Ontarians to move to Calgary in droves

The election of the Liberal majority in Ontario has just ensured a continued shortage of housing in Calgary along with increasing prices.

The Twittersphere is choc-a-block full of disillusioned entrepreneurs, trades people and others who will be immigrating to Alberta, the land of opportunity.

“If the Liberals win a majority, I will emigrate from Onterrible.”

“Ontario will be the next Detroit. Bankruptcy on the horizon.”

“Trades will come as there will no longer be a need for them in Ontario.”

Hudak: “I’m moving to Alberta. Good luck.”

“Would the last business in Ontario please turn out the lights (if you haven’t already been cut off for not paying your exorbitant bill).”

“A corrupt government under police investigation is rewarded with a majority. The province is corrupt at this point.”

“To all the hardworking refugees, welcome to Saskatchewan. Move to a place where hard work and initiative still count for something”

“How bout Saskatchewan? Us and Alberta are the two economic powers now. We will take Ontario’s trades and businesses.”

“here is a business case for distribution centres going west, who should I talk to?”

“What other companies will move to Calgary? Debt, taxes, electricity costs, regulations, unemployment, housing costs, HST. Plus the Rockies.”

“The move to Alberta is looking more and more appealing.”

“To the thousands of Ontarians who aren’t content with decline, you’re welcome in Alberta.”

“My prediction: before Wynne is done, a national bank will move its head office to Calgary. Ontario’s have-not status is the new normal.”

“Breaking: Ontario to be renamed Detroit”

Welcome to Calgary. I hope you can find suitable housing. Our inventory of resales is low, new build inventory is low, and the rental vacancy rate is nearly the lowest in the country. Competition for the few homes available is going to be fierce.

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

Why didn’t Vancouver’s bubble burst?

Maybe there was no bubble. To the surprise of many who follow real estate, Vancouver’s bubble didn’t burst, and in fact prices are still climbing. This article explains that just because prices look out of whack doesn’t mean there’s a bubble. It also raises the question, should foreign buyers be charged a premium for the luxury of owning real estate in Canada? It begs the question, is foreign money playing a role in Calgary’s real estate?

It goes on to describe the positive and negative effects of foreign money on the locals.

“A recent report by Sotheby’s International Realty Canada examined more than twelve hundred luxury-home sales in Vancouver in the first half of 2013 and found that foreign buyers accounted for nearly half of sales.”

“Vancouver isn’t an obvious superstar. It’s not home to a major industry—as New York and London are to finance, or San Francisco to tech—and it doesn’t have the cultural cachet of Paris or Milan. Instead, Vancouver’s appeal consists of comfort and security, making it what Andy Yan calls a “hedge city.” “What hedge cities offer is social and political stability, and, in the case of Vancouver, it also offers long-term protection against climate change,” he said. “There are now rich people around the world who are looking for places where they can park some of their cash and feel safe about it.” A recent paper by two Oxford economists bears this out, showing a tight correlation between London house prices and turmoil in southern and Eastern Europe. The real-estate boom in Miami has been magnified by political unrest in Venezuela. And Vancouver, which has a large Chinese population, easy access to the Pacific Rim, and nice weather, has become a magnet for Chinese investors looking for insurance against uncertainty. A Conference Board of Canada report found that Vancouver’s real-estate market is tightly connected to what happens in the Chinese economy.”

Read more in the New Yorker Real estate goes global.

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?

Market update April 30, 2014

Inventory vs sales and price2

A frenzied market continues…

  • 33% of sales were for list price or higher.
  • The only occurrence which has prevented all-out insanity is the fact that new listings are increasing slightly. In the price range below $500,000 homes are selling faster than they’re being listed.  The absorption rate for homes priced between 0 – 500,000 is .8, so that means there is a 24-day supply of listings. In December there was a 36-day supply.
  • 66% of the homes listed last month are already sold.

Suggestion for buyers…

If you’re a buyer, and can wait a few months, there’s bound to be more inventory come July and chances are good that prices will moderate accordingly.

Suggestion for sellers…

There’s never been a better time to get top dollar and a quick sale.

Send me an email if you’d like an evaluation or have any questions bobtruman@shaw.ca

Market update March 31, 2014

Inventory vs sales and price2

My warnings last year of a looming inventory shortage have become reality and it’s an entrenched seller’s market. If you’re looking to sell your home, chances are good that you’ll have a bidding war from prospective buyers. In March, 34% of homes sold for list price or higher. That’s the highest it’s been since the insanity of 2006-2007. Call me for a free evaluation 403-650-2514.

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

False prophets of doom: Garth Turner and Ross Kay

Trust me1After reading this, you could be forgiven for thinking the headline should have been False “profits” of doom.

Garth Turner’s been wrong about the Calgary housing market for six years. When asked about previous predictions which have not panned out, he either denies that he ever made them, despite hard evidence of the written word(HIS written word), or he shrugs it off and blames his readers for being gullible enough to believe him. His blunders have been well-documented on this blog. My blog stats show the most-read blog post this year has been Garth Turner’s track record speaks for itself.

Trust me4He can get away with spouting poorly investigated pronouncements because of his entertaining writing style, and the unquestioning audience who believe him to be the housing-crash messiah.

Turner praises Ross Kay who makes unsubstantiated claims about Calgary real estate data. I’ve repeatedly asked Ross Kay for the infamous list of 317 sales which he claims were double-counted. He will not provide his data. He will not give his methodology. He finally got perturbed by my requests and sent me this final email: “This will be the last communication on this topic.”

Trust me2The onus isn’t on CREB. Kay is the one making accusations, therefore he should provide the 317 “private sales” to start with.  How convenient that he won’t, right?  He claims on his website that he’s not restricted by CREA or other regulations. He won’t provide the evidence because then he’d be giving his accusers evidence that he’s full of crap.

Ross Kay will sell you the “interpretation” of this “secret” data, but not the data itself

What the heck is Ross Kay’s motivation for being interested in the Calgary real estate market? How does he come up with his data? He has no direct access to the database, so where does he get his information? He boasts that it’s triple-verified. By who? Kay has not come through with any evidence to back his claims, but wait, could this be his reason, as he states on his website: “The only accurate interpretation of this data can come from RossKay.com.”  Translation: he’ll sell you the “interpretation” of the real data, but you will never actually see the hard numbers or the methodology. Anyone can make up numbers, but I would have to give him full marks for entrepreneurship and actually attempting to sell them.

Ross Kay is unburdened by data, evidence, or transparency

Ross Kay criticizes the credibility of CREB, yet he will not disclose his data. Ross Kay claims on his website that he is an advocate of open and full disclosure. How does he justify that dissonance?

Turner has a history of creating frankenumbers and questionable data, so it should be no surprise that he’s in bed with Ross Kay.

Ross Kay states on his website: RossKay.com is independent of any and all fiduciary duties related to MLS® data allowing for full independence, open and full disclosure and finally data review that is statistically valid.

Ross Kay, let’s have the open and full disclosure.


Market update Oct 1 – 12, 2013

Inventory vs sales and price2