September 2015 Calgary Real Estate Market Report


Download CREB®’s September 2015 Report: click here pdf

CREB® commentary:  Prices ease as expected; Inventories rise as sales activity softens further.

Following four months of relative stability, unadjusted benchmark prices eased as expected in September to $456,100, a 0.26 per cent decline compared with last year.

Most of this aggregate moderation was due to price declines in the apartment sector brought on by higher-than-average inventory levels.

“Overall sales activity relative to new listings caused a softening in absorption rates, which resulted in inventory gains and ultimately placed moderate downward pressure on pricing,” said CREB® chief economist Ann-Marie Lurie.

Residential sales in the city totaled 1,448 units in September, well below typical activity levels for this time of year. Year-to-date Calgary sales remained below both the five- and 10-year year averages by a respective 10 and 26 per cent.

“Rising unemployment and persistent weakness in the local economy is impacting housing demand,” said Lurie. “However, unlike earlier this year when consumers were reacting to uncertainty, recent activity reflects current economic conditions.”

While all property types recorded a notable drop in the sales-to-newlistings ratio, both the apartment and attached segments saw the most significant declines. Ratios in both categories dropped to the 40 per cent range, while months of supply pushed up to 4.95 and 4.35, respectively.

In comparison, the detached category saw its ratio hover around 50 per cent in September and months of supply settle at 3.32.

Elevated inventory levels in the apartment segment, in particular, are the result of moderate listing declines relative to sales activity, noted Lurie. Year-to-date apartment sales have fell by 32 per cent, while listings have dropped by just seven per cent.

As a result, the apartment benchmark price totaled $290,600 in September, a 1.19 per cent decline over last month and 2.71 per cent below last year.

CREB® president Corinne Lyall said that while the apartment sector now favours buyers with added selection and attractive pricing, other factors will continue to play into purchase decisions.

“While the apartment sector offers more choice, not all units are created equal,” she said. “When considering apartment condominiums, it’s important to understand that the corporate and physical health of the building can also influence both buying and selling decisions in this type of market.”

Despite higher months of supply, typical home prices in both the detached and attached sectors remained relatively unchanged in September, totaling $517,200 and $357,000, respectively.

Although citywide inventory levels remained elevated compared to activity seen in the past three years, Lyall noted they still were well below highs recorded during the previous economic downturn in 2008/09.

“There is no question that we have seen a shift in our local housing market conditions, but it needs to be put in perspective,” she said.

Aggregate prices have eased by one per cent from the beginning of the year, a moderate correction when compared against the aggressive gains last year that averaged more than nine per cent, noted Lyall.

Calgary: Conditional Sales Will Be Reported Again Beginning October 1st

It was nearly four years ago that CREB® changed the listing rules allowing sellers to decide whether a conditional sale would be reported or left as ‘active’ on the MLS®.

Understandably, many buyer agents and their clients strongly disliked the adjustment.  I  won’t rehash it here, but you can read this December 2011 post for my initial reaction.

In August 2013, CREB® announced that the hotly contested non-reporting rule would remain in effect, citing RECA’s “very clear signal” that mandatory reporting was potentially putting our members at risk of sanction.

But now, effective October 1st, all listings that are conditionally sold will have to be marked as “Pending” (no more showings allowed) or “Under Contract” (showings still permitted).   There will no longer be confusion as to whether a listing is active or conditionally sold.

The reason for the change?

No Kidding!

No Kidding!

Essentially, we’re going back to how it was years ago (don’t try to fix what isn’t broken) but now sellers will have an additional form requiring signing.

From the Calgary Real Estate Board:

On Oct. 1, CREB® will introduce the MLS® System Listing Addendum– a new form designed to protect the integrity of the MLS® System, and improve the member and consumer experience.

Used in conjunction with the Exclusive Seller Representation Agreement or Contract for Posting without Representation, the addendum strikes the right balance between providing important details about consumer responsibilities when using the MLS® System, and ensuring consumers can provide timely and informed consent to the listing agent regarding these obligations.

The addendum will work in tandem with the updated Conditional Sale Disclosure Instruction form to reinforce integrity of the active listings category. With the exception of clause sales – those properties sold subject to the sale of another home – pending and under contract properties can no longer be listed as active effective Oct. 1.

Any existing listings that receive a conditional sale after 11:59 p.m. on Sept. 30 will be expected to use the new Conditional Sale Disclosure Instruction form.   Any sellers who refuse to sign the addendum or use the updated Conditional Sale Disclosure Instruction form as of Oct. 1 will need to be advised that their listing will be terminated.

One new form in exchange for preventing wasted time, confusion, and loss of  credibility?  I think that’s an excellent trade.

September 1-14, 2015 Calgary Real Estate Market Update

Last week’s “chill in the air” update wasn’t hyperbole.  It’s shaping up to be a frosty September for Calgary real estate.

Through two weeks, home sales backed off further in comparison to last year (-32.3%), the 5-year average (-15.9%), and the 10-year average (-13%).  If this pace continues, it will be the second slowest September in a over a decade.

Calgary home sales Sept 14 2015

Calgary home sales, Sept 1-14, Y/Y comparison

The overall sales-to-new-listing-ratio edged closer to buyer’s market territory, now at a cool 41.3% compared to 57.5% the same time a year ago.

Throughout this year, the pullback in new listings have countered the low sales and averted any significant price declines.  Keep an eye on new listings as the year-over-year gap has narrowed.  A month ago, new listings were down nearly -13%.   Today, the difference has shrunk to only -5.7%.

Winter Is Coming

Sales ratio Sept 14 2015

Sales-to-new-listings ratio, September 1-14, 2015

Calgary luxury home sales Sept 14 2015

Calgary luxury home sales, September 1-14, Y/Y comparison

Calgary New Listings Sept 14 2015

Calgary New Listings, Sept 1-14, Y/Y comparison

Calgary Real Estate Stats Summary -Sept 14 2015

Calgary Real Estate Stats Summary, Sept 1-14, Y/Y comparison

Calgary Repeat Home Sale Prices Unexpectedly Surge In August

Cities in Ontario and B.C. have been Canada’s hottest real estate markets of late, but Calgary took top spot in August with a surprising 3.9% monthly gain in repeat home sale prices according to the Teranet-National Bank’s House Price Index.

Calgary’s 3.9% increase month-over-month was the highest in the country, and the fourth largest increase for the city in 15 years.

Going back to 2000, Calgary’s Teranet index increased over 3.9%  on a monthly basis only 4 other times:

  • May 2006: 4.8%
  • Jun 20006: 4.3%
  • Aug 2006:  5.2%
  • Apr 2007:  4.8%

Since last month’s real estate activity was nowhere near the heady and booming days of 2006 & 2007, you may I understand why I find the 3.9% monthly increase suspect.

By comparison, the MLS® HPI for Calgary only had a 0.2% m/m increase in August.  Granted, Teranet’s HPI only deals with repeat sales.  Still…  I’m very interested in knowing what the Brookfield RPS data shows for Calgary; their August HPI will be out soon.

However, I’m not one to dismiss data just because it doesn’t align with my views, but I wouldn’t be surprised if we see a percentage drop for September as the Index has been see-sawing the past few months (and especially since other metrics simply don’t support that large a monthly gain)

  • -3.3% in May
  • +2.5% in June
  • -1.9% in July
  • +3.9% in September

Year-over-year, Calgary prices were up 0.7% and off the October 2014 peak by just -0.9%.

The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method

August 2015 HPI

August 2015 HPI

Year-over-year percent change

Year-over-year percent change

Month-over-month percent change

Month-over-month percent change

Calgary Teranet-National Bank House Price Index

Calgary Teranet-National Bank House Price Index

Alberta Mortgage Arrears Level Falls Despite Massive Layoffs

Over 12,000 Albertans have been let go in group layoffs since the start of the year, but it has yet to show up in mortgage arrears data compiled by the Canadian Bankers Association.

In June, the percentage of Alberta residential mortgages with payments behind by at least 3 months was 0.27%, unchanged from May and down from the 0.32% recorded in June 2014, or 263 fewer arrears year-over-year.

Across the country the mortgage arrears rate was up from the previous June in the Atlantic provinces, Quebec, Manitoba and Saskatchewan.  Along with Alberta, the mortgage arrears rate decreased in B.C. and Ontario.

Alberta residential mortgages in arrears

Alberta residential mortgages in arrears

Edmonton New Home Price Growth Outpaced Calgary In July

“[New] house price growth in Calgary has dropped off dramatically,” states the latest weekly economic review by the Alberta Treasury Board & Finance.

Calgary price growth has softened to such an extent that it was outpaced by Edmonton for the first time since May 2012 according to the New Housing Price Index released by Statistics Canada.

Edmonton prices were up 0.4% year-over-year in July, edging Calgary’s 0.3% gain which was the smallest increase dating back to January 2012.

From June to July, Calgary prices fell -0.3%, tied for the largest monthly decline in the country with the Kitchener-Cambridge-Waterloo region.

The trend in Calgary new home prices has been obvious, particularly since the start of the year with annual growth shrinking with each passing month.

Calgary & Edmonton annual price change

Calgary & Edmonton annual price change

Calgary New Housing Price Index

Calgary New Housing Price Index

NHPI chart

New Housing Price Index (NHPI) for Canada

September 1-7, 2015 Calgary Real Estate Market Update

Feel that chill in the air?  It’s seeping into Calgary’s real estate market as well.

It was another quiet start as overall sales remained below the 5 & 10 year average, but particularly for the Attached category which recorded the second fewest sales for the opening week of September since 2002.

Only 3 homes sold for $1 million dollars or above month-to-date compared to 14 a year ago and is ultimately the reason for the -10.17% annual drop in the average price thus far.   That’s the slowest September start for the luxury segment dating back to 2005.

New listings are just a smidge below the 5-year average (-1.5%) but the low sales have frosted the sales-to-new-listing ratio to 42% and closer to a buyer’s market.

The City of Calgary benchmark price annual growth has essentially flat-lined and posted the first back-to-back monthly decline since 2011.  I expect the slow but persistent downward price pressure to continue.

Calgary benchmark prices were down every so slightly for two straight months

Calgary benchmark prices were down y/y every so slightly for 2 straight months

Calgary home sales Sept 1-7 2015

Calgary home sales Sept 1-7 2015

Calgary luxury home sales Sept 1-7 2015

Calgary luxury home sales Sept 1-7 2015

Calgary New Listings Sept 1-7 2015

Calgary New Listings Sept 1-7 2015

Sales-to-new-listings ratio Sept 7 2015

Sales-to-new-listings ratio Sept 7 2015

Calgary Stats Summary Sept 1-7 2015

Calgary Stats Summary Sept 1-7 2015