January 1-21, 2015 Calgary Real Estate Market Update

bear  Sales have decelerated further from not only a year-over-year comparison, but in relation to 2010-2013 as well.  The 513 sales so far this month are on pace for the second lowest January level in over fifteen years.

bull Month-to-date sales are 32% higher than they were in 2009 during the same period.

bear  That’s not much of a bullish argument.

bull I don’t have much to work with here.

Calgary sales January 21 2015

Calgary home sales, January 1-21, Y/Y comparison

bear  Citing low oil prices, the Bank of Canada surprised the market by cutting the overnight rate by 0.25% yesterday and specifically mentioned Alberta’s housing market:   “The oil-price shock will also affect housing activity in energy-intensive regions. There has been a decrease in housing starts and a sharp drop in resales and sales-to-listings ratios in Alberta in December. Near-term housing activity elsewhere is expected to remain high, supported by very low mortgage rates, although the extent to which the downturn already evident in Alberta will spill over into other regions remains to be seen.” (Source)

Sales to new listings ratio - January 21 2015

bull The Bank of Canada’s move is good news for variable rate mortgage holders. Fixed rates may come down too, although as of this morning the banks haven’t trimmed their prime rate in response.

bear What good are low mortgage rates if people are losing their jobs?  Economists are predicting job losses, with companies like Shell & Suncor already shedding workers.

bull December’s labour report for Alberta was surprisingly upbeat with 5,700 jobs added (SA) last month and “even more curious about the job numbers is that jobs were stable in the oil and gas sector.” (Read report)   Admittedly, January’s report will likely be far different.

bear  An average of about 100 homes a day have been listed this month, the third highest level month-to-date for January over the past decade.

New Listings - Jan 21 2015

New Listings, Jan 1-21, Y/Y comparison

bear At this pace, month-end inventory will cross north of the 5,000 mark, making it the 3rd highest January level since 2006.    High inventory, low sales: too early to expect the benchmark price to be affected significantly this month but if this market imbalance persists, we’ll see price deflation.

Active Listings - Jan 21 2015

January Month-End Inventory Levels, Y/Y comparison

Calgary luxury sales January 21 2015

Calgary luxury sales, January, Y/Y comparison

Calgary real estate stats summary, Jan 1-21, Y/Y comparison

Calgary real estate stats summary, Jan 1-21, Y/Y comparison

Calgary Repeat Home Sale Prices Post Largest Monthly Drop Since 2013

Calgary’s nation leading annual increase of 8.3% year-over-year in December belies what’s been happening over the near-term.

“While the cities of Calgary and Edmonton closed out 2014 with solid year-over-year gains, the recent plunge in oil prices is likely to temper housing activity in these markets this year,” writes TD Economics.

Month-over-month, Calgary repeat home sale prices fell -1.1%.  Monthly declines during the winter months aren’t alarming in themselves as Teranet’s index is not seasonally adjusted.  However, the one percent drop is Calgary’s largest monthly backslide since February 2013 and the second straight decline.

Month-over-Month Percent Changes

Month-over-Month Percent Changes

CREB® Calgary Real Estate Forecast For 2015

CREB® is forecasting that housing sales will ease by -4% in 2015, due to market uncertainty and changes in economic climate, while prices are expected to remain relatively stable with a modest increase of 1.58% on an annual basis.

A Look Back

How accurate was CREB®’s 2014 forecast from last January?  It might be a surprise to some that the real estate board underestimated the strength the market would experience in 2014.

The benchmark price was predicted to increase 4.28%, but prices increased over double that amount: 9.85%.

CREB® expected City of Calgary sales to total 24,335 in 2014, but actual sales were 25,664.

However, more new listings came onto the market than was forecast.  The prediction for 2014 was 32,703 and the year-end result was 36,329.

January 1-7, 2015 Calgary Real Estate Market Update

bear  Calgary home sales in the first week of January are off by -20% year-over-year.   Only 128 homes have sold compared to 160 during the same period a year ago.   It’s the slowest start to the year since 2009 when the financial crisis was in full swing.

bull 2014 was an exceptionally strong year for sales with the condo sector even setting an annual record, so any y/y comparisons will appear poor in a market that’s expected to cool down this year.  Sales are inline with 2010, 2011, 2012 and 2013 levels.

Calgary sales January 1-7 2015

Calgary sales January 1-7, Y/Y comparison

bear New listings month-to-date are already up 17.39% y/y… Here comes the flood of inventory.

bull Yes, up 17%…compared to a decade low.  New listings are actually down -12% from the historical average to start the year.

Calgary New Listings - Jan 7 2015

Calgary New Listings – Jan 1-7, Y/Y comparison

bear The average price is down almost -5% y/y.   And there have only been 3 luxury sales so far.  There was 8 by this time last year.

bull You just explained the reason for the average price being down.   The median price is up 1.58%.  In either case, it’s much too early to be looking at prices with only a week’s worth of sales.  With low sales volumes or a different sales mix, the average price especially – and even the median – can be skewed.

Calgary Luxury Home Sales - Jan 7 2015

Calgary Luxury Home Sales, Y/Y comparison

bear Oil prices are below $50 per barrel and falling.  House prices are next.

bull There’s no doubt that oil prices will impact Alberta’s economy.  ATB is predicting GDP growth to drop by half, migration into the province to fall from 75,000 to around 60,000 this year, and a softer labor market.  But to think that house prices move lockstep with the price of oil without consideration for other factors would be wrong.  Case in point: house prices began falling in 2007 while the price of oil surged even higher for another year.

Calgary House Prices, Oil Prices

Calgary House Prices, Oil Prices

Calgary Real Estate Stats: January 1-7, 2014

Calgary Real Estate Stats: January 1-7, Y/Y comparison

Calgary Leads Nation In New Home Price Annual Growth

Calgary once again posted the largest year-over-year new home price increase in Canada according to the latest NHPI report released by Statistics Canada today.

New home prices for Calgary were up 6.5% on an annual basis.  Between October & November,  prices rose 0.3% with builders citing market conditions, higher material and labour costs as well as higher land prices as the reasons for the increase.

Calgary New Home Price Growth Tops Nation

Calgary New Home Price Growth Tops Nation

Calgary price growth accelerated to a 2014 high of 7.5% in April & May before gradually slowing over the next few months with y/y increases of: 7.3%,  6.9%,  6.8%,  6.5%, 6.6% and finally the most recent reading of 6.5% again.

Annual Percent Growth Decelerating At The End of 2014

Annual Percent Growth Decelerated During the Second Half of 2014

New Housing Price Index, Canada, November 2014

New Housing Price Index, Canada, November 2014 (click to enlarge)

Chestermere Real Estate Market Report: December 2014 & Year-End

Once just a summer village, Chestermere officially became a city on January 1st. A celebration will be held on Saturday, January 24th at Chestermere’s annual Winterfest. More details are provided on the city’s website here.

December is historically a slow month for real estate in Chestermere.  Only 18 homes sold during the month, however that was good enough for the best December since 2001.

Sales in 2014 totaled 441, a new annual record and a 35.69% increase year-over-year.

The year-end average price increased 7.32% from $471,107 to $505,587, while the median was up 7.83% from $460,000 to $496,000.

Unlike Calgary and Airdrie, year-end inventory remained static with only 5 additional homes on the market compared to the previous December.

Chestermer Sales - Dec 2014

Chestermere Sales, December Y/Y comparison

Chestermere Annual Sales - 2014

Chestermere Annual Sales

Chestermer New Listings - Dec 2014

Chestermere New Listings, December Y/Y comparison

Chestermere Inventory December 2014

Chestermere Inventory: December Y/Y comparison

Chestermere stats December 2014

Chestermere real estate stats: December 2014 & Year-End

Airdrie Real Estate Market Report: December 2014 & Year-End

Airdrie home sales increased 10.34% year-over-year in December, capping off a fantastic year for the city’s real estate market.

Annual sales totaled 1,695 – a record high and a 28.31% increase from 2013.

The average price for the City of Airdrie increased 8.49% in 2014 to $387,103.  The median price was up 9.3% to $388,000.

Like in Calgary, new listings spiked.  Eighty properties were listed in December which is a peak for the month.  Year-end inventory increased 49% to 170 but remained the 4th lowest level to start a year in the past decade.

Airdrie December sales

Airdrie December sales

Airdrie Q4 2014 sales

Airdrie Q4 2014 sales

Airdrie Sales 2014

Airdrie Year-End Home Sales

Airdrie 10 year prices

Airdrie historical real estate prices

Airdrie December new listings

December New Listings

Airdrie Inventory

Airdrie Inventory

Airdrie Real Estate December 2014

Airdrie Real Estate Stats: December and 2014 Year-End