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.
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
Posted in Calgary SFH, Market update, Month-end
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.
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. 
“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.”
Posted in Alberta economy, Calgary SFH
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?
Posted in Calgary SFH, Developers, Flood of 2013
A frenzied market continues…
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
Posted in City of Calgary, Market update
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
Posted in Bidding wars, City of Calgary, Market update, Month-end
After 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.
He 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.”
The 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.
Posted in Fearmongers, Greater Fool, Motivations, Predictions, Ross Kay
Garth Turner and Ross Kay
Garth “I didn’t say crash” Turner has been discredited numerous times because of his hallucinatory predictions, followed up by self-inflicted amnesia. He’s admitted that if he can’t find a source for his theories, he simply makes up his own data. He’s now hitched his wagon to Ross Kay, a fortune-teller with startling revelations.
I’d never heard of Ross Kay until Garth publicized this sensational prediction, but being endorsed by Garth Turner is a warning sign of sketchy and unreliable data. I wouldn’t have given Kay a second thought, except he’s also accusing CREB of double-reporting sales. We analysed this in my previous post and have shown there is no evidence for Ross Kay’s claims. Waiting on Ross Kay’s open and full disclosure. I’ve asked Kay numerous tmes to produce the evidence, but he has gone silent.
Let’s now look at Ross Kay’s prediction that the market died on May 19, 2013 and see how it relates to Calgary’s data four months later. (Ross was sure it would manifest itself within 60 – 90 days, so we’ve given him a couple extra months for good measure).
The following blog post was written by Garth Turner on May 29, 2013 on the Greaterfool.ca http://www.greaterfool.ca/2013/05/29/a-downward-spiral/ :
The day it died (by Garth Turner, GreaterFool.ca)
In 2008, GTA realtor Ross Kay invented an ‘engagement index’ to statistically chart house horniness. For five years he’s been diligently amassing data, filtering and weighting it, and watching in fascination as 60 to 90 days later changes in his index appeared as official published real estate data.
His track record (he says): 100%.
Hours ago he released what he considers ‘drastic’ results, in a warning to his clients. “Over the course of the last 9 weeks, our index has revealed a downward spiraling real estate marketplace, with results that will not reveal themselves in MLS sales data until finally reported by Organized Real Estate Associations,” he wrote on his site. (This has been removed from his site – Bob)
In a note to me, he adds:
“On May 19th, 2013 we recorded the lowest value of Canadian consumer engagement in real estate since 2010. What is scary here is that on April 8th 2012, we reached an all time high engagement value. The May 19th numbers for 2013 represent about a 72% decline over that peak number. This massive decline raises grave concerns not being reported in newspapers across the country.
“So we project 60 to 90 days from May 19th that MLS sales will be reported that will reveal the market died on May 19th. Our numbers have not been wrong since 2008. So as it turns out the peak of the real estate market in Canada was April 8th 2012, as posted here on Greater Fool. Peak pricing was established and as recorded MLS sales prices now show, anyone who bought in competition around that date paid too much.”
Is this credible? Obviously we’ll find out in a couple of months…
******
How did Ross Kay’s prediction play out in Calgary? Was Ross Kay 100% correct? 50% correct? or dead wrong?
September 2013 price is up 9.2% compared to last year.
September sales are up 20% compared to last year.
Inventory, which you would expect to increase in a dead market, is down 20%.
Would there be bidding wars during a dead market? 18% of homes were sold for list price or higher in Sep.
Not exactly the sign of a dead market.
Posted in Greater Fool, Predictions, Ross Kay
Ross Kay
Ross Kay has made some claims, unsubstantiated, that CREB has engaged in double-reporting of sales. His allegations came to light in a recent blog posting on GreaterFool.ca., a blog written by Garth Turner.
I’ll be the first one to call out CREB if they have inconsistencies in their reporting. My first and foremost goal is to provide accurate statistics to my readers and clients.
Says Kay: “If CREB removes the 317 private sales in August not similarly counted last August, total sales are really up 14.24%, not 27.5%. And removing private sales from listing means there are only 6,447 active listings now – a 28.17% decrease.”
I’ve repeatedly asked Ross Kay for a list of the 317 sales. Crickets.
Ross Kay is an advocate of open and full disclosure. I say, bring it on!
ComFree, one of the largest FSBO brokerages that lists on MLS, weighs in. “CREB has included ComFree MLS® listings in its sales stats since we became a brokerage in 2012. And those listings that are only featured on ComFree.com (and do not include an MLS® listing) are not included in CREB’s stats and are not counted as “private sales…In August of 2012 our brokerage was already offering MLS® listings on REALTOR.ca to our sellers. So that certainly does not account for the rise in listings on REALTOR.ca in August 2013!” Calgary Real Estate Review
CREB has released this statement: One outspoken critic of organized real estate recently wrote a blog in which he questioned the integrity of the data at some real estate boards in Canada, including CREB®’s. CREB® would like to assure you that there is no significant double-reporting of sales in our MLS® System, nor is there any distortion of data involving the reporting of so-called “private sales”, as the blog’s author referred to them. “There is no such thing as a ‘private sale’ in the MLS® System – all sales are recorded and treated equally,” says Ann-Marie Lurie, CREB®’s chief economist.
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.”
Kay initially returned my emails but stopped when I asked him directly for his “317.”
“When pressed for hard numbers, he doesn’t respond”
The methodology by which Ross Kay has invented his secret frankenumbers is, as far as I can tell, known only to him. He’s all too happy and quick to dish out vague allegations but when pressed for hard numbers, he doesn’t respond. He’s critical of CREB’s data, yet won’t disclose his method of collecting data, or the data itself. The media has been giving him a free ride with no hard questions.
As Garth said in the title of his blog posting, “Who can you trust?
My emails to Ross Kay requesting the info are reprinted below:
Oct 1: Are you going to provide this information so we can see what we’re missing? I’ll take you at your word that it is for anyone to read. My readers are waiting. I’d rather that I have all the information so I can provide to my readers a proper and well-informed comment.
Sep 30, 2013: It’s easy to solve this issue. Could you send me a copy of the audit so we can all comment intelligently on it? It would be enlightening to know what we are overlooking.
Sep 28: You can put this controversy to rest by furnishing MLS numbers or addresses of the supposed 317 “private” sales that sold in Calgary for August. There’s nothing to hide, and there is no proprietary information if it’s already on MLS.
Posted in Greater Fool, Ross Kay
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