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…

Calgary #1 Place To Invest in Alberta – REIN

I received my top ten cities report the other day, and guess what… Calgary is now the best place in Alberta for real estate investors.  This is good for a couple reasons:

1. The average prices and growth in the city will continue
2. This will be great for buyers in the next couple months as they are now purchasing into a potential steady market
3. Buyers over the past couple years who have seen a loss in their house may see some appreciation in their house value

What Don Campbell’s report shows is that after Calgary’s predictable correction of the last couple years we are at a point now where we have more affordable housing conditions, a stabilized economy and renewed optimism. This all bodes well for the next three plus years for Calgary to see above average growth in property values, in-migration and general happiness for Real Estate investors.

If you are in looking to make a real estate investment purchase, please let us know how we can help you out!

Email Us!

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.

Canadian Housing Market to Improve in 2009 and into 2010 – CMHC

Things are looking up for the housing market as starts are expected to make a comeback in the second half of 2009 and into 2010, according to Canada Mortgage and Housing Corporation (CMHC).

CMHC’s Third Quarter Housing Market Outlook predicts that housing starts for 2009 will reach 141,900 for that year and will continue to increase into 2010, at 150,300, showing great promise for Canada’s economic future.

“Economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year,” says Bob Dugan, chief economist for CMHC. “In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen.”

Hamilton, Ottawa, Kitchener and Thunder Bay are the tightest resale home markets in Ontario and as a result of this, they are expected to see a large spur in new home construction later this year.

With buyers and builders shaking off leftover anxiety about the economy and a strong national rebound for resale homes a likely thing to come, many builders are expected to heighten the number of homes they’ll start construction on in the fall.

Improving this activity on the resale market and producing lower inventory levels in both the new and existing home markets are expected to aid in this rebound, according to CMHC.

Existing home sales, as measured by the Multiple Listing Service (MLS), have rebounded strongly since January and are expected to reach 420,700 units in 2009. This spur in the housing market will remain close to that level at 419,400 units in 2010.

Vancouver Real Estate Market: What’s up

Recently, we could witness one of the Canadian records regarding long and fast market growth. The record breaker was nobody else than the Vancouver BC housing market, which managed to keep its growth for almost seven years in a row. Prices of homes grew to an almost double level between 2001 and 2007, whereas inflation didn’t get over 14%. Of course, affordability of houses in Vancouver, especially for first time buyers, was seriously affected by this combination of factors.

After the US real estate market got into problems, its Vancouver relative still worked fine for some time and managed to grow until the beginning of 2008. Anyhow, the market slowed down since it’s been influenced by the pressure of affordability demand, and the market freeze stayed on for a few months. At first, the average price stabilized, but later declined, and under the influence of the global economic crisis in the autumn 2008, the real estate market of Vancouver got into record-low values in January and February 2009. People were generally worried of the deep and long taking real estate crisis as the one in the USA.

If you believe the same, look at the statistics around – February 2009 was the month of rebound, not the beginning of stagnation! Since then, all real estate key indicators in Vancouver BC show positive trend. If we look at the sales numbers, we can see that the numbers in June 2009 reached almost 6 times higher than the level from February and almost twice higher than the results from summer 2008. The percent change in June 2009 was 75.6% compared to June 2008. The average prices were decreasing till December 2008. Then the price level remained about the same until March, when it started to increase again and keeps going up steadily until now. June prices already arrived to the level of October 2008.

Is this surprising? Not so much, if you look at the data carefully. Look at the new listings change graph. The rapid inflow of new houses on the market stopped many months ago in October 2008, after this month the overall inflow was falling.

It’s because one obvious advantage residential real estate can boast – people simply have to stay somewhere. We can stay without cars, hairdressers, or holidays, but we definitely need some shelter. Even though the demand may drop, it is unlikely for it to reach zero level, even for a short period of time. There are some guideliness that the supply side should follow. Real estate items often represent the most costly part of your personal property. You can hold it and refuse selling during the period of decreasing prices, on the other hand such approach stimulates new housing starts. Finally, buyers and sellers have to reach some point of consensus and the earlier they do, the better for both.

So what are the underlying reasons behind Canadian market’s quick recovery, regarding that the US market is still struggling with the crisis? Canada managed to prevent the most painful event – wave of foreclosures. Compared to the financial health of institutions and individual home owners in the USA, the Canadian ones are doing much better. We don’t have to be richer but for sure we have better predispositions to cope if any immediate financial trouble is to come. The most affected financial sector in USA was the subprime mortgages, which are much less often used in Canada. Now our economic fundamentals could be doing better of course, but they are still quite stable.

So what next development can we predict for the real estate market in Vancouver?  Sales and average prices are likely to increase steadily during the few following months. Nevertheless, the situation will calm down after reaching the pre-burst level, due to overall economic slowdown. Next year the interest rates should still be low and prices still under the recent peak, which will make houses very affordable and thus a wonderful opportunity especially for first time buyers!

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.

Don R. Campbell on CBC’s The Hour

Last week, Don Campbell was on CBC’s The Hour with George Stroumboulopoulos (say that 5 times…).  Don is the President of The Real Estate Investment Network, who walks investors through what is happening in the market place along with how to professionally purchase investment properties.

If you missed the show, below is a link to the 10 min video of Don and George.

—Don R. Campbell On CBC’s The Hour—

Don touches on some hot spots in Canada, how the US will effect Canada and other great subjects.  At the end of his time in this clip, he does talk about investing is a thing for the future, and not an immediate cha-ching cash in.  Flippers in the market are not flipping…

Housing Rebounds In The Cards?