Calgary Real Estate Fall Market Trends Report

Calgary Real Estate Fall Trends

After four months of hesitation and month-over-month declines in activity, homebuyers in Calgary are finally showing signs of renewed confidence. While some concerns still exist about sluggish economic growth in Canada and the U.S., buyers who are moving forward have been enticed by lower prices, greater selection, favourable borrowing conditions, and a healthier out- look for the future. Year-to-date sales of single-family and condominium homes in the Calgary Metro area are down 12.6 per cent, with 12,511 properties changing hands vs. 14,317 in 2009. Affordability has kept the condominium segment slightly more buoyant, with sales down just under 10 per cent year-to-date versus almost 14 per cent in the single-family home category, while the average condominium price posted a modest four per cent gain. Average residential price in the Calgary Metro area, (single family and condominiums combined) however, is up a solid six per cent year-to-date to $411,233 compared with the year-ago figure of $388,302. This has been pulled up by the strength of the upper end, as well as the fact that more homes sold at the lower end of the spectrum one year ago.

Our Thoughts :

The upper end of Calgary’s market or the luxury market, there are currently some great deals…

On the front lines, realtors have been noting softer values with reductions relatively common place. This is reflected by the city’s year-to-date median sale prices. The median price for single family homes in the Calgary Metro area is now $387,000 (down six per cent from $412,500 in 2009), while the median price for condominiums now stands at $258,000 (a four per cent decrease from the year-ago figure of $269,000). Currently, nearly 7,500 listings are available for sale, with supply more than adequate.

First-time buyers are most active, driving sales at the $300,000 to $400,000 price point. Move-up buyers are starting to follow suit, albeit with a measure of caution. That growing influx, combined with any positive economic news, should help to kick start momentum going forward. The upper end remains a bright spot in Calgary’s real estate market, with year- to-date sales over $1 million surging 25 per cent ahead of 2009 levels (242 units vs. 194 units), as buyers take advantage of the current window of opportunity. Investors have also recognized their advantage, snapping up condos and half duplexes throughout the city. Multiple offers are still occurring on quality product that is priced precisely at fair market value and in an excellent location. Conditions are firming up in Calgary and buyers are starting to take notice. The market is expected to remain steady going forward, in line with the healthier September momentum, closing some of the gap between year-over-year sales. Ultimately, sales will remain off 2009 figures, but average price will level out and post a modest gain.

Our Thoughts :

I agree with this report and want to add that many buyers are looking and actually purchasing homes right now in Calgary.  The key is that as a seller you need to ensure that you can control the pricing and how your home shows.  Properties that show well combined with a realistic value will sell…

Provided by REMAX Fall Market Trends Report 2010

"Jared and Rebecca Chamberlain are Calgary REALTORS® who are changing how real estate is done in Calgary by utilizing online marketing and advanced tools to sell your house in Calgary faster and for far more money. They are a top real estate team in Calgary that you should consider for your next move in Calgary.

Jared & Rebecca

Affordability in Canada… Where do We Stand?

Here are the headlines from the most recent RBC – Housing Trends & Affordability Report  (May 2010)… Where do you think Alberta stands?

British Columbia — Unaffordable and becoming riskier
Saskatchewan — Getter tougher on the wallet
Manitoba — Crossing the line
Ontario — Not letting up
Quebec — Bursting at the seams
Atlantic — The Goldilocks market?

AND…

Alberta — Bucking the trend

The Alberta housing market continued to buck the Canada-wide deteriorating trend in affordability in the first quarter. RBC affordability measures eased be- tween 0.1 and 0.6 percentage points, the only province to show declines. This further extended the significant drop in the measures since the end of 2007, a trend that only briefly halted last summer. In contrast to most other provinces, house prices remained relatively tame in Alberta, keeping the cost of homeownership in check. In the first quarter, all RBC measures were at or below their long-term averages, suggesting that affordability remains at favourable levels.

Now let’s take a look at the major center’s… What are the headlines saying?

Vancouver — Gone too far?
Toronto — Still flying high
Ottawa — Charting a record-breaking path
Montreal — On a winning streak

AND…

Calgary — All in moderation

The housing market rebound turned out to be a much more subdued affair in Calgary compared to most of the other major markets in Canada. After posting strong gains in the early stages of the rebound, resale activity has slowed considerably since the fall likely reflecting the lack of traction in the city’s job recovery. Meanwhile, home prices have maintained an upward trajectory, yet the overall pace has fallen short of the national average. In the first quarter, the increase in the costs of home ownership in Calgary was roughly equal to or slightly smaller than household income growth, leaving RBC affordability measures hovering around the zero markdown from as much as 0.5 percentage points (two-storey home) to up as much as 0.2 percentage points (standard townhouse). Affordability continues to be attractive in the city with RBC measures near long-term averages.

Absorption Rate

We always talk about the Absorption Rate in Calgary and how that is a huge factor in where the market is in Calgary and even in your community, you may be wondering what is the rest of Canada doing?  See the image below for more info…

The Next Labour Squeeze 2010-2014?

Original Article by Globe and Mail.com

Evan Brewer could soon be the Alberta economy’s salvation – and its worst nightmare.

Near the end of the energy boom, the 24-year-old New Brunswicker worked as a journeyman welder in the oil sands, making close to $5,000 in a good week in Fort McMurray.

Then the bottom fell out of the market and he is back in Fredericton, picking up occasional work that pays $800 a week at best, and waiting for the next bonanza.

“The difference is unreal,” says Mr. Brewer, who is taking courses to add pipefitting to his welding credentials. “There was good money in Alberta – and I’d go back.”

He may get his chance.

The energy industry, particularly on the oil side, is rebounding, and there are concerns that, once again, there will be a burst of new projects and a shortage of tradespeople in the West. That could set off a labour bubble similar to the frenzied 2004-08 period, leading to sky-high wage costs and the mass importing of workers from outside Western Canada.

“We are about to start running into, believe it or not, another labour shortage,” says Brian Vaasjo, president of Capital Power Inc., the big electricity generating company that last year was spun out of the City of Edmonton’s utilities company.

“It is going to be significant again,” he says, adding that the labour squeeze could happen within a matter of months. “I don’t know how to deal with that.”

That scenario would be just fine for Mr. Brewer – another high-paying job in Alberta – but disastrous for many employers, particularly in non-energy sectors, which actually benefited from one aspect of the energy slowdown: the cooling effect on labour markets.

The problem is the market typically overcorrects on both the upside and downside. When the energy market is strong, there is a mad scramble for new projects and skilled labour, with wages heading out of sight. When things cool down, jobs are slashed, and itinerant tradespeople go home to the Maritimes, to Mexico, or to their farms in Alberta and Saskatchewan.

The sense that things have turned around again is partly spurred by once-delayed projects being pulled off the shelf, such as ConocoPhillips and Total’s plan to quadruple the capacity of their Surmont oil sands facility south of Fort McMurray. But the most telling signals are in the drilling sector, which suffered a deep plunge in activity over the previous 18 months, but is now showing signs of life.

Drilling firms, many in their peak winter activity period, have been calling back laid-off workers and advertising for employees in traditional labour pools such as Canada’s East Coast.

“The hiring activity is at a dull roar right now,” said Wilf Gobert, a former Calgary investment analyst who is a senior fellow in energy studies at the Fraser Institute. “It reflects a need when you start advertising for people,” But he adds the volumes are not huge and they are concentrated in certain skill levels.

Capital Power expects that the bulk of its major capital projects should be well advanced by the time the trades shortage becomes dire, but Mr. Vaasjo has concerns about future maintenance shutdowns, when he must bring in hundreds of people.

In the boom years, Alberta’s labour unions and employers agreed the province could import many out-of-province workers. That transfer slowed during the downturn, but the next time around, it could be more difficult to turn on the taps.

For one thing, a number of resource megaprojects are gearing up in Newfoundland and Labrador, which will pull in East Coast labour, creating more competition. Also, there are new energy hot spots in northeastern British Columbia and southern Saskatchewan.

These concerns are played down by Greg Stringham, vice-president of oil sands and markets for the Canadian Association of Petroleum Producers, who points out that, while oil is showing some life, natural gas markets are still relatively depressed.

He said the industry will deal with the Alberta labour problem better this time around by finding supply sources elsewhere. Western oil and gas companies are more prepared to get supply chains of equipment and materials filled by manufacturers in Central and Eastern Canada dealing with excess capacity. “We seem to learn lessons as we go through these cycles of ups and downs, and one of the big lessons is to nurture these relationships,” Mr. Stringham said.

The market is coming back, he said, but very gradually. “We were going at speeds of 100 kilometres an hour, and we slowed down last year to 10 kilometres an hour.” With the oil market rebounding but gas still soft, “we are up to around 30 to 40 kilometres.”

He adds that “we don’t see the [labour] pressure building yet and hopefully we won’t see it happening again.”

The current Alberta unemployment rate, at 6.6 per cent, does not suggest a lack of ready workers. It sits at twice the level of three years ago, when all kinds of jobs, from labourers to skilled trades, were in short supply.

But balancing the peaks and valleys is a constant challenge for Mel Svendsen, whose Calgary company Standen’s Ltd., produces vehicle springs for the automobile and farm equipment industry.

During the boom, there was a dire shortage of people with specialized metal-forging skills, so he brought in as many as 70 tradespeople from countries such as Romania and Mexico. The idea was that these new workers would spend enough time in Canada to train local workers in the critical metal-working skills.

But in the current economy, “we are having a hell of a time getting their permits renewed,” he said. “The government attitude seems to be that, ‘well, there are lots of people out there looking for work, so hire them.’”

But in his case, local workers don’t have all the needed skills yet, he said.

The skills gap is a long-term problem with long-term solutions, said Mr. Svendsen, who sits on the board of an Alberta foundation with public-private involvement, called Careers: the Next Generation. The driving force behind this education and awareness group is Eric Newell, who grappled with skills imbalances when he ran oil sands giant Syncrude Canada Ltd., from 1989 to 2003.

In the 1980s, young people looked at trades as a career of last resort, and there has been progress, Mr. Newell said. “We now have 10 times the number of apprentices as in 1989.” But despite his group’s work in connecting students and employers, “we were still short of skilled tradespeople when all the projects were going.”

He added that there is growing recognition in Alberta that high-demand trades provide a good livelihood. But even among parents who are tradespeople themselves, there are worries that their children, by going into these jobs, will have to ride the boom-and-bust cycles.

Those gyrations are a way of life now for Mr. Brewer who, as reported in The Globe and Mail in December, 2008, went West determined to make enough money to buy a house and escape his parents’ basement. He did very well for several months, was told there was plenty of work in the oil sands, went home on leave to New Brunswick and bought a house.

Returning to Fort McMurray, Mr. Brewer spent six days on the job in early 2009 when he was laid off as a subcontractor on Suncor’s oil sands site. Back in Fredericton, he had to rent out the house, and returned to his parents’ basement.

He keeps scouring the Web for labour call-ups, but he is not so keen now on Fort McMurray. “Nobody actually lives in Fort Mac. They are just there for the paycheque and then they get the hell out.”

But, he added, he would be back in a flash if that were his best option. “You go where the demand is.”

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.

Housing Market to Rebound This Year and Next

OTTAWA — Canada’s housing market is expected to see a strong rebound in the second half of this year and into 2010, the federal housing agency said Thursday.

Housing starts will reach 141,900 this year and increase to 150,300 for 2010, according to Canada Mortgage and Housing Corporation.

“Improving activity on the resale market and lower inventory levels in both the new and existing home markets are expected to prompt builders to increase residential construction,” CMHC said.

Bob Dugan, CMHC’s chief economist, said “economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year.”

“In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen.”

Meanwhile, CMHC said existing home sales have “rebounded strongly since January” and will total 420,700 units in 2009 and 419,400 units next year.

The average sales price is expected to be down for the entire year, to $301,400, before rising to $306,300 in 2010.

The CMHC’s third quarter Housing Market Outlook said Alberta housing starts are forecast to drop to 16,100 in 2009 from 29,164 last year but rebound to 18,250 starts in 2010.

Source: Calgary Herald

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.

Recession Is Now Over… Says The Bank Of Canada

The recession is over, the Bank of Canada said in its quarterly Monetary Policy Report released Thursday.

After shrinking since the last quarter of 2008, the Canadian economy will grow by an annualized rate of 1.3 per cent in the current quarter, the bank said. “We are on track for the recovery both in Canada and globally,” Bank of Canada governor Mark Carney told reporters.

However, unemployment will continue to rise, he said.

For many Canadians, “it’s not a recovery until they start getting their jobs back. And on that score, we could still be in for a long wait,” Avery Shenfeld, CIBC economist, said in a report published Thursday.

The return to growth after three quarters of decline signals the end of the recession, defined as two consecutive quarters of shrinkage.

Growth will accelerate through late 2009 and by the first half of 2010, the Canadian economy will be booming along with four per cent growth. But that will begin to taper off to less than three per cent by the last half of 2011, the bank said.

Carney said consumer spending and housing are pulling the growth, especially in the U.S. But there is a “speed limit” to that kind of growth, and the economy will hit it after the burst in 2010, he warned.

The bank said in its report that “stimulative monetary and fiscal policies, improved financial conditions, firmer commodity prices, and a rebound in business and consumer confidence are spurring domestic demand growth.”

“However, the higher Canadian dollar, as well as ongoing restructuring in key industrial sectors, is significantly moderating the pace of overall growth.”

The loonie was up 1.14 cents to 92.17 cents US, which may have been a reaction to the bank’s forecast.

The economic outlook is not much changed from its April report, although it says “the growth profile is slightly altered by a faster rebound in domestic demand,” the bank said.

What are your thoughts?  Do you believe that the recession is over…

How did it effect you and your family or those you know?

Original Article CBC

Historians Reject Depression Fears in Canada

Blair Neatby knows what hardship is. He grew up during the Great Depression in the Prairie village of Wawota, Sask., where for many years there was no work, almost no money, plagues of grasshoppers and droughts so bad he remembers the dust “piling up in drifts, like snow.”

Neatby’s father ran a local grain elevator. His salary depended on how much grain he handled, but there was so little wheat and barley to buy he never brought home much money in the Dirty ’30s.

“We took pride in survival,” Neatby says. “ We shared clothes, we grew our own vegetables, we economized as much as we could. We just assumed we would get through it, and we had little choice.”

When the Depression ended Neatby went to war, fighting through Normandy, Holland and Germany. Forty-two thousand Canadians died in the Second World War, but Neatby survived, returning home and eventually becoming a professor at Carleton University and one of the country’s leading political historians.

He acknowledges the current recession is hurting many Canadians, but he also says today’s economic troubles are nothing compared to the severe insecurity and adversity faced by Canadians in the past.

“Since the war we have enjoyed an extraordinarily stable, peaceful and ascending state for our society,” Neatby says. “Younger generations, people now in their 30s and 40s, have never had to deal before with a serious economic crisis.

“It’s hard for them to understand, but we have a very high standard of living, even compared to the 1960s, never mind the ’30s. And it remains high today.”

There is much to be thankful for, despite the factory layoffs, the lousy stock market and the loss of billions of dollars of retirement savings, all of which are reflected in the daily avalanche of dreary economic news that has cast a shadow across the country.

Certainly there is real trouble in places — in cities such as Windsor, Ont., for example, where decades of carmaking affluence are coming to an end, or Port Alberni, B.C, where once-prosperous forestry mills are in crisis.

Yet Canada remains a land of relative luxury and opportunity, with ample cause for optimism and even celebration. And Canadians seem more positive about the future than the bad economic headlines might suggest.

A new Ipsos Reid poll of 1,001 Canadians conducted in late March for Canwest News Service and Global National shows that 83 per cent of people surveyed are optimistic about Canada’s future as a nation, and about their “standard of living compared to others.”

Eighty-seven per cent said they feel positive about the future “despite everything that’s going on in the world.” Sixty-nine per cent believe Canada will emerge from the recession “stronger than it started,” however only 44 per cent expect the downturn to end this year.

We are “light years” from the Great Depression, says McGill University economist William Watson, writing in the February issue of Policy Options magazine.

No one knows how long or deep this recession will be, but to date our economic output, or gross domestic product, has only fallen for a single quarter, at an annualized rate of 3.4 per cent. During the recession of 1981-82, GDP fell 4.9 per cent each year.

The unemployment rate reached 7.7 per cent in February — not much worse than the 33-year low of six per cent achieved during the boom time of 2007 — and far better than the 12 per cent unemployment of 1983, or the 11.3 per cent of 1993. In the Depression unemployment was estimated at 30 per cent.

There was no employment insurance in the 1930s, no Canada Pension Plan, no severance payments for laid off workers and no provincial welfare programs.

During the 1930s, providing “relief ” to the needy was the responsibility of municipalities, but towns and cities had little help to offer because so few people could pay their property taxes.

There was also no medicare.

“It’s important to keep perspective, because in Canada even in the worst of times, we’re still one of the best off countries in the world,” says Catherine Swift, president of the Canadian Federation of Independent Business. “Today most people’s personal circumstances haven’t changed. They’re still employed, they’re still making the same money they were making a year ago.”

While some believe the recession will weaken the West, U.S. author Joshua Kurlantzick calls the global meltdown a more serious threat to the anti-western regimes of China, Russia, Venezuela and the Persian Gulf.

“Such an economic crisis poses a major threat to some of the world’s most resilient autocracies,” writes Kurlantzick in the March issue of The American Prospect magazine. “A strong economy was their only backstop. Now, starved of the growth that keeps them in power, and unable to repress their people as old-fashioned dictators did, these autocracies may have nothing left to fall back on.”

David Giuliano, moderator of the United Church of Canada, has called the crisis a “historic turning point,” in which we might rework the financial system to measure the worth of a company not merely by the size of its shortterm profit, but “according to what it produces and contributes to society.”

Perhaps, says Blair Neatby, the recession might teach younger Canadians who grew up in the age of debt and leverage a simple lesson about the value of saving.

“People like me came home from the war and became a generation of savers,” he says. “And we looked with some concern at our children and grandchildren, who didn’t seem to be as concerned with the importance of saving. They hadn’t lived, as we had, through a time of great insecurity.”

Source: Calgary Herald April 6, 2009

Are You Affected By The Recession?

We want to know if you are finding that you are affected by the recession?

We will run this poll for a week and then post the results for all to see…

CMHC 2008 Canadian Observer

CMHC came out with their 2008 Canadian Observer today…  In going through it, there were many interesting and informative graphs that I wanted to highlight and pass on to you.

Looking forward to hearing any comments or future predictions on the real estate market in Calgary or even in Canada…

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