Category Archives: Calgary SFH

Market update June 30, 2014

Inventory vs sales and price2
Slightly better conditions for buyers in June

  • More homes are being listed
  • Bidding wars have eased, but are still commonplace.
  • 26% of homes sold for list price or higher in June.
  • The average amount paid over list price was $6,417.
  • The median price did not increase
  • Average DOM(days-on-market) increased by 2 days
  • Inventory is almost up to last year’s level
  • The trend is your friend: The sales-to-new-listings trend is decreasing. Last year it was increasing.

If you bought an average home in Calgary in June 2013, the price has increased $40,000 in the past year.

Calgary prices post-flood

It’s enlightening to look back and see what the experts were predicting about Calgary real estate immediately after last June’s flooding. One got it right, one got it wrong. Mike has the details on his blog http://calgaryrealestatereview.com/2014/06/08/june-1-7-2014-calgary-real-estate-statistics-trends/

Profit in past year: $37,000

Market update for May 2014

If you bought an average-priced house in May last year, you’ve just made a profit of $37,000. The median price has risen from $453,000 in 2013 to $490,000 today. If you bought at the previous peak in 2007, you’re now up $55,000.

Inventory vs sales and price2

With 31% of homes selling for list price or higher, it’s still a frenzied market for buyers, but a sign of hope: new listings are up by 12%.

For a more detailed summary of the month-end stats , go to my website

Alberta…#1 in the world

The Conference Board of Canada rates the Alberta, Saskatchewan, and Newfoundland economies as the best in the world. Canada’s overall economy comes in at #5 when compared to other countries. econ2014_over_tb1 “Alberta, Saskatchewan, and Newfoundland and Labrador are “A+” economies—they rank higher than any advanced country in our analysis,” said Glen Hodgson, Senior Vice-President and Chief Economist. “Rising income in these provinces has led to higher consumer spending, which has boosted the services sector and real estate activity.”

Read more Resource-rich provinces earn top grade.

What are the implications for the Calgary housing market considering we already have low inventory?

It should be noted that the Conference Board of Canada, like all economic forecasters, has not had a stellar track record when it comes to accurate predictions. Perhaps they are one of the few who have been “less-wrong.”

What’s really behind Calgary’s higher home prices

Has Mayor Nenshi’s desire to see Calgary build “up” rather than “out” resulted in a lack of land on the outskirts of the city for new builds?  The director of the University of Calgary’s School of Public Policy, economist Jack Mintz thinks so…

“Calgary now has moved towards what’s called an intensification strategy. And it’s a good thing to have some intensification because you don’t want to hollow out the middle of the city,” says Mintz.

“But you have to have some balance and if there’s no more expansion that’s going to be allowed, maybe we have to close down parks to make way for new housing. Otherwise prices are going to go up because you’re simply going to have higher land prices.”

Mintz says the city needs to think carefully about limiting new housing development if it wants to make housing more affordable.

“The prices can be policy induced. and if you think of it being artificially high that can happen if you’re no longer getting enough supply relative to the number of people who want to move into Calgary.”

ATB economist Todd Hirsch has a different theory…

“I think that’s part of the reason building costs and material costs and labour costs are a little bit elevated in Calgary still because again we’re not seeing the same impact in Edmonton. So I think Calgary’s flood last year still having some residual carry over effect to these new home prices even today.”

Hirsch says once the flood rebuilding is complete, building costs will come down — and we will likely see more moderate growth in new home prices.

Read more Curbing urban sprawl, flood driving up new home prices

What we didn’t hear in this story is that Calgary is inundated with thousands of new residents every year.  Last year alone, net migration to Alberta from the rest of Canada totalled almost 45,000. Would there be a problem with supply, and higher prices, if we weren’t growing so fast?

Credibility

Eighteen months ago I posted “if inventory stays low, it will continue to put upward pressure on prices.”

Inventory has shrunk from 3500 to 2400 and the average price has increased from $468,000 to $548,000. Who do you listen to for advice about the housing market? I hope it isn’t bubble bloggers like Garth Turner who predicted Real estate prices in Calgary, Edmonton, Fort Mac at 50% of 2006 levels.” (That would have resulted in an average price of $200,000). Garth now pretends he never predicted a crash.  Or this guy from Garth Turner’s Greaterfool.ca on Sep 27, 2012:

“Calgary has peaked. Listings are ripening, prices are dropping. It’s obvious.”

For bad advice, you can’t get much worse than this advice from Andrew

“If you are thinking of buying in Calgary right now, don’t. Wait 9 to 12 months and then reconsider your options. By then you will see significantly lower prices. This will be the beginning of multi-year house price correction/crash…Wait at least 9 to 12 months and then reconsider your options. You will thank yourself.”

If you took his advice and waited for the “significantly lower prices,” your average Calgary house would cost you $88,000 more than in Sep 2012. But wait, Andrew wasn’t finished…

Garth owns real estate, yet he is telling you that house prices are about to enter a multi-year slide across Canada, including Caglary.

Andrew signs off with this gem…

Hi Bob, Garth’s message right. Your message wrong. Please listen.

On my blog, Andrew left this comment on April 23, 2013:

“Calgary real estate is trending down, and no matter how much fairy dust you sprinkle on it that’s where it’s going.”

Don’t let the greater fools scare you from making a wise choice for yourself. Equip yourself with all the relevant information and follow the trends. Better yet, read credible real estate blogs which will show you the trends before they actually start. Experience, integrity, and facts will always win out over scaremongering. A reader of Garth’s blog felt compelled to relate the following personal experience in Sep 2012:

We’ve been renting in Calgary since we moved back 2.5 years ago. Last weekend we made a lowball offer on a house in Willow Park that was on the market for several months and reduced from $575k to $499k. Thank goodness the negotiations did not go through – happily signed a lease for another year and continuing to diversify investments for the future…

I wonder if he’s still reading Garth’s blog, now that his rent has increased and the $499k house is now $599k. How many people have shortchanged themselves by following Garth Turner’s sketchy advice?

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Market update Oct 1 – 12, 2013

Inventory vs sales and price2

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Market update Sep 30, 2013

First timers

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Market update Sep 1 – 26, 2013

Inventory vs sales and price2

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Market update Sep 1 – 20, 2013

Inventory vs sales and price2