Monthly Archives: July 2009

HPI – Calgary Prices Still Dropping in May

House Price Index

 

 

The House Price Index continues to paint a slightly different picture than what MLS stats are showing for the Calgary market.  In May 2009, MLS statistics showed that Calgary SFH prices increased by 2% from the previous month, and down 9% from May 2008.

However, the HPI, based on sales pairs, show that prices actually decreased 2.2% from April, and 12.2% from the previous May.  Calgary prices have been correcting since August 2007 and are now down 15.2% from their peak of that month. The Calgary index has shown monthly declines in 18 of the 21 months posted since then, including 11 months in a row from last July through May.

Of the six constituent metropolitan-area indices, four showed monthly rises in May – Halifax (1.3%), Montreal (1.5%), Toronto (2.0%) and Ottawa (0.7%). For both Halifax and Montreal it was a third consecutive monthly increase. The Ottawa monthly rise came after six consecutive declines, the Toronto monthly rise after eight consecutive declines. Calgary and Vancouver continued to correct downward in May, each showing an 11th straight monthly decline.

Four of the six city indices were down from a year earlier – Vancouver (−11.8%), Calgary (−12.2%), Toronto (−6.5%) and Ottawa (−0.1%). Montreal stands apart as the only market that has yet to show a 12-month decline. Halifax has shown 12-month declines in only two months, February and March 2009.

Canadian home prices in May were down 6.9% from a year earlier, according to the Teranet-National Bank National Composite House Price Index™. It was the sixth consecutive 12-month decline. The index is now down 8.9% from its peak of last August. However, its run of eight straight monthly declines ended in May with a 0.7% rise from April.
Source: Housepriceindex.ca

Source:  National-Teranet House Price Index

Source: National-Teranet House Price Index

Note:  The HPI lags by almost two months which is why May’s numbers were just released today.

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Mid-July Market Update (2009)

It looks as though seasonal forces are slowly coming into effect as the sales pace slows from last month, but is still shaping up to be the busiest July since 2005.

Like last month, sales are up YoY while prices are still lower.   Looking ahead for the rest of July and based on pending sales, it seems there will be the first month-over-month declines in both average and median price in 2009 for Single Family Homes.  Condo prices are looking to remain fairly steady to June’s month-end numbers (click here for month-to-date MLS stats)  

Here is the breakdown for pending sales as of today.  Remember to apply the current 97% LP/SP ratio to get a rough estimate at what those pending numbers will end up as.

SFH Pending: 412
Pending Average: $436,159
Pending Median: $389,950

Condo Pending: 229
Pending Average:  $303,443
Pending Median:  $279,900

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Inventory (or lack of) was becoming a concern heading into July, but lately SFH levels have settled at around 3400 – at least for now.

SFH Inventory

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Mike Fotiou is an Associate Broker with First Place Realty
Accredited Buyer’s Rep, Certified Condominium Specialist, and Commissioner for Oaths in the Province of Alberta.

Sales Pace Slows From Last Month, Up YoY (July 1-7, 2009)

Calgary Sales

Calgary Stampede attendance is down from last year partially because of subpar weather, and partially – well, it could also be blamed on Calgarians being to0 busy looking for homes. ;-)

The first week of July recorded a total of 336 SFHs and 130 Condo sales, up from last year.   However, the pace has dropped off from June when 377 SFHs and 148 Condos sold in the first week.  Prices remain down year-over-year despite increases in 2009.

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Toxic Drywall in Calgary?

MadeinChinaProblem Overview: “The issue of toxic Chinese drywall may well become the biggest environmental crisis to hit North American homeowners and builders in decades.”

Who is affected?

Hundreds of millions of sheets of the defective drywall were imported into the United States between 2001 and 2007. It has been reported in as many as 14 states, and may have been used in an estimated 100,000 renovated and newly-built homes, with up to 40,000 in Florida alone.

In addition, an estimated 929,000 square metres arrived in Canada through Vancouver in the same period.

Much of the product imported into Canada was used in the lower B.C. mainland, but some may have reached the Prairies and as far east as Toronto (Source)

Does this pose a health hazard?

The Toronto Star article (sourced above) reports: “The defective Chinese drywall emits toxic hydrogen sulphide, sulphur dioxide and other gases. It is believed that humidity in the air causes the sulphur in the drywall to off-gas, or migrate into the indoor air. This creates a noxious odour, and can result in serious health conditions and illnesses, such as breathing problems, eye irritation, fatigue, dizziness, insomnia, sore throat, bloody nose, and headaches.”

Remediation Methods?

Houses built or renovated with contaminated Chinese drywall cannot be repaired. The only possible fix for affected homes is to have the owners move out for several months, gut the house and rebuild the interior. Anything inside the house that may have been contaminated by the sulphur gases will also have to be destroyed and replaced.

Industry watchers have estimated that as few as three sheets of drywall in a house can be enough to contaminate it to the point of making it uninhabitable – Toronto Star

Self-Assessment Guide
Florida’s Division of Environment Health has put together this self-assessment guide.

1) Odors Does the home, or certain rooms have either a sulfur-like odor or other unusual odors? If there is a “rotten-egg” like odor or “sewer-gas” smell, verify that they are not from the home’s water, or a sewer problem. Sometimes sulfur odors can be noticed from water heaters that have sat unused for a long time.

2) Recurring and costly A/C Problems. Have there been repeated failures of the A/C evaporator coil (located in the air handler unit)? This type of failure is due to a black corrosion of the coil resulting in leakage of Freon from the system, making it impossible to cool the home, requiring replacement of the coil. Many of the effected homes have had to replace their AC coil numerous times and the coils last two years or less instead of the normal 10 to 20 years.

3) Corrossion of metallic surfaces in the home. If you cannot see your AHU’s compressed Freon Line, other signs of metal corrosion may be observable. Look around the home for corrosion on other copper and metal surfaces.

Corroded Shut-off Valve

Corroded Shut-off Valve

Normal Shut-off Valve

Normal Shut-off Valve

4) Drywall Made in China. Identifying drywall made in China may be the most difficult and possibly inconclusive. This requires cutting holes in walls to find printed markings on the back side of drywall that says ‘Made in China.’ Finding those markings are not guaranteed. Homes can have drywall from multiple manufacturers, American and imported. Should you have the odors described in step one and notice they are strongest in a particular room of the house, you should consider hiring a building inspector, contractor or other building professional look in that room first. It is possible that the imported drywall was installed on the ceiling. You can look under the insulation in your attic space for the markings. . The pictures below are markings typically found on drywall made in China

Made in China

Made in China

Imported drywall with "Knauf Tianjin" markings

Imported drywall with "Knauf Tianjin" markings

5) Hire a professional inspector to confirm the presence of corrosion on Electrical Wiring or A/C Coils You should hire a licensed electrician to inspect your home’s electrical system. An inspection of the home’s electrical wiring should reveal normal copper color on the un-insulated ground wires located in the main breaker panel, in light switches, and in electrical outlets around the home as depicted in the image on the left. Should the electrician find black corrosion as seen in the image below, that is a strong indicator of the corrosion often seen in homes with Chinese drywall.

Corroded Wires

Corroded Wires

Normal Wiring

Normal Wiring

I contacted one home inspector and they’ve said they’ve been on the lookout for it in Calgary for a few months but haven’t seen any Chinese drywall yet.  CREB will be monitoring the issue as well.

Sources:
Chinese Drywall Under Study in US - CBC News, June 3, 2009
Chinese Drywall Creating Crisis, Toronto Star, June 20, 2009
Drywall has China Defensive, Herald Tribune, April 25, 2009
US Senators Call For Chinese Drywall Probe, Asia Times, June 24, 2009

Mike Fotiou
Associate Broker
First Place Realty

June 2009 – Calgary Real Estate Review

CREB has released June’s statistics package:  click here to view

June Stats at a Glance

  • SFH sales are up 16% from last month to 1837.   This is an increase of 28% from June 2008 (1439)
  • SFH average price is up 2% from last month to $447, 142.  This is down 6% from June 2008 ($436,427)
  • SFH median price is up 2% from last month to $399,000.  This is down 2% from June 2008 ($408,000)
  • Condo sales are up 13% from last month to 738.  This is an increase of 33% from June 2008 (556)
  • Condo average price is up 4% from last month to $285,595.  This is down 9% from June 2008 ($315,042)
  • Condo median price is up 4% from last month to $265,500.  This is down 6% from June 2008 ($282,000)
June 2009 Prices

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Inventory levels continue to fall.  The peak month-end inventory for SFH so far in 2009 was 4369 back in March.    In all of 2008, only two months had less than this years peak:   January 2008 with 3997 and December with 3860.

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As inventory falls month-to-month, sales continue to rise.   The market has shifted speedily to the edge of a Balanced/Seller’s market.  (1.9 Months for SFH, 2.4 for condos)

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