Calgary Real Estate News - January 2008
The fourth quarter results of 2007 were as expected. The real estate market continued to slow, and prices in some categories continue to decline. There seem to be many more sellers than buyers nowadays. Because of this, those who NEED to sell are being forced to reduce their prices to compete with other sellers and attract interest from the dwindling number of buyers.
The Calgary Herald wrote a story in the December 20, 2007 edition about the number of people leaving Calgary. The following is courtesy of www.canada.com/calgaryherald
Alberta migration numbers show startling reversal
StatsCan reports more people leaving province
Kim Guttormson, Calgary Herald
Published: Thursday, December 20, 2007
The Canadians who have helped fuel Alberta's economic boom are going home -- especially those from Saskatchewan -- with more people leaving our province over the past few months than moving here...
A Statistics Canada report released Wednesday found that between July and October, 3,316 more people left Alberta for other provinces than moved here, the first negative inter-provincial migration number in 13 years.
Saskatchewan saw an overall population increase of 6,430 during the same three months, pushing it above the one million mark for the first time since 2001 -- and making it about the same size as Calgary.
"Every province is gaining through the change happening in Alberta," Hubert Denis, a senior demographer with Statistics Canada, said. "It's happening more extensively in Saskatchewan.
"Almost all the provinces in Canada did win from the change in trends of Alberta migration. Everybody is going back home."
Denis said the odd thing about more people leaving Alberta is that it's not tied to an economic slowdown.
Hirsch said the reversal in migration will make it more difficult for Alberta companies already short of workers.
"It's going to make labour availability even worse," he said.
But Harry Hiller, director of the Alberta in-migration study at the University of Calgary, said a slowdown in the province's red-hot economy isn't necessarily a bad thing.
"We need a breather," he said.
Katie Domm and Kyle Crowder were part of the eastern exodus in the third quarter of 2007, moving to Saskatoon so Domm could attend medical school.
While Saskatchewan is home for Domm, the couple found the move wasn't quite what they expected. Renting in Calgary, they planned to buy in Saskatoon, but found the housing market going through the roof. Homes listed for $379,000 would sell for $479,000. And they're paying $275 more a month in rent, Domm added.
"Most people think it's cheaper here, but it's not," Crowder said.
Domm said the irony is that some of the same problems experienced in Calgary have followed returning residents.
"Traffic is a nightmare," she said of Saskatoon. "They had really unprecedented growth in the past year and it doesn't seem like they have planned for it."
Calgary Real Estate News - October 2007
At the end of every quarter, the Vostner Bell Real Estate Group reports on the Calgary housing market. The third quarter results of 2007 were as expected and show no signs of suffering from the effects of the credit problems plaguing the financial institutions and impacting home owners and buyers in the United States. This is not to say that Calgary won't be affected in the future, but for now, we have a stable Buyer's market.
Here are the highlights of the report as outlined by our own Jason Bell on October 3, 2007:
"The Calgary residential single-family, detached real estate market saw more of the same characteristics as the second quarter of 2007 did. There was a decrease in the number of sales, an increase in inventory, and slight price decreases overall with more decreases seen at the upper end of the market. The condominium market held its own with prices fluctuating up and down, but generally remaining stable in most areas"
"As anticipated, home sellers that were waiting until the Fall to sell their houses have now put them on the market. This has drastically increased the number of houses for sale while the number of buyers in the Calgary area has stayed the same or decreased. Because of the fundamental concept of supply and demand, I feel this is likely to fuel an ongoing decrease in sale prices of detached single-family houses in the coming months"
- Supply and Demand: if there is much supply and little demand, prices tend to drop. If there is much demand and little supply, as we saw in 2005-2006, prices tend to rise. Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand.
The Stats:
- Six months ago (March 30), there were 4,723 residential properties on the market and 4,077 sales of properties. As of last week (September 30) there are 11,001 properties for sale with only 2,030 that sold in September
- Average house price in July: $ 505,920
- Average condominium price in July: $ 318,582
- Average house price in September: $ 470,888
- Average condominium price in September: $ 321,614
- Average number of days on the market: 44
October 2007 Outlook
Jason Bell writes:
"Firstly, the following is only my opinion and should not be considered advice or a forecast of what is to come. The real estate market is volatile and anything can happen at any time.
With Winter looming (and the subsequent slow-down sometimes seen in the winter months), coupled with the high levels of inventory in the detached housing market, I anticipate a further slowing of the market and expect to see house prices decrease over the next three to six months. (Although this contradicts what some other REALTORS are saying, the indicators are too strong to ignore.) I am often asked "how much will prices go up or down?" In this case, my best guess is a 10% decrease in sale prices by the summer of 2008. Decreasing house prices is good news for buyers over the next number of months, but bad news for sellers who need to sell.
On a positive note for condominium owners, condo prices have remained stable primarily due to a condo's relative affordability. This affordability has led to an ongoing interest in the condominium market, thus keeping prices where they are.
If oil prices remain above $80/bbl and nothing catastophic happens (eg. severe hurricanes affecting off-shore drilling companies, terrorism in the U.S. etc...) the early months of 2008 will be the next indicator of where the Calgary real estate market is headed. For now, we have a buyer's market. How long will it last? I believe for a long time, but only time will tell."
DISCLAIMER: The Vostner Bell Real Estate Group provides the information, opinions and comments presented above and in other areas of their websites for information purposes only. It is not to be relied upon by recipients of the newsletters, investors or any other persons who may read it. All readers of the information are advised to conduct their own research into the Calgary real estate market, or any other matter concerning real estate, as they may deem appropriate. The Vostner Bell Real Estate Group neither warrants nor assumes any responsibility or liability of any kind with respect to the accuracy, correctness, completeness, suitability or decisions derived from the Information.
Jason Bell, Tess Vostner-Bell & Associates
MaxWell Realty Canyon Creek
3205-380 Canyon Meadows Drive SE Calgary, AB T2J 7C3
Tess's cell: (403) 689-1199
Jason's cell: (403) 830-5800
Office: (403) 278-8899
V
B
VOSTNER-BELL
Real Estate Group
Tess Vostner-Bell, Jason Bell & Associates
MaxWell Canyon Creek
Calgary Real Estate News - June 2008
On a regular basis, the Vostner Bell Real Estate Group reports on the Calgary real estate market.
For June 2008, Jason Bell writes:
"The number of homes coming on the market continues to increase, and we have nearly 15,000 properties for sale on the Calgary MLS. This means that almost 15,000 homes, condos and other styles are for sale, right now, in Calgary & surrounding areas & towns. This is 5-10 times the "typical" inventory level of years past. With a staggering increase in the number of people trying to sell their homes, and no real corresponding increase in the number of buyers, homes are staying on the market longer, with many not selling.
This is resulting in price reductions from home owners that need to sell. In what I call the 'typical house' market in Calgary (starter homes and family homes with double attached garages), house prices range from the high $300,000's to the $500,000's. It is in this segement that we have seen house price reductions since the Fall of 2007. The only communities that I have not witnessed any depreciation are Mount Royal and Scarborough.
As I have written before, almost any home will sell for the price the owner is asking, assuming the owner is not in a hurry to sell. For example, a home that was over-priced by $100,000.00, finally sold three years later once the market caught up with the inflated price of the house. It could be argued that the owners did well by making an extra $100,000 by standing firm and waiting three years. However, the mortgage payments on the house were likely over $2,000 a month, so they potentially paid $72,000 in mortgage payments during that time (and how much went towards interest?) and stayed in a home that they wanted to move out of.
Lastly, understand that recent media reports about average house prices holding steady or only dropping a percentage or two, can be misleading. Although these numbers are accurate, the averages also take into consideration all of the multi-million dollar properties that have also sold in Calgary. The sale of these luxury homes and acreages drive the 'average price' up."
Jason can reached at 403-278-8899 or at jason@realtycalgary.com
Experts split over future housing prices in Canada
Courtesy of CTV News www.ctv.ca
Written by Bill Doskoch
With housing prices collapsing in parts of the United States, many Canadians are wondering if the same fate awaits the real estate market here.
Housing experts themselves are divided on that question.
Ted Tsiakopoulos, Ontario regional economist for the Canada Mortgage and Housing Corporation, laid out the optimistic case.
"We don't see a U.S.-style housing market meltdown in Canada for three very important reasons," he told Canada AM on Monday.
* Canadian housing prices have grown in a "steady, sustainable way"
* Mortgage arrears are at a low level, which suggests financial institutions have been prudent in their lending practices
* Canada's overall economic fundamentals remain healthy
In mid-March, however, the Royal Bank reported that home ownership costs have risen to the highest point since 1990.
That year marked the "peak of the housing bubble," it said.
However, the bank was optimistic the current situation should ease. "Going forward, falling mortgage rates, cooler forecast house price gains and decent income growth should all lead to improved affordability across most markets," it said.
Tsiakopoulos said the CMHC sees moderate price growth continuing. But Ontario MP Garth Turner has a different view.
The author of a new book, "The Greater Fool: The Troubled Future of Real Estate," Turner thinks the pieces are in place for a real estate collapse in this country.
The U.S. financial sector has been rocked by subprime mortgages, which essentially provided a way into real estate for people who wouldn't qualify for conventional mortgages. But Turner told CTV.ca the real story is that housing prices in the U.S. got more expensive than Americans could afford.
In Canada, real estate prices have essentially doubled in five years. Turner said he didn't think that was a "reasonable" increase.
Over that period, household incomes have stayed essentially flat, he added.
Mortgages in Canada?
"What's been the Canadian response? Well, guess what? We've brought in a new kind of mortgage -- 40-year amortizations," Turner said.
You can also get a home for virtually no money down, Turner said. "You tell me what the difference between subprimes and a 40-year, no-down-payment loans in Canada is. The net effect is exactly the same. People buy houses who otherwise couldn't buy them."
In the biggest markets, people are unquestionably house-poor, he said.
The RBC's affordability measure for a detached bungalow in Vancouver is about 74 per cent and more than 47 per cent in Toronto.
Places like Calgary and Edmonton come closer to the national average of 41 per cent.
The affordability measure is the proportion of median pre-tax household income required to service the cost of mortgage payments (principal and interest), property taxes and utilities.
The measure has traditionally been around 30 per cent, Turner said. "We've got a very screwed-up personal financial situation right now, and I see some dangers in that," he added.
RBC's Amy Goldbloom told CTV.ca that an RBC study finds that for 2007, the U.S. situation was worse than here. Mortgage debt there was 119 per cent of disposable income versus about 79 per cent in Canada. Total household debt was also much higher in the U.S. than Canada. "Americans are more indebted and more leveraged," she said.
Goldboom said the RBC's analysis and prediction of moderate price increases took into account a slowing U.S. economy's effect on Canada. "We aren't forecasting outright declines in prices as we're seeing state-side," she said.
But Turner rolled off some troubling statistics, such as sales activity of resale homes in Canada falling six per cent in February -- although some critics have argued that blip could be due to stormy winter weather.
In his own riding of Halton west of Toronto, houses are staying on the market for up to 12 months and are falling in price, he said.
"Why you would want to be a new purchaser of real estate right now is beyond me," he said, adding that many young people have only known real estate to go up in value.
If you still want to buy a home, Turner makes the following recommendations:
* Don't take out a 40-year mortgage
* Aim for a 20 per cent down payment
* Don't make monthly payments -- accelerate if possible
* Consider what future homeowners will want to purchase (i.e., don't buy a huge, energy-hogging suburban home)
But if you don't own real estate right now, consider remaining a renter for the short term.
"We're into the most incredible renter's market coming up. If you simply want to make money and secure your finances, you're going to rent, because renting is far, far less than the cost of owning right now," Turner said. "And it will remain that way for the next couple of years."
Calgary Real Estate News - April 2008
On a regular basis, the Vostner Bell Real Estate Group reports on the Calgary real estate market.
For January, February and March of 2008, Jason Bell writes:
"The first quarter results of 2008 were similar to the last quarter of 2007. The Buyer's Market continued and prices in some categories continued to decline. Calgary inventory has hovered around 10,000 properties for sale on any given day. This is almost 2 1/2 times the number of properties for sale around this time last year (eg. 10,652 in February 2008 versus 4,288 in February 2007)
When you have a large number of homes and condos on the market but not a large number of buyers, homes and condos stay on the market for longer. For sellers that need to sell, they either need to embrace some creative and unique marketing in order to sell their home quickly, or simply lower their asking price.
On an almost daily basis, Tess and I are asked what our thoughts are about the real estate market and where it is headed. For now, we have a Buyer's Market. Although some financial "experts" have speculated that Calgary's home prices may rise 7% this year, I personally don't see this happening.
Although I do not belive that there is a "real estate bubble" that wil burst, I feel that we have hit a "ceiling" of sorts for the time being. With the sub-prime mortgage debacle in the U.S. and with the current recession that the States is in, many Canadians are starting to feel nervous. The weak economy in Ontario will filter across Canada in some form, and Albertans will likely tighten their purse-strings.
In my opinion, these factors (among others) will contribute to a "cooling-off" period in Canadian real estate.
Locally, the number of people leaving Calgary and Alberta to go "back home" should result in an increase in the number of homes and condos for sale, which in turn could result in some further price decreases. "
Calgary Real Estate News - September 2008
On a regular basis, the Vostner Bell Real Estate Group reports on the Calgary real estate market.
For September 2008, Jason Bell writes:
"Well, it happened. Calgary residential prices for single family homes have fallen over 10% in the last twelve months (August 2007 to August 2008...condos fell 9.3% in the same time frame). For homes that actually sell, they are staying on the market an average of 50+ days before selling (other listings either expire, are terminated, or are simply taken off the market).
For those of you who read my articles on a regular basis, you know that I have been warning both buyers & sellers about falling home prices since last summer. I was frowned on by some other REALTORS who were certain that house prices would continue to rise. Even the CMHC (Canadian Mortgage & Housing Corporation) was giving estimates of house price increases in 2008.
Although I still don't believe that Calgary house prices will drop like American real estate values, it was one year ago when I wrote in my September 2007 article and newsletter that Calgary house prices would likely fall 10% by the summer of 2008.
The magic number of 10% happened this August, where average Calgary sale prices for single family homes in August 2008 were 10.3% lower than in August of 2007. This was due to all of the factors that have previously been written about (recession in the U.S., slowing Canadian economy, people leaving Calgary and moving back home, increased supply of homes for sale, dwindling number of buyers etc...)
What's ahead for Calgary house prices? That is a question that our office is asked daily. For now, I do not see any drastic changes to the Calgary and Canadian real estate market. The U.S. and Canadian elections will influence what happens to the economies in both countries in the coming months so a re-evaluation will be needed after November.
Although we are close to having a balanced market, I see a subtle, ongoing decrease in Calgary house values over the coming Fall and Winter months (maybe a few more % points)."
Questions? Jason is easily reached at 403-278-8899 or at jason@realtycalgary.com
Calgary Real Estate News - November 2009
On a regular basis, the Vostner Bell Real Estate Group reports on the Calgary real estate market.
For November 2009:
MLS sales activity in October reached record levels in Canada for the month, buoyed by strong residential real estate markets in Western Canada, particularly Vancouver, Victoria and Calgary.
The numbers last month compared with a year ago are simply staggering. Greater Vancouver led the country with a whopping 170.8 per cent hike in MLS sales, followed by Victoria at 135 per cent, Toronto at 64.2 per cent and Calgary at 55.9 per cent.
"A dramatic rebound in sales activity compared to the recent low rate at the beginning of the year," said Gregory Klump, chief economist for the Canadian Real Estate Association, of the Calgary real estate market.
"Trendwise, we're still continuing to see new listings down from their peak reached in early 2008. So the market's tightened up considerably. In fact, using sales to new listings as a gauge for market balance, Calgary appears to be in a seller's market territory."
In October, Calgary had 2,265 MLS sales for an average sale price of $399,679, which includes single-family homes and condos. The price is up 2.9 per cent from a year ago. And new listings were down by 21.9 per cent to 3,343.
In Alberta, sales for October increased by 29.6 per cent from last year to 4,978 units and the average sale price jumped by 2.6 per cent to $351,091.
Total dollar volume of all transactions rose by 33 per cent to over $1.7 billion while new listings decreased by 24.2 per cent to 7,643 units.
At the national level, total unit sales were up 41.5 per cent across the country to 42,288 for an average sale price of $341,079, up 20.7 per cent from a year ago. In Canada, total dollar volume of all transactions increased by 70.8 per cent to just over $14.4 billion. New listings dropped by 15.2 per cent to 63,285.
By Mario Toneguzzi, Calgary Herald
The author or provider of this article assumes no responsibility whatsoever for any information given herein because the purpose of this column is not intended to provide professional advice including, without limitations, investment, financial, legal, accounting or tax advice. For specific advice to your situation, please consult your professional advisor specializing in the area of your needs.
Calgary Real Estate News - September 2009
On a regular basis, the Vostner Bell Real Estate Group reports on the Calgary real estate market.
For September 2009:
"Existing home sales, as measured by the Multiple Listing Service (MLS®), have rebounded strongly since January and will reach 420,700 units in 2009 and remain close to that level at 419,400 units in 2010. The average MLS® price is expected to moderate to $301,400 in 2009 and to increase to $306,300 in 2010.
According to CREB®, home prices within Calgary’s city limits are expected to make gradual gains as Fall approaches, but remain relatively stable as a whole.
The average price of a single family Calgary metro home in August 2009 was $454,130, showing an increase of 4% from July 2009, when the average price was $436,782, and showing an increase of 3% from August 2008, when the average price was $440,625."
Many economists and potential homebuyers have been sitting on the fence, uncertain as to whether or not we have seen the worst of the recession and low prices. It appears that we hit "the bottom" back in December. Since then, Calgary and area sale prices have risen steadily over the past 8 months.
Now, analysts are forecasting an ongoing increase in sale prices of existing homes and condos as well as an increase in new home sales for the rest of 2009 and throughout 2010.
Calgary Real Estate News - April 2009
On a regular basis, the Vostner Bell Real Estate Group reports on the Calgary real estate market.
For April 2009, Jason Bell writes:
"Although Calgary residential home prices have dropped approximately 17% since their peak in June/July 2007, there has been a surprising INCREASE in Calgary residential sale prices over the past few months.
Buyers are gaining confidence and with interest rates at historically low levels, many people are finding that now is an ideal time to buy or invest. With an increase in demand, it is fair to assume that prices will stabilize or potentially increase (as opposed to continuing to drop as they have for the past 20 months.)
On a daily basis, we are asked what the future holds. Simply put, I wish we had a crystal ball. Having said that, Canada should start to see a recovery from the recession in late 2009, carrying on into 2010. There are many different factors to consider, but in a nutshell, once the media starts reporting economic growth again and Canadians start spending money, real estate prices will likely be on the upswing again. This is speculated to happen sometime between September 2009 and April 2010.
NATIONAL NEWS (courtesy Calgary Real Estate News): Resale housing activity in Canada in February 2009 was up from the previous month, according to statistics released by the Canadian Real Estate Association (CREA®).
A total of 28,669 homes traded hands via the Multiple Listing Service (MLS®) units nationally in February 2009 on a seasonally adjusted basis.
This is 8.6% above seasonally adjusted levels in January 2009, and the first monthly increase in activity since September 2008.
Seasonally adjusted activity in February also surpassed levels reported in November and December of 2008.
Monthly seasonal increases in activity were largest in British Columbia (14.4%), Nova Scotia (12.7%), and Alberta (11.9%).
Questions? Jason is easily reached at 403-278-8899 or at jason@realtycalgary.com
The author assumes no responsibility whatsoever for any information given herein because the purpose of this column is not intended to provide professional advice including, without limitations, investment, financial, legal, accounting or tax advice. For specific advice to your situation, please consult your professional advisor specializing in the area of your needs.
Calgary Real Estate News - December 2008
On a regular basis, the Vostner Bell Real Estate Group reports on the Calgary real estate market.
For December 2008, Jason Bell writes:
"It is interesting what a number of weeks of stock-market turmoil and political posturing can do to the confidence of a Calgary home buyer and the Calgary real estate market in general. Sales have slowed and some buyers have decided to postpone any purchases until they see what happens with the economy and the markets, or in some cases, what is going to happen to their jobs.
While average property prices drop bit by bit in Calgary and surrounding areas, this is not necessarily turning out to be a great time for buyers; it is more difficult to obtain a mortgage this week than it was even last week. In response to the current market meltdown and credit crisis in the U.S., most Canadian banks now have more stringent requirements for loans and mortgages. The likelihood of Canada-wide layoffs and increased unemployment in the coming months are causing many banks/lenders to be extra-cautious when qualifying buyers.
If you are thinking of buying and you already have a property with a mortgage that has a good interest rate, contact your lender and ask if you can "port" your mortgage. This is where your existing mortgage (with it's interest rate and terms etc.) are "moved" or "ported" to a different house. In some cases, this can prevent you from having to go through the whole "re-qualifying" process when buying a new/different house where you have to prove income and job stability and such. Also, with mortgage rates suddenly on the rise, this can help you save money if your current mortgage has a good rate.
Lastly, we are still regularly asked where the real estate market is headed. As I wrote last month, the upcoming elections as well as the strength of the world markets will be a big factor in the national and local real estate market. With the recent volatility, it is anybody's guess where the real estate market is headed. I still believe prices will continue to come down, but a recent online study by the National Association of Realtors (NAR) shows that nearly a quarter of potential homebuyers are waiting for the right time to buy. If something can spur this group on as a whole to start buying, it would likely be just the push the market needs to take off again."
Questions? Jason is easily reached at 403-278-8899 or at jason@realtycalgary.com
The author assumes no responsibility whatsoever for any information given herein because the purpose of this column is not intended to provide professional advice including, without limitations, investment, financial, legal, accounting or tax advice. For specific advice to your situation, please consult your professional advisor specializing in the area of your needs.
