February 1-7, 2016 Calgary Real Estate Market Update

Next Monday, the newest mortgage rule changes come into effect requiring a minimum 10% downpayment for the portion of the house price above $500,000.   This has goosed Toronto’s real estate market further as buyers rush to purchase before the deadline.

The opposite scenario is playing out in Calgary.  Sales in the $500,000-$999,999 range were down -31% in the first week of the month, with only 66 homes changing hands compared to 96 a year ago.   Looming rule change or not, Calgarians have not been incentivized to buy.

Overall Calgary sales totaled 242, down -10% year-over-year. That’s the fewest sales to start the month dating all the way back to 1996.  Oof.

Calgary home sales - Feb 1-7 2016

Calgary home sales, Feb 1-7, Y/Y comparison

On a positive note, new listings are down -8% y/y and between the 5 and 10 year average for the month.  With 5,349 active listings, inventory is now only 3% above last year’s level.

Calgary new listings - Feb 1-7 2016

Calgary new listings, Feb 1-7, Y/Y comparison

CBC had an interesting article today on foreclosures: Jingle mail rears its ugly head in Alberta again; Federal government worried about Albertans making strategic defaults on their mortgages.

The CBC obtained this Alberta housing report from the Department of Finance through an access to information request; much is redacted: click to view pdf

Bearing in mind that the report was issued in August 2015 when the labour market was considerably better than now, the following excerpt is now especially pertinent:

“While weaker housing activity will affect prices, we believe that the potential for a significant price shock in Alberta will still largely be determined by labour market conditions.   However, up to May 2015 arrear rates in Alberta have remained near their lowest point since before the 2008-09 recession

Labour market weaknesses are especially relevant to Alberta’s housing market than other provinces’ since there is generally no legal recourse for uninsured mortgages with low loan-to-value levels in Alberta, in contrast to much of the rest of Canada.  These non-recourse mortgages could create incentives for some homeowners facing an income shock to pursue a “strategic default”, and thus place further downward pressure on prices.”

Here’s a quick Calgary summary as of today:

  • 85 foreclosures/judicial sales listed
  • 2 sold between February 1-7, both for a bit above asking
  • Bowness, LP: $575,000,  SP: $582,100
  • Hidden Valley, LP: $269,900  SP: $272,000
Calgary luxury home sales - Feb 1-7 2016

Calgary luxury home sales, February, Y/Y comparison

Sales-to-new-listing ratio - Feb 1-7 2016

Sales-to-new-listing ratio:  February 1-7, 2016

Calgary Real Estate Stats Summary - February 7 2016

Calgary Real Estate Stats Summary, February 1-7, Y/Y comparison

Top Performing Calgary Communities (January 2016)

Download the Calgary community stat summary for January 2016: click here

(click to enlarge)

(click to enlarge)

Historical Community Statistics

Historical statistics are now available at the community level going back to 2007 for monthly, or to 2004 by quarter.   You’ll be able to see how your neighborhood has been trending over the years instead of relying on general market statistics based on all of Calgary.

Calgary Zone Map (click to enlarge)

If you’d like January’s statistical report, please fill in the form below with your full name, email address and the community of your choice. This part isn’t automated, so please allow for some time for me to download the report and send it to you.

Contact me at 403-554-2284 or at mike@findcalgary.com when you’re ready to buy or sell real estate and I will be glad to assist you.

Calgary Luxury Home Sales Flat In January

Calgary’s luxury home market remained in the doldrums in January with only 24 properties selling for at least a $1 million with an inventory of over 400.

Sales-wise, that’s on par with the previous January and the 10 year average for the month.  However, it’s a -43% drop from the January peak set in 2014 when 42 luxury homes sold.

The highest sale price was $3,300,000 for an Elbow Park home which, according to the listing, was well below the $6.5m cost of land and construction.  It was originally listed in December 2014 for $8,898,000.

Elbow Park also had the most transactions with 3 selling during the month.

There are currently 3 judicial sales listed in Calgary on MLS® in the $1M+ range and are located in  Kelvin Grove, Discovery Ridge and Auburn Bay.

Looking at homes with previous MLS® sales in the past 10 years that weren’t teardowns, some sold for more than they were purchased for while others were sold at a loss:

 

Price changes from previous sales

Price change from previous sales

Any renovations undertaken between the two sale dates would need to be accounted for, but the above illustrates that market trends can vary even within the luxury segment depending on location, property type, and price range.

Calgary luxury home sales in January on par with previous year

Calgary luxury home sales in January on par with previous year

Calgary luxury home sales in January, Y/Y comparison

Calgary luxury home sales in January, Y/Y comparison

Correction: January 2016 Calgary Real Estate Report

As I was compiling the stats for the luxury home market, I noticed that the original January report released yesterday incorrectly had recorded a $4M+ sale in the Apartment category.

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Condo sale in the $4m+ range?

I re-downloaded the CREB® report today and it appears that the error has now been fixed which has resulted in the average price for the apartment segment dropping considerably, and enough to move the overall Calgary average price lower as well.

Corrected

Original vs Corrected version

The Apartment average price is now only $281,296 instead of $317,575.    That moves the year-over-year price change from a 3.69% gain to a -8.15% drop.

Overall Calgary prices were affected too.  The average dropped from $459,874 to $453,632 and the median from $409,000 to $408,250.

I’ve uploaded the corrected report in the earlier post, and you can also download it here pdf

January 2016 Calgary Real Estate Market Report

creb

Download CREB®’s January 2016 Report: click here pdf
(This is the corrected version. CREB®’s initial report inaccurately stated that an apartment sold for $4M+ which skewed average prices)

CREB® commentary: Housing market remains unchanged in January; Slow sales activity and inventory gains place downward pressure on prices

Calgary’s housing market is starting 2016 firmly in buyers’ market territory, much the same as last year ended.

“The recent slide in energy prices has raised concerns about near-term recovery prospects for the city,” said CREB® chief economist Ann-Marie Lurie. “Energy market uncertainty and a soft labour market are weighing on many aspects of our economy, including the housing sector.”

City wide, January sales totaled 763 units, 13 per cent below last year and 43 per cent below long-term averages. While new listings declined by 16 per cent compared to January 2015, the number of new listings far outpaced the sales, causing inventory gains. January’s city wide months of supply levels rose above six months.

“Selection for buyers in all product types and price ranges has improved,” said CREB® president Cliff Stevenson. “More choice and low interest rates have encouraged some potential buyers to start window shopping. So far, this hasn’t translated into sales activity as many are waiting for steeper price declines from motivated sellers.”

The aggregate benchmark price of $447,300 in January was 1.21 per cent lower than the previous month and 3.27 per cent below the January 2015 price of $462,400.

“As expected, the imbalance between housing supply and demand is continuing to place downward pressure on prices,” said Lurie. “However, the recent price retraction has not erased all the gains recorded in recent years, as the benchmark price remains 4.41 per cent above the January 2014 price of $428,400.”

While all property types have recorded price contractions from recent highs, the largest price declines have occurred in the apartment sector as this segment has had elevated months of supply since the second quarter of 2015.

The apartment benchmark price totaled $281,900 in January, a year-over-year decrease of 6.35 per cent and 2.12 per cent lower than the previous month’s price. In fact, apartment sector prices have once again fallen below the 2007 monthly high of $301,500.

The detached segment of the market continues to show variations depending on price range. The under $500,000 segment remains relatively balanced. However, recent trends are pointing to weaker sales-to-new-listings ratios in the $500,000 to $600,000 range of the market.

“Calgary’s housing market continues to face a wide range of challenges,” said Stevenson. “Sellers are reflecting on their expectations and considering all options available to them, given the dynamics of their specific market. In this environment, buyers have the opportunity to carefully consider their housing needs and make a decision based on their lifestyle and future goals.”

January 1-21, 2016 Calgary Real Estate Market Update

An Elbow Park home sold yesterday for $3,300,000 which bumped up the Calgary overall average price by $6000 to $454,319.  That’s a mere -0.07% or $335.00 below last years MTD price.

I’ve repeated ad nauseam that the average is not an accurate price measure, and the above illustrates how easily even a single sale can skew the average in a low sales environment.

According to the Elbow Park listing, the “Cost of land + construction totaled $6.5 million dollars + is being sold close to half price.”    It was originally listed in December 2014 for $8,898,000.

I found the private agent remarks amusing: “Minimally affected by 2013 flood only 5 feet in basement.”  For a home located along the Elbow, I suppose that 5 feet of water could be subjectively classified as being minimally affected, but yikes.

Overall Calgary sales are still very sluggish after 3 weeks with 452 transactions recorded: an -11.7% y/y drop and below the 5 & 10 year average by -25.8% and -34.2% respectively.

Calgary home sales - January 21 2016

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

The pace of new listings has calmed and is nothing like that surge we experienced last January.   A total of 1,887 properties have been newly listed, a -10.2% decline from the same period last year and right in between the 5/10 year average for this period.

Calgary new listings - January 21 2016

Calgary new listings, January 1-21, Y/Y comparison

There are currently 74 foreclosures/judicial sales listed in Calgary.  If you’d like to track them and their sale prices, fill out the form below and I’ll set you up on automatic email notifications.

Please note: I will be away from January 23-February 1st. If you sign-up during this time, I won’t be able to activate your subscription until after February 1.

Calgary luxury home sales - January 21 2016

Calgary luxury home sales, January, Y/Y comparison

Sales-to-new-listings ratio January 1-21 2016

January 1-21 Stats Summary

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

Calgary Repeat Home Sales Prices -3.8% Off Peak

The price of Calgary homes that have sold at least twice fell both on a monthly and annual basis in December according to the Teranet-National Bank House Price Index.

Prices fell -1.68% from November to December and were down -2.63% year-over-year.   Once again, it was the largest drop in the cities tracked by the index.

December marked the third consecutive month of declines for Calgary. Prices are now -3.8% lower than the peak from October 2014.

Vancouver, Toronto, Hamilton & Victoria led in price appreciation, with gains of 12.9%, 9.5%, 8.8% and 8.7% year-over-year.

National Bank economist Marc Pinsonneault wrote that “the collapse in oil prices has translated into house price deflation in Calgary,” and that he expects “a significant deceleration in the national house price index growth rate in 2016.”

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. All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005.

Teranet-National Bank House Price Index for Calgary

Teranet-National Bank House Price Index for Calgary

Teranet - December

Source: housepriceindex.ca