout my career.

David Edmiston:

I guess if it were me in the marketplace today, I'd be looking to try and secure something that I really wanted to live in. I think that because of the COVID outbreak and the soft Alberta economy, it's creating a once-in-a-lifetime buying opportunity for home buyers. I think that they can have more today relative to their income than they've ever been able to buy and in most cases, they can buy it with little or no down payment and potentially, even have money left over at the end to pay off bills.

Serge Bourgoin:

Right. I tend to agree with you. I mean, real estate is always in a cycle. There's always a period of tremendous growth and then we peak and then we have a recession and evaluations drop again. It's just an ebb and flow, but the overall trend is always upwards. It's always been going upwards. I mean, when I started real estate, you could buy a single-family home from roughly about $50,000 in some cases. Those homes are now selling for four to six times what those prices were back then.

David Edmiston:

Incredible.

Serge Bourgoin:

That's what happens over a longer period of time. Yeah, right now I think is a great buying opportunity. Valuations have come down and the builders are offering great programs at the moment, right? Promotions, great discounts. If you're able to get yourself into those positions now, we know that this market is going to bottom out and it's going to come back up again and the people who take advantage of it now are the people that are going to benefit. It's like the old saying in investment, the golden rule: "Buy low, sell high." We know that right now we are in a low portion of the cycle and now's a perfect opportunity to buy.

Serge Bourgoin:

Always keep in mind that real estate is a longterm investment, right? Don't expect to buy now and sell it two, three years from now and expect guaranteed that you're going to have growth and equity, not necessarily. If you hold it for the long term, we know that real estate values over the long term have always gone up. Make that investment. Make an investment in yourself, your future, the future of your family by getting into that home at a great time, at a great price, which is now.

David Edmiston:

I think that's absolutely incredible advice, Serge. I hope that the people who are able to tune into this program are able to take that information to heart. I can't help but wonder how many people will wait thinking that a better time is coming around the corner only to miss this once-in-a-lifetime buying opportunity where prices and interest rates are at all-time or multi-year lows and the guidelines for purchasing a home have never been easier. Then throw into that the fact that the government will actually contribute 10% of the value of your home, once-in-a-lifetime opportunity.

Serge Bourgoin:

Mm-hmm (affirmative). Well, wonderful. David, do you have any last thoughts that you want to share with everybody before we wrap it up?

David Edmiston:

Well, I did have a couple of questions for you, Serge.

Serge Bourgoin:

Sure, go ahead.

David Edmiston:

I guess what I was wondering was, if you were a home buyer today, what would you do in this marketplace?

Serge Bourgoin:

Well, right now, I would definitely be looking to buy it. I mean, as we've talked about over the last few minutes, this is a buying opportunity. The market is down and with the interest rates being at all-time lows, I can't remember the last time I saw interest rates on mortgages as low as they are today, you got low interest rates, you got great values out there, you've got builders offering great promotions and discounts. This is the time to buy.

David Edmiston:

I agree a hundred percent. I showed a client a house last night, it's a nearly 1700-square-foot walkout home near a pond in Southwest Edmonton across the street from a ravine for $410,000. As we looked at the property, we remarked upon the fact that it's never been this price before. As we talk about this house in this video, I wonder if we look at this video five years from now, how much that house will actually be?

Serge Bourgoin:

That would be really interesting to do. We can always tell by looking at history what happens. History has taught us that after things go down, they go up, so I'm not too worried about that. Now's the opportunity and the people who capitalize on opportunities are always people who benefit.

David Edmiston:

It's the truth. Thank you very much for having me on the show. Can you think of anything else that you wanted to talk about on my end?

Serge Bourgoin:

No. I want to thank you very much for being with us today and sharing and telling a little bit about Pacesetter and what's happening in the new home market. If anyone is thinking about buying a new home, you can either contact me and I'll introduce you to David or you can always reach David at Pacesetter. What location are you at at the moment?

David Edmiston:

My offices are in Desrochers. It's a community in South Edmonton. It's a hospital and LRT community that has schools and shopping. Most of the areas that we build in, we've handpicked our areas to build in so that we have the highest level of amenities as per other areas that are near that area. That allows clients to buy something that meets their needs in the moment that they buy and then in the time going forward from that moment and then also provides them with a high level of resale value. That's probably one of the things that this company is most known for.

Serge Bourgoin:

Right. David is, say, probably one of the most experienced new home representative out there that can definitely help you make sure that your transaction goes smoothly and you have a great home, but even know that he's based out of Edmonton, David has the ability to sell any of those 34... Is it 34 locations?

David Edmiston:

34 locations.

Serge Bourgoin:

34 locations across the greater Edmonton area. It doesn't really matter where you wanted to go to, where you want to build, what do you want to do is you want to talk to David. David, again, thank you very much.

David Edmiston:

Thank you, Serge.

Serge Bourgoin:

I'll let you get back to work. I know you're going to be opening up the show home here in a few moments, so I'll let you go. Take care, everybody. Stay safe, stay healthy.

David Edmiston:

Have a great day, everybody.

 

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