With inventory down 35% from the norm, and new listings hard to come by, it’s almost unfathomable that sales are up 39%. Don’t expect too much of a lull in activity which usually happens at this time of year, unless we completely run out of homes to sell.
Sales to first-time buyers were up 39% in July compared to the 3-year average, but I expect this group will be affected most by the CMHC mortage cap, and a drop in first-time buyers is most likely to eventually occur.
Posted in Calgary SFH, First-time buyers, Market update
Update Aug 1: The Financial Post Magazine contacted me today regarding a story they’re doing about the real estate market across Canada. The reporter was asking why Calgary was so different from other cities. I have my opinions which will eventually be published. What’s your take? (I had to chuckle when they asked about Garth Turner’s bad predictions for Calgary!)
How do you achieve record sales when there’s almost nothing to buy? Inventory is at its lowest point since 2006, so you know that attractive new listings are going fast. As we learned from the craziness of 2006 – 2007, a runaway market is no fun for anyone except a few sellers who are moving to cities where the prices are low or dropping. Many homes are sold by the time a buyer comes to view them. Sellers can realize a quick sale, but if they are moving up or across town, they have all the headaches of looking for a new home with all the difficulties and turmoil of an over-heated market. We require lots more inventory before things will settle down, and there is no sign of that happening.
First-time buyers were up 39% compared to the average of the past 3 years.
The sales-to-new-listings ratio at 80% is the highest it’s been since 2005. Homes under $500,000 are in huge demand, with an absorption rate of 1.1 in July. That is an entrenched seller’s market. Over the last four days of July, 15% of sales were for list price or higher. As Brad stated in his recent comment, Garth Turner looks very foolish for his dire predictions of a nosedive in Calgary’s sales. Be careful who you listen to.
Posted in Calgary SFH, City of Calgary, First-time buyers, Market update, Month-end
Last month I made a special note of the fact that first-time buyers were busy in May, with a 30% increase in first-timers over last year. This story in the Herald reinforces it:
The real estate market in Calgary is supported by three important factors, any of which would support a robust market independently and yet we enjoy all three,” said Cody Battershill, a realtor with RE/MAX House of Real Estate in Calgary. “The underlying variable that ties all three together is the desirability and quality of living we enjoy in Calgary.”
The first factor is strong migration to Calgary and Alberta.
“The second is Calgary’s demographics. We are Canada’s youngest major city with the average Calgarian being in their mid to late 30’s. This is important as first-time buyers kick start the property ladder and enable existing homeowners to sell and move up,” he said.
“The third factor is that Calgary is a head office leader and business hub that is recognized internationally for our experience, technical prowess and leadership. Calgary has more head offices per capita than anywhere else in Canada and is the world’s 17th most competitive financial centre.”
Read more: House price growth best in Canada
also, from BMO: Prices remain stable, perhaps maddeningly so for the legions of bubble mongers. The ceiling can’t hold us
Posted in Calgary Herald, Calgary SFH, First-time buyers, Population
Average and median prices reached an all-time high in May. A dramatic increase in first-time buyers bodes well for the move-up buyer and the long-term health of the market. For the last two days of May, 21% of homes sold for list price or higher, so bidding wars are still going strong. You can see a more comprehensive update on my Monthly stats update.
With inventory approaching the 3500 level, I’m hopeful we’ll see a moderation in prices and an end to the bidding wars for the remainder of the year.
From the Calgary Herald: Calgary housing market smashes records in May
Posted in Bidding wars, Calgary SFH, First-time buyers, Market update, Month-end
A spike in new listings led to a dramatic rise in first-time buyers in April. Bidding wars are at their highest level in years. Over the past 3 days, 24% of homes sold for list price or higher. With new listings up 5%, I would have expected to see a drop in the median price, but the pent-up demand from buyers kept sales and prices up there. When 24% of homes are selling for list price or higher, you can be assured that inventory levels are not making for a healthy market. Let’s hope for a surge in new listings in May. You can see a more comprehensive update on my Monthly stats update.
Posted in Bidding wars, Calgary SFH, First-time buyers, Market update, Month-end
There was a lot of consternation in February when Calgary’s sales were down by 6%. Many were jumping on the crashwagon, saying that Calgary had finally succumbed to the same fate as Vancouver and Toronto. Now in March, compared to last year, they are up 2.7% and compared to the 3-year average, they’re up 7.8%.
Bidding wars have eased up slightly with only 10% of homes selling for list price or higher over the past 3 days. First-time buyers are seemingly being priced out, which in turn should help to moderate the price increases. The inventory shortage is still the overriding concern, however.
Posted in Calgary SFH, First-time buyers, Market update
Over the past two days, 20% of the sales have been for list price or higher. 31% of the homes listed in the past 30 days already are sold or conditionally sold. Concern: First-time buyers are down 8% compared to last year. Are they being priced out?
A tear-down bungalow in Capitol Hill was listed two days ago for $524,900. It sold in one day for $540,000. Builders seem to have confidence in this market.
Also two days ago, a home in Elbow Park sold for list price, $1.6 million, after two days on the market.
Posted in First-time buyers, Market update, Over list price
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.
First-time buyers
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 |
| 2012 | 188 | $250 |
| 2011 | 188 | $239 |
| 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?
When there’s a lack of inventory, an attractive and accurately-priced home will sell quickly. The above house was listed in the morning and had a conditional sale by sundown.
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.
Posted in Calgary SFH, First-time buyers, Market update, Mortgages, Renting
It’s been said that the future of the housing market depends on first-time buyers, and it stands to reason that the market requires a healthy supply of entry-level buyers to enable the move-up buyer to sell. According to the latest statistics, the future looks terrific.
Compared to last year, April sales to first-timers are up 63%.
Posted in First-time buyers
Over the past 30 days, compared to 2011, first-time buyers have been extremely active in the Calgary SFH market. Continue reading
Posted in First-time buyers
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