Calgary Home Club Report - December 9th

Calgary’s housing market expected to weather storm

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Global economic uncertainty weighed heavily on residential real estate activity in most major Canadian centres during the latter half of 2008 and although the forecast for 2009 promises more of the same, most markets are expected to weather the storm, says real estate firm Re/Max.

In its Housing Market Outlook for 2009 report released today, Re/Max said MLS sales in Calgary will drop by 30 per cent this year to 22,500 units compared with 32,176 sales in 2007, but the firm forecasts a rise of two per cent in sales for 2009 to 23,000 units.

Re/Max also said that the average MLS sale price in Calgary for 2008 will be one per cent lower than 2007, dropping from $414,066 to $410,000. It also forecasts no change in the average sale price for 2009.

Nationally, 440,000 homes are expected to change hands in 2008, down 15 per cent from record 2007 levels. Canadian housing values are expected to be about $300,000, a three per cent decline from a year ago. By year-end 2009, Re/Max said unit sales should match 2008 levels while the average price is forecast to fall another two per cent to $293,000.

In Calgary, the report said stock market volatility and the threat of a global economic recession deflated consumer confidence in the fall. The slide in sales is expected to continue.

"Fluctuations in oil and gas prices have been cause for concern in Alberta," said the Re/Max report, adding the province is starting to see some pull-back on energy projects.

"That said, Calgary is better positioned to weather the storm ahead than most other major centres in Canada. The city has one of the strongest unemployment markets in the country, with an unemployment rate of 3.7 per cent. The city’s economy grew at an estimated rate of 3.2 per cent in 2008 and is expected to exceed the national average in 2009. Net migration is also forecast to improve in 2009 with an estimated 18,500 interprovincial migrants moving to Calgary. The influx should serve to bolster demand for real estate in the city."

The report said housing stock will continue to be a drag on Calgary’s residential real estate market for the first six months of 2009, but conditions should start to improve by mid year as the market makes its way through excess inventory.

"Buyer’s market conditions are expected to prevail during the first half of the year, with home sales under $400,000 most active. More than 50 per cent of activity will occur under this price point as first-time buyers move to realize homeownership," said the report.

"Trade-up activity will also strengthen as buyers take advantage of the narrowing spread between what their homes will sell for and what they can buy. The top-end of the market, while slower than last year, is forecast to experience solid demand as a result of in-migration and corporate relocations. More balanced market conditions should exist for single-family homes by Fall, 2009."

"Calgary’s high-rise condominium market, propped-up by speculation in recent years, is more vulnerable to new market realities. Thousands of new units are expected to come on-stream in 2009, which could create a glut of listings. Some developers have already moved to mitigate their losses by stopping new projects."

Source - Financial Post - http://www.financialpost.com/story.html?id=1026094

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Calgary Home Club Report - November 26th

Shallow Slide For Real Estate

A growing body of forecasts lean towards the downside of the real estate cycle being shallow rather than steep.

The latest assessment from Scotiabank Economics predicts price corrections in the 10- to 15-per-cent range from peak to trough nationally, though Vancouver and B.C. markets - where prices soared highest - will see more significant drops.

And the reason, according to Scotiabank senior economist Adrienne Warren, is that Canada’s markets are into a cyclical decline driven by unaffordable prices pushing too many buyers out of the market, and now a softening economy.

She added that it is different from the American decline, which was driven by a glut of home foreclosures on the market due to sub-prime mortgage failures, followed by the U.S. economy falling into recession.

"I don’t think we have the kind of risks that initially drove down the U.S. housing market," Warren said in an interview, "so I don’t think [Canada] is going to mirror what has happened there."

Warren’s assessment, in her Real Estate Trends report released Thursday, follows from forecasts by the Canada Mortgage and Housing Corp., B.C. Real Estate Association and Central 1 Credit Union, which forecast B.C. prices to fall between nine and 18 per cent before bouncing back.

Warren added that while nationally, prices will likely decline in the range of five per cent next year, B.C. market declines will be more like 10 per cent, so overall "will be a little more than 15 per cent [to the bottom]."

High inventories of unsold homes in B.C., she added, are one of the risks in that could push prices lower, as well as in the Saskatchewan markets.

Warren said prices will likely remain flat for a number of years while the affordability of housing "reaches a point that people can get back into the market."

The Scotiabank forecast is based on the assumption that B.C. and Canada will follow its current economic course. Warren said Scotiabank’s economics department believes the country is entering or already in a mild recession.

However, she added that there are "almost daily" reports that downgrade projections for global growth, and if the biggest risk to her own forecast it would be a more significant economic downturn.

The Scotiabank report noted that Vancouver had the highest average housing prices in the country at $592,658, compared with Calgary with the next highest at $402,267.

Warren said those prices are averaged over 10 months, though. Vancouver’s average price peaked in February at over $630,000, and by October had fallen to almost $552,000.

However, on balance, home-price appreciation in Canada has been less than in a number of major developed nations over what has been a 10-year housing boom. However, it did outpace the U.S., where prices rose 50 per cent compared to 61 per cent in Canada over that time period.

The run-ups in Ireland, Britain, Spain, France and Australia all exceeded 100 per cent.

However, the driving forces behind the price appreciation as well as current supply and credit conditions are more important than just the run-up in prices, the Scotiabank report said.

And the Scotiabank report noted that with sales, prices and residential construction in 2008 running below their peaks, "Canada’s longest housing boom of the post-war period has come to an end."

Source - Canwest News - http://www.canada.com/vancouversun/news/business/story.html?id=04e6af73-92ea-4e08-b362-dd063dacf669

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Calgary Home Club Report - November 12th

Value of a REALTOR®

Whether selling your home, or looking for a new one, the over 5,700 REALTORS® in Calgary and the surrounding area work together to help you! This REALTOR® network allows them to share information and resources that places you in the best position possible to secure the biggest financial investment most people experience in their lifetime.

Who is a REALTOR®?

Not all licensed or registered brokers and salespeople are REALTORS®. Only real estate licensees who are members of the Canadian Real Estate Association (CREA) are REALTORS®. These REALTORS® are committed to a high standard of professional conduct, ongoing education, and to a strict Code of Ethics and Standards of Business Practice (113KB PDF). Using the service of a professional REALTOR® helps in disclosing maximum property information and facts therefore reducing your risk.

Your Benefit

Teaming up with a REALTOR® provides you with invaluable access to professional real estate expertise and knowledge. You benefit because:

* Your REALTOR® can help determine your buying power and refer you to lenders best qualified to maximize your loan and minimize your cost.
* Your REALTOR® has full access to all the features of the Multiple Listing Service®, Canada’s most powerful real estate marketing network.
* Your REALTOR® provides local community information on utilities, zoning, schools, etc. REALTORS® assist you in making the best choice selecting an environment where you and your family can grow.
* Your REALTOR® has a finger on the pulse of the housing market and is knowledgeable about developments and trends in real estate; and,
* Your REALTOR® has the facts on comparable pricing, neighborhood trends and housing market conditions, data you can use to set your best course of action and maximize your homes resale value when you are ready to sell.
* Your REALTOR® can negotiate the best deal. There are myriad negotiating factors, including price, financing, terms, date of possession and often the inclusion or exclusion of repairs, furnishings or equipment. By negotiation alone, your REALTOR® often saves you more than the cost of their service.
* Your REALTOR® assists you in providing due diligence to evaluate the property. This may include inspections for mold, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in determining what conditions to recommend and assist in finding qualified professionals to investigate and provide report to you.
* Your REALTOR® can guide you through the sales process making sure everything flows smoothly from initial offer to closing.
* Your REALTOR® markets your property to other real estate agents and the public. Often REALTORS® will provide guidance on staging or repairs that enhance the salability of your property. Your REALTOR® will harness the power of the Multiple Listing Service to expose your property to a large network of qualified buyers as well as coordinate marketing through the most effective array of other advertising media. Only CREB® REALTORS® have access to the marketing exposure of industry publications such as Calgary Real Estate News, and Home to Home Magazine.

You are protected when you work with a REALTOR® for a number of reasons:

* All REALTORS® are graduates of a real estate education program and are committed to pursuing ongoing professional development courses;
* REALTORS® must adhere to a strict Code of Ethics and Standards of Business Practice (113KB PDF); your guarantee of professional conduct and service excellence.
* All REALTORS® carry errors and omissions insurance;
* The Real Estate Assurance Fund is available to you in the rare event of fraud, or breach of trust by a REALTOR®. It is your protection against financial loss. This fund is financially supported by our members; and,
* A licensed brokerage supervises the business conduct of all REALTORS® to ensure their compliance with Alberta law.

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Calgary Home Club Report - November 11th

Housing Starts Are Down For October

It looks like it’s going to be a few more months before house construction activity picks up.

The fortunes of builders in Calgary rests in the hands of buyers, who need to gobble up some of the surplus on the market before we start to hear more saws and hammers.

According to Canada Mortgage and Housing, starts in our city are down almost 14 percent, with the October numbers showing a drop of almost 55 percent alone.

Lai Singh Louie with Canada Mortgage and Housing says the stampede of new people to Calgary is over and those who are thinking about buying are waiting for prices to fall even further.

As for when real estate transactions are expected to pick up, Louie believes that will happen next Spring.

Source - 660News Calgary - http://www.660news.com/news/local/article.jsp?content=20081110_184557_11848 

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Calgary Home Club Report - October 28th

House price drop may be exaggerated, TD says

The drop in Canadian home prices in September may not be as severe as it seemed, TD Securities said on Wednesday, bolstering the case that the country is not headed for a U.S.-style housing meltdown.

TD, a unit of Toronto-Dominion Bank , argued in a report that home prices fell 1.3 percent in major Canadian markets in September, not the dramatic 6.2 percent drop that was reported by the Canadian Real Estate Association (CREA) last week.

CREA said the average house price fell to C$315,461 (about $252,000), dragged down by sales declines in Vancouver and Victoria, British Columbia, which offset rebounds in Calgary and Edmonton, Alberta. CREA said the fall came despite year-over-year gains in average home prices in 17 of 25 major Canadian markets.

TD crunched its own numbers and applied a weighting to each major city to fix "compositional shifts", which it said were behind the distorted CREA view. It said the association has acknowledged the problem.

For example, if Vancouver was the only city that reported sales in one month, and the next month Montreal was the only city that reported, then it might seem that prices had fallen in half because Montreal prices are much less expensive than those in Vancouver.

TD fixed the weight of each city to year-earlier sales levels as of September 2007.

"We wanted to get rid of the whole compositional issue. We really just controlled for the allocation. When we did that we ended up with a 1 percent drop instead of a 6 percent drop," said Eric Lascelles, chief economics and rates strategist at TD Securities.

"That’s not catastrophically different, but to me that’s a number that makes more sense. Yes the housing market is correcting moderately but it does not have the making of a U.S.-style correction."

He said Canadian housing starts may fall below the 200,000 mark, home prices will continue to correct in some inflated cities, but there is no need to brace for big delinquencies or a hard drop in prices.

The TD calculations aren’t perfect, Lascelles acknowledged, because they do not eliminate some factors such as type and quality of home in each city.

Canadian housing data has shown signs of softness but nowhere near the slump that hit that United States, stemming from a crisis in the subprime mortgage sector.

(source: Report on Business - http://www.globeinvestor.com/servlet/story/ROC.20081022.2008-10-22T182250Z_01_TRE49L6TU_RTROPTT_0_CBUSINESS-US-HOUSING-CAN/GIStory/)

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Calgary Home Club Report - October 15th

The buyer’s market trend continues, according to figures released by the Calgary Real Estate Board (CREB®).

September Market Statistics

In a news release issued yesterday by the Canadian Real Estate Association (CREA®), president Calvin Lindberg said, “We must remember that all markets go through cycles and remember that the national housing market is actually made up of different communities. Real estate markets are local and every community and every area is different in terms of trends and pricing.”

CREB® president Ed Jensen concurred with Lindberg, saying, “We can see these cyclical affects in our own local Calgary market. Some communities in our city are stabilizing, while others are in the midst of a market shift.”

Single family Calgary metro new listings added for the month of September totaled 2,631, a decrease of 15.3% from September 2007, when new listing added totaled 3,106 and an increase of 15.9% from last month, when new listings coming to the market were 2,270.

Calgary metro condominium new listings added in September 2008 were 1,186, showing a decrease of 9.8% from the 1,315 new condominium listings added in September 2007 and a decrease of 12.5% from last month’s condominium listings of 1,054.

Single family Calgary metro sales for the month of September came in at 1,152, showing an increase of 8.3% from the 1,064 sales in September 2007 and showing a decrease of 1.5% from last month’s sales of 1,170.

Condominium sales for the month of September were 465, a decrease of 3.7% from the 483 condominium sales recorded in September 2007 and showing a decrease of 6.1% from August 2008 when 495 condominiums changed hands.

“The number of single family homes selling in the $200,000 to $250,000 price range has increased this month by 50% over last year. And while single family homes selling within the $350,000 to $450,000 price range have remained almost the same as they were in September 2007, another significant change is the price range of 450,000 to 550,000, seeing a 19% decrease in the number of units sold,” explained Jensen. “In short, more homes are selling in the lower price ranges, indicating that the favourable price range has shifted to one lower than that of 2007. Clearly, it’s still a buyer’s market and the opportunity for first time homebuyers to get into the market is better than it’s ever been,” Jensen concluded.

The median price of a single family Calgary metro home in September 2008 was $395,000, showing a decrease of 6.1% from September 2007, when the median price was $420,500 and down 0.8% from last month when the median price was $398,000.

All Calgary Metro MLS® statistics include properties listed and sold only within Calgary’s city limits.

The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period of time. During that time, half the buyers bought homes that cost more than the median price and half bought homes for less than the median price.

The average price of a single family Calgary metro home in September 2008 was $444,048, showing a decrease of 5.7% from September 2007, when the average price was $470,888.

The average price of a Calgary metro condominium was $287,426, showing a 10.6% decrease from September 2007 when the average price was $321,614.

Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differentials between geographical areas. (source: Calgary Real Estate News - http://www.cren.ca/content_view?MODE=VOL_ISSUE&VOL_ISSUE_ID=2641&PUB_DATE_DISPLAY=October 9%2C 2008&CONTENT_ID=3628)

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