Monthly Archives: January 2009

Metro-Calgary Price & Sales at mid-January 2009

Posted on January 16, 2009 | 7 Comments

Below are the year-over-year comparisons for Sales, Average and Median Prices, for Single Family Homes and Condos in Metro-Calgary.  

SFH average price remains virtually unchanged from December’s month-end, thanks in part to a $2.7M sale yesterday which bumped the average from $404,124 to its current $418,563 (December’s month-end: $417,398)  The median is unchanged at $380,000.

Condo average is down about $3800, with the median down $14,000.

The average price can fluctuate wildly day-to-day now because of the low amount of sales.

Single Family Homes

Condos

 

CREA’s New Weighted Average
Financial Post: December 15, 2008

On December 17th, I sent Gregory Klump (CREA Chief Economist)  and Bob Linney (Communications Director) emails regarding the new weighted average CREA uses, and just wanting an explanation why this was introduced now. If the weighted average was incorrect with prices declining, then it was incorrect all these years prices were increasing as well. I’m still waiting to hear back, and if I do, I’ll relate why they decided to introduce the new weighted average just recently.

Chestermere

There have been 3 SFH sales midway through January.  There are still 133 active listings with 40 of them being either new construction and/or vacant.

Airdrie

Airdrie has recorded 11 SFH & 5 Condo sales thus far in January, with an inventory of 250 and 54 respectively.

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Have You Tuned Into CREN®TV Yet?

Posted on January 9, 2009 | 5 Comments

CREN®TV began airing on Channel 90 on Shaw Digital Cable last month (December 2008)  The majority of the show consists of real estate advertisements.

“Our slot is from 5:30 p.m. to 6 p.m. In that format we have half an hour, but the bulk of it will be actual real estate advertisements. Then we have an opportunity to provide a current perspective on the real estate market in Calgary; and included in that, promoting the value of using a REALTOR®. There are so many challenges about buying homes it’s important the public is aware of the expertise REALTORS® bring to the equation,” explains Joanne Fiest, CREN®TV and web coordinator.

You can also watch the show online at:  http://www.cren.ca/crentv

I’m curious -  How many of you have tuned into the show?

Do you prefer to get your real estate information in print, online, or on TV?   If you were looking to buy a home, would you watch the half hour program, updated weekly?

I appreciate any feedback you can provide.

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Question Box: What is a Subject to Sale Clause?

Posted on January 8, 2009 | 5 Comments

A Subject to Sale clause or Special Clause Sale is simply when the Buyer puts an Offer in on a property, but the Offer to Purchase has the condition that the Buyer first needs to sell their home.

If the Seller accepts an Offer with that condition, the listing remains active on MLS, and will continue to be marketed by the Listing Agent.  The status does not change to Pending or Conditionally Sold.  However, the remarks field of the listing must note that there is a “Special Clause in effect” or “Subject to Sale Offer”, as well as identifying the length of the notice (i.e. 24, 48, or 72 hours)

If the Seller receives another Offer on their property, the Buyer is notified that they have 24, 48, 72 hours (or whatever time frame was agreed upon in the Contract) to waive their Subject to Sale clause and proceed with the purchase.  If the Buyer does not, or is unable to waive the condition, the Seller can then accept the new Offer after the specified time has elapsed.

No other terms or conditions of the Subject to Sale Clause may be disclosed to any other subsequent potential Buyers making a Purchase Contract.

Sellers need to think about several things before deciding whether to accept an Offer with a Subject to Sale Clause:

  • What is the likelihood of the Buyer’s home selling?  Is it priced properly?   How long has it been listed for?  etc. 
  • Some buyers might be turned off by seeing a home with a Conditional Offer on it.  They might not want to compete with another buyer when there are ample properties on the market.
  • In a slow market, it might be good to “lock-in” a potential buyer at today’s market value, and hope that their home sells soon as well.

There are advantages and disadvantages to this type of Conditional Offer that varies dependent on your situation and the current marketplace.

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December 2008: Calgary Real Estate Market Review

Posted on January 5, 2009 | 6 Comments

 The mercury wasn’t the only thing low in December.  Calgary real estate sales have fallen even further below November’s lows for Condos and Single Family homes.   December is a seasonly quiet month, but as you can see in the numbers and charts below this December had been much slower.  Are these numbers a harbinger of things to come or just an uneasy respite before spring?    

Singe Family Homes (SFH) recorded 449 sales, down from the 670 that sold last month, and down 47% from the 846 transactions of last December (View more indepth Calgary stats here on FindCalgary.ca)    The average price was $417, 398, down 6% from Dec ’07, while the median dropped 7% from last December to $380,000.  

Condo sales faired similarly, registering 205 sales, compared to the 284 sales of November and the 393 sales of December 2007.   The median price regained some ground from November, up to $254,000, but still lower than December 2007′s median of $286,000.   Condo average price was $274,919, down from last December’s $304,719

Long-term December Calgary Real Estate Stats

Long-term December Calgary Real Estate Stats

Asking VS Selling Price

Calgary SFH: Asking VS Selling Price

December’s Average List Price to Sale Price ratio was 95.37% for SFH’s and 94.65% for condos in metro-Calgary.   Remember, this is using the List Price at the time the property was sold, not what is was originally listed at prior to any subsequent reductions.

Calgary SFH DOM

Calgary SFH: Days on Market

 For a closer look at the accuracy of the Days on Market stat, read this blog article.

Calgary SFH Sales to Active

Calgary SFH Sales to Active Listings %

 

Calgary SFH Sales to New Listings

Calgary SFH: Sales VS New Listings

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2009 Property Assessments

In the upcoming days, homeowners will be receiving their 2009 Property Assessment notices.

According to the City of Calgary press release: “As a result of the 2009 property assessment, Calgary’s city-wide typical residential market value change is -4% compared to increases of +25% in 2008 and +43% in 2007.”  You can also view your 2009 Assessment online at the City of Calgary’s website (www.calgary.ca)

However, since these new assessments reflect the market value of the property as of July 1, 2008 they are not a very effective tool to use in determining the market value of your home today.  In our current volatile real estate market, a lot has happened in the six months from which the assessments are based on.

For a more accurate look at what your property is worth in today’s market, contact one of your local Calgary Realtors®.

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Confessions of Chief Economist (USA)

As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he’s abandoned what he calls the ‘positive spin’.

“I worked for an association promoting housing, and it was my job to represent their interests,” he says.  “If you look at my actual forecasts, the numbers were right in line with most forecasts. The difference was that I put a positive spin on it. It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst. “   Read more of the interview here (CNN)

Update: January 12, 2009 – Wall Street Journal
Realtor’s Former top Economist Says Don’t Blame the Messenger

Perhaps spokesmen north of the border can take that experience to heart before making certain assertions?(Financial Post January 5, 2009 – Canadian homebuilders deny market headed for meltdown)

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$10,000 contest
Win $10,000 with First Place Realty!

 Buy OR Sell with First Place Realty in 2009 and you can win **$10,000**.    This contest is open to all adult, legal residents of Canada who are of at least 18 years of age prior to December 20th 2009.   The entrants must have purchased or sold a property/business/lease through an eligible First Place Realty Associate between 12:01AM – MST on January 1st, 2009 and 9:00pm – MST on December 2009.   Contact me for more details.

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Mike Fotiou, First Place Realty, is a licensed Realtor, Certified Condominium Specialist, Accredited Buyer’s Representative and Commissioner for Oaths in the Province of Alberta.  If you are thinking about buying or selling real estate in Calgary, Airdrie, or Chestermere,  feel free to contact me

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2009: Spring Bounce or Spring Trounce?

Posted on January 2, 2009 | 3 Comments

bounceortrounceWhile we’re waiting for CREB to release December’s official statistics package, I wanted to discuss the situation that will be unfolding in the next few months.  

First, I’m hearing/reading comments such as, “Even with the low sales, if supply stays down over the next few months, we will achieve a balanced market by early spring or summer,” and “inventory is being slowly whittled away.”

That would be all well and good if the inventory was actually being absorbed, but it isn’t.

Single Family Homes:  Month-end inventory for October was 5522.    In November and December we had 1119 sales total, however our inventory is down almost 1700 during that same period.  (Currently there are 3854 active)   All those houses haven’t been pulled indefinitely off the market – you can rest assured the majority will be relisted in the next few months.

In May 2008 we hit a peak level of homes for sale in Calgary.   SFH’s reached a month-end amount of  7099, condos at 3308.    Can those levels be reached or surpassed this year?

Metro-Calgary SFH Month-end Inventory

Sept 2007:  5562
Oct 2007:  5517
Nov 2007: 4984
Dec 2007: 3364
Jan 2008: 3997
Feb 2008: 4985
Mar 2008: 5957
Apr 2008: 6881
May 2008: 7099
Jun 2008: 6543
Jul 2008: 6038
Aug 2008: 5541
Sept  2008: 5387
Oct 2008: 5522
Nov 2008: 5083

Notice the similarities nearing the end of each year.  Inventory always drops off  at the end of the year. (read more…)   December & January have the lowest inventory levels for the year – they will only go up from there. 

My blog article has more info regarding the “Correlation between Supply & Demand & Price in the Calgary Real Estate Market”

Variables to Consider:

  • Speculators & ‘Accidental Landlords’:   Will they relist this year, hoping for a better market or will they rent out their property?   If they rent their property, vacancy levels will rise.  Landlords will need to compete for tenants, resulting in lower rents.  
  • Owners testing the market:  How serious were the ones trying to sell during the year?  Were they fishing for a great price, but will remain in their homes if they don’t get it?
  • How many buyers that purchased new homes before this obvious downturn will be taking possession early this  year?    They will need to be priced aggressively or risk being saddled by two mortgages.
  • How many buyers were planning to use the HBP (The Home Buyers’ Plan lets a buyer withdraw up to $20,000 from RSPs for a home purchase) but have recently suffered substantial RRSP stock/mutual funds/etc. losses?
  • With 0 down/40 year mortgages done away with, how many buyers are simply unable to qualify for homes at their current price levels?
  • Builders have significantly scaled back their spec building.  This results in fewer jobs for framers, electricians, plumbers, cribbers, flooring (lino, tile and hardwood installers) drywallers, painters, stucco, roofing and siding installers, landscapers, on and on.  Trades will actually need to be competing for jobs again, resulting in lower costs.  
  • In addition to the above, how many people migrated to Alberta because of the abundance of construction work available?  How many will be moving back?   If they were renting, how much will this affect the city’s rental vacancy levels?
  • New construction – particularly condos.  According to CMHC, as of Oct 2008 there were 7411 new apartment + other units under construction.  What happens when these hit the already slow market?

If sales don’t improve to match the influx of  homes that will inevitably be listed this spring, the spring bounce will be a spring trounce for sellers.  If you need to sell, whether using a Realtor or by owner, you need to be priced very aggressively.   You need to stand out from the thousands of other properties that are already listed, and the more that will be listed in the next few months.

teranetTeranet National House Price Index  just released their October 2008 report.  From their release:  “Calgary home prices were down 7.5% from a year earlier. It was a fourth consecutive month of both 12-month declines and monthly declines. The Calgary index has been down from the previous month in 11 of the last 14 months, since it also declined in each of the seven months from September 2007 through March 2008.”

www.housepriceindex.ca. Click to enlarge.

Source: www.housepriceindex.ca

Since the index is compiled by using ‘sales pairs’,  any argument of  “the sales mix is different” – whether prices are going up or down – is no longer valid.     It’s just too bad it works on a 2-month delay, but at least Canada finally has a Case-Shiller like index.  :-)

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Mike Fotiou, First Place Realty, is a licensed Realtor, Certified Condominium Specialist, Accredited Buyer’s Representative and Commissioner for Oaths in the Province of Alberta

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