October 2009 Market Update

The Calgary housing market continued to rebound in October, according to figures released by the Calgary Real Estate Board.The number of single-family homes and condos sold in October were both up from the same time one year ago. October recorded 1285 single-family homes sold in Calgary, an increase of 57% from October 2008, and 2% higher than September this year. Condominium sales ( 601 units) increased by 51% compared to sales last year and were 4% over sales recorded in September this year.

“Calgary’s housing market has clearly turned a corner,” says Board President. “We expect there to be a few bumps on this road to recovery but we believe the worst is over. Home prices have held firm and edged upwards in some markets over the past months. This has helped buoy up the confidence of both buyers and sellers.”

Single-family new listings added for the month of October declined by 2% from September and were 22% fewer than new listings last October. Condominium units coming to market declined by 9% compared to September numbers this year and were 20% fewer than condo listings last year at this same time.

The median price of a single-family Calgary home was $410,000, showing a 3% increase over September and 5% higher than last October. The median sale price for condominiums registered at $263,900, down 1% from the month before and 2% below last October’s median.

Canadian Housing Markets Buck Recession and Trend Upwards

With the worst of the recession over, residential real estate markets in major Canadian centres are poised for growth in the final quarter of 2009, according to a report released today by RE/MAX.

The RE/MAX Bricks and Mortar Report found the bounce back that began in early Spring has made this recession one of the shortest on record. Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now well-underway. Percentage increases in unit sales from January to August 2009 were led by Vancouver, (up a substantial 14 per cent to 23,158), Victoria (up 7.4 per cent to 5,266), Edmonton (up 6.2 per cent to 13,691), Regina (up five per cent to 2,597), Ottawa (up 2.4 per cent to 10,830) and Toronto (up 1.8 per cent to 58,421). Housing values are already ahead of record-breaking 2008 levels in seven of the 11 markets surveyed, including Newfoundland-Labrador (18.1 per cent year to $203,584), Regina (6.4 per cent to $244,088), Halifax-Dartmouth (3.5 per cent to $239,633), Winnipeg (3.5 per cent to $207,006), Ottawa (3.3 per cent to $301,684), and Toronto (up 0.3 per cent to $385,978). Nationally, average price hovers at $312,585, up 0.5 per cent over one year ago.

The strength of the residential housing sector cross-country has taken many economists and housing analysts by surprise once again. In terms of its impact on the resale market, by historical standards, this recession was one of the mildest. The resilience of bricks and mortar has been demonstrated time and again. While there may still be some challenges down the road, the worst is definitely behind us in the housing industry.

The recovery of Canada’s resale housing markets speaks to the tremendous value Canadians place on the importance of owning a home. The number of Canadians overall who own a home has increased since 1981 from 62.1 per cent to 68.4 per cent, with some markets posting even higher homeownership rates — Calgary (74.1), St. John’s (71.5), and Regina (70.1). Significant gains have also been made over the same period in markets such as Ottawa, where levels rose from 51.4 per cent to 66.7 per cent, and Toronto, where levels rose from 57.3 to 67.6 per cent.

Public sentiment can perhaps best be illustrated by a recent Angus Reid Omnibus Survey* that asked the question “In which do you feel more comfortable investing your money? The stock market or real estate.” Out of 1,000 respondents from coast-to-coast, 77 per cent chose real estate. The results of the RE/MAX Bricks and Mortar Report are clearly representative of this national dynamic at work.

Markets are heating up across the country as purchasers take advantage of affordable prices and rock bottom interest rates. Those who missed the boat in years past have found that sitting on the sidelines can be a costly move. Prices are on the upswing and inventory levels are tightening, so the push toward homeownership is expected to continue throughout the Fall and possibly into early 2010.

Over the past thirty years, the Canadian residential real estate market has experienced three major downturns – 1981, 1989, and 2008. While there have also been regional fluctuations throughout the years, return on investment over this period has been substantial, with Vancouver, Victoria, Toronto, Regina and Ottawa leading the country in terms of price appreciation.

The overall stability of real estate as an investment has also played a role. Markets like Halifax-Dartmouth, Regina, Ottawa, Winnipeg and London have provided steady returns (especially in recent years), with minimal fluctuation.

* The Angus Reid Omnibus Survey was conducted on September 15, 2009 and yields a margin of error of +3.1 per cent, 19 times out of 20.

August 2009 Video Real Estate Update

The first person to correctly locate what town I’m in will get a gift sent to them… please make your comment / guess below on the blog! Good Luck!

Calgary Market Update – July 2008

Calgary residential sales in July increased over last year by 21%. Following a strong June market, July results were seasonally lower by 14% as people focused on summer-time activities.

1585 single-family properties sold in the month of July at an average price of $436,782, down by 2% compared to June’s average price. July’s median sale price was $390,000, a 5% decrease from the median price recorded last July. An equal number of properties sold above and below this median price. Listings of single-family properties declined by 7% compared to June’s new listings and were down a full 18% compared to last July.

In the condo market, 702 units found new owners this July, an increase over last year’s sales by 31%. 36 fewer units sold in July compared to June condo sales. The average sale price of a condominium ($285,032) was on par with June’s average price and declined 4% below the average sale price last year at this same time.

“We are continuing to see market improvement in Calgary home sales,” said the President of the Calgary Real Estate Board. “These are healthy sales numbers in a month when we typically expect a summer slowdown. Confidence has definitely returned to the housing market. Buyers’ moods have been buoyed by news that an economic recovery, albeit gradual, seems to be underway.”

Alberta – Affordability Is Restored

The affordability in Alberta has restored itself, and the market is filled with multiple offers.  Over the past couple weeks, we have been involved with a number of multiple offers.  Right now is a great time to be selling your home.  We listed 6 places just over 1 week ago and 3 of them are now conditionally sold.  If you are selling your home, you need to be priced well and show well.  These are the biggest factors in making a quick and profitable sale in this marketplace.

Here is what RBC had to say about the Alberta and Calgary market.  Here you can see the Full Report.

Alberta — Affordability Restored

Declining mortgage rates and sinking home prices throughout 2008 and early 2009 worked their magic towards restoring homeownership affordability in Alberta. Following record quarterly declines in the first quarter of this year – ranging from 3.3 to 6.1 percentage points – RBC’s affordability measures for the province were broadly back to their long-term averages.  This has sparked renewed interest from buyers, who have made a welcome return to the market recently.  Sales of existing homes have rebounded smartly this spring from their lowest point at the turn of the year since 1996.  Market conditions have tightened as a result of the effect of
stronger buying interest and more restraint on the part of sellers.  With less supply hitting the market — housing starts have been at a 14-year low since the start of this year — and an economic backdrop that is expected to show increasing signs of recovery, Alberta’s housing market is likely at the point of turning the corner.

Calgary — Recovery in the Making

Calgary is another battleground of the housing downturn that is showing signs of turning the corner.  While its economic backdrop, too, remains tenuous – Calgary’s unemployment rate surged to a 12-year high this spring – the market is benefitting from a huge drop in the cost of homeownership since the middle of 2007.  The combination of lower mortgage rates and home prices has driven down RBC’s affordability measures for the city by 7.6 (condominiums) to 11.9 percentage points (two-storey homes) in the last year alone (ended in the first quarter), which brought levels below long-term averages for most housing types.  Greater affordability contributed to a sharp upswing in sales of existing homes during the spring after collapsing to 14-year lows earlier in the winter.  Although encouraging, renewed activity is still shy of where it was before the housing boom began and has yet to stem the decline in prices.  However, the recent sharp rise in the sales-to-new listings ratio suggests that such a development might not be very far off into the future.

Calgary Real Estate Update – Video

As I talked about in the video, below is the graph of the current absorption rate in Calgary…

Weekly Market Update – Week of May 5, 2009

Over the past week the number of listings has dropped, as did the number of sales.  As we head further into the spring market, we may see the listing count decrease even further.  The monthly statistics report came out from CREB this last week, and it showed that the Absorption Rate is down to 4.4 months.  What this means is that if no other properties came onto the market, and we just sold all current listings in Calgary at the rate of current sales, it would take 4.4 months to sell everything.  Over Christmas and into 2009 we were at over 11 months Absorption Rate.  A balanced market is between 2.5 and 4 months, and we are almost at a balanced market, which is a good thing.

Weekly Market Update – April 28, 2009

Over the past week we have seen the number of sales and showings increase across the board.  Single Family home sales rose over the last week while Condo sales dipped.  Another great point, is that over the past couple months, since January 2009 to be exact, we have seen the Median price of Single Family homes stay very constant around $380,000.  The Condo Median prices however have had a bigger ride ranging from $249,000 up to $260,000 since January 2009.

We should expect to see the listing count stay constant with the sales per week rising into the mid 500s as Spring season is now upon us.  As well, we should see the number of showings starting to rise per week as more buyers are starting to look more seriously.

BUYERS:

There are some great purchases out there right now.  With interests rate at amazing low’s, and home prices back to decent levels, this is your time to get into the market.

SELLERS:

In order to be successful in this market, you need to have a home that shows well and is priced well.  Don’t try to test the market in terms of price, as it could hurt you in the end.

Sellers Can’t Move… Period!

We have been noticing a trend happening lately with the sellers that we have been dealing with.  The number of listing presentations that we have done recently is very high… Many sellers, those who have purchased in the last 2-3 years, are having a difficult time versus those who purchased 3-4+ years back.

Of the sellers that have purchased 2-3 years back, some of them are wanting to upgrade their home, and some are even wanting do downsize…  But here’s the thing… Majority of them can’t do either!  With the market swinging the way it has over the last year, prices have gone back to the values of early 2007.  The sellers don’t have enough equity in their homes to make either move.  It’s hard to see the ones who are wanting to downsize, as their payments are a bit high for them currently, but they simply can’t.  Those who are venturing to sell, they are selling $30,000 – $50,000 below what they paid for the home, and in some cases even more.

What will this mean?  I think we will see condo prices and sales increase over the coming months, as their are many and I mean MANY new buyers now buying.  But the upper end single family homes, we will probably not see as great of an increase for some of the reasons above…

What are your thoughts?

February 2009 Real Estate Market Review

The real estate market has corrected back to the pace and possibilities of a market far more realistic than what we experienced over the past few years. Trends, however, continue to ebb and flow as always.

Not surprisingly, sales in February greatly increased over the previous few months. Listings, however, failed to keep pace in most Canadian markets. This indicator bears watching as speculators withdraw from the market, leaving serious buyers and sellers expressing true intention through negotiations and decisions.

Stats portraying national trends need to be thoughtfully considered. So-called national housing indexes such as the National Bank/Teranet House Price Index, include figures from only 6 Canadian cities. The real estate industry is local and Canadians are not a frivolous people.

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