Sunshine, lollipops, and puppy dogs can also be added to the basket of good things which we have in Calgary. Unlike the craziness which has befallen the real estate market in Vancouver, we have stability in the world’s fifth most liveable city. If you believe the Toronto Board of Trade, Calgary is the best city on the planet. Let’s hope that Garth Turner’s recent visit here did not infect us with the Toronto disease of negativity and defeatism. It appears that no amount of loathing from the likes of jealous Ontarians will have any effect on our terrific city and its potential. Calgary remains an oasis of innovation and entrepreneurial spirit, with a balanced and healthy real estate market.
Just this morning I heard our dynamic and enlightened mayor, Naheed Nenshi, on the Eyeopener describing Calgary as the city of the future. I like our mayor, but I disagree. We are the city of the here and now, and the envy of the world. After seeing recent political developments, let’s get ready to welcome an influx of progressive, free-thinking people from Quebec to the city of opportunity.
RBC’s latest Housing Trends and Affordability Report said the local market has enjoyed the best of all worlds recently: stronger home resales and home building, moderately rising prices, and attractive and improving affordability. Calgary housing market among Canada’s most affordable
We’re not without some challenges, however, but our problems are small by comparison. Not enough inventory is the major concern. Students are having a hard time finding accommodation this semester. I guess it all depends which side of the fence you’re on. Landlords can pick and choose who they’ll rent to, and get a fair return on their investment. Tenants, on the other hand, will be paying more and will be getting screened more carefully.
Down to the nitty-gritty data, very little has changed since I last blogged two months ago. I fully expected we’d be seeing the usual autumn price drops by now, but the median price is still at spring-like levels. Inventory is still low, down 22% compared to last year. It’s difficult to have sales increases when there’s so little choice for buyers, but somehow, sales are still up over last year, and also up compared to the 3-year average.
Two months ago, we were inundated with dire predictions of a market collapse when the end of 30-year amortizations was introduced. I expected first-time buyers would be hit hardest by the new rules, but the impact has been minimal. The table below is typical of the homes which first-time buyers will purchase, and is identical to last year, except for a slightly higher price:
|Date||# Sales||Price per sq ft|
|Criteria: 2-storey homes in the suburbs under 1700 sq ft for the 30-day period Aug 8 – Sep 6, 2012|
The biggest obstacle for first-timers is the lack of inventory. It’s hard to buy a house when there’s nothing to choose from. For the market to remain viable, we need buyers at the entry level so that move-up buyers can sell. This lack of listings really shows up in the “under $500,000” price range, where there is only a 66-day supply of homes for sale.
What happens when there’s a lack of inventory?
I hope you’ve enjoyed the great weather this summer. Between real estate transactions, I finally climbed Canada’s highest maintained hiking trail which is right on our back door in beautiful Kananaskis Country. Centennial Ridge – Mt Allan hike.
Check back often, as I’ll be updating the blog regularly, at least until ski season starts.
If you have enough money to buy an estate, you should consider doing so. There are many people who are selling their estate and their homes.
Bidding wars update: In the first 7 days of September, 9.2% of the sales have been for list price or higher. That’s down slightly from the 10 – 15% which we were experiencing earlier this year.
A tear-down in Richmond Park/Knobhill sold for $5,001 over list price after 2 days on the market. It was listed for $599,999 and sold for $605,000.
A home in Banff Trail sold for $70,000 over list. Listed for $490,000, it sold for $560,000 after 4 days on the market.
Is this a serious post? Do you really believe that Any market is immune to the natural cycles of real estate? You should touch base with your buddies at the Edmonton blog,even they acknowlledge the real estate cycle and to believe otherwise is delusional.
Where did I say we’re immune, or that we are not susceptible to real estate cycles? You appear to not like reality, but I’m reporting the situation as it is today, so don’t shoot the messenger.
I said back in June that we normally experience a 7% drop in prices from June to December and I expect the same for this year. Rather than whining, why don’t you enlighten us? What’s your prediction for the Calgary market? -Bob
Here’s my prediction. Oil prices, wti, stay above 90 a barrel then all good. Drops below 70 for any length of time then not good at all.
Calgary has a very stable RE market indeed. I don´t know what is Martin complaining about. We all know RE is purely local. Calgary is experiencing its best era and we can expect even more. I´m by no point optimistic. It is just the data which indicates the real situation. On the other hand, Vancouver is becoming what was predicted by many doom & gloom prophets..
Residential Activity in the Second Quarter of 2012
Number of Sales – 8,132
Year/Year (%) – -18.8 (from 10,018 )
Number of New Listings – 19,085
Average Price ($) – 724,319
Year/Year (%) – -11.5 (from 818,721 )
(Vancouver Housing Market: Developments in 2012)
Whether Calgary remains affordable or not depends on the government ability to avoid risky mortgages and on banks and their conditions for lending. I hope the “free market” paradigm has ended with the last Flaherty´s adjustments to the mortgage market (amortization)
It appears that Calgary may not be that different after-all.. http://blogs.calgaryherald.com/2012/09/10/calgary-housing-prices-and-sales-on-the-decline-in-september/
There’s no doubt, this indicates the beginning of an irreversible trend, and the long-awaited crash has started. Not. To quote an infamous bubble blogger, “one month of stats means nothing.” If one month means nothing what would nine days at the beginning of a month tell you? Furthermore, it’s difficult to get sales increases when there’s almost nothing to buy. A drop in sales should be expected as a result of inventory being down significantly.
On a side note, it still amazes me that the Herald uses average price. When referring to the entire city, median price is a lot more accurate of the market’s health and trend. Today, the 30-day median price is up 5.5% compared to last year. The Herald sure seems to be on the side of the doomsayers with all their scaremongering. -Bob
Calgary Herald headline on Sep 10, 2012: Calgary housing prices and sales on the decline in September
To illustrate why you shouldn’t be reading too much into the Herald’s 9 days of statistics, as referred to by Louise in the above comment, sales are now up compared to last year. In the first 11 days of Sep, sales are up 4.4% compared to last year. It must have been a slow news day.
Maybe we should be looking at the weekly trend? Sales over the past week are up 21.4%
Real estate market is a mix of sweetness and bitterness. People who indulge first time in such activities have to go though several issues. Government has imposed a high tax rate on property and dealing with it sometimes becomes troublesome. Real estate market has undergone several changes in the recent times and the market forces are driving this business in a new direction. Talking about Calgary one would be glad to know that unlike other regions of Canada, Calgary real estate market has a completely different approach altogether and is growing very rapidly indeed.