March 1-7, 2010 Calgary Real Estate Stats

Posted on March 8, 2010 | 5 Comments

Here’s a quick update for the first week of March with YoY comparisons on a day-to-day basis:

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CONDO

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5 Responses to March 1-7, 2010 Calgary Real Estate Stats

Mike but not mike F | March 9, 2010 at 3:00 am |

A MUST READ: http://www.canadianbusiness.com/shared/print.jsp?content=20100315_10019_10019&adZone=managing/strategy&pubZones=/content/MANAGING/MANAGING_SHARED_HEADER_SPONSOR_AD_HTML.jsp|/content/MANAGING/MANAGING_SHARED_SIDE_AD_HTML.jsp

“More than two centuries ago, the economist Adam Smith produced his landmark tome, An Inquiry into the Nature and Causes of the Wealth of Nations, in which he wrote, “a dwelling-house, as such, contributes nothing to the revenue of its inhabitant.” The father of modern economics placed housing in the same category as clothing and furniture — useful consumer goods that do not generate wealth. For the homeowner, a house is a “part of his expense, and not of his revenue.”

“”If you’re going out buying a home today, understand that you’re not following the doctrine of buy low and sell high,” Rosenberg says. “You’re doing the exact opposite”

“Housing has undergone painful corrections in the past. The current crop of homebuyers is likely too young to remember the housing bubble that burst in 1981, and the slow recovery that followed. According to data from the Centre for Urban Economics and Real Estate at the Sauder School of Business in B.C., the average real home price in Vancouver took more than 10 years to get back to its peak, before dipping again in the mid-1990s. Calgary fared even worse. Home prices didn’t return to 1981 levels until the first quarter of 2006. Toronto homebuyers experienced a similar pain when a speculator-driven bubble burst around 1989. In real terms, prices didn’t recover until 2007.”

Mike
Will | March 9, 2010 at 11:17 am |

Interesting charts. Do you have an opinion as to what this all “means” in your mind?
Mike Fotiou | March 9, 2010 at 11:52 am |

Will, I was hoping to withhold any commentary as I would probably end up being lambasted by those with opposing viewpoints

So how about I present two viewpoints and you can pick which you prefer:

Viewpoint #1: Any year-over-year comparisons for these early months are hugely exaggerated since consumer confidence was still waning, and Canada was in a recession at this time in 2009. With higher interest rates & tighter lending conditions looming on the horizon, it’s only to be expected that the last of the greater fools stampede headlong into the spring market. Inventory is increasing at a higher rate than previous years, and with home builders ramping up new inventory, we’re in for a severe inventory glut if the sales to new listings % don’t keep pace.

Viewpoint #2: Sales continue to increase year-over-year as consumers shake off the worry of recession and their stock portfolios. With 1000 less SFH’s listed on the market than this time last year, supply is in check despite the recent increases. Pending sales show that buyer intention is still high as we approach the spring market. The tightened lending standards will ensure a stable future market as only those able to qualify at a 5 year rate will be purchasing, with most speculators being booted from the market. The inventory absorption rate is in “balanced” territory, ensuring a brisk, yet stable spring market.
Will | March 9, 2010 at 5:48 pm |

ha-ha – I like your dual viewpoint approach – very politically correct.

Speaking of the five year rate, has it been determined yet what that five year rate will be? The posted BoC or any banks?

I for one have two viewpoints as well (coincidentally very similar to yours…) and am not too rushed to “jump in” until I find the right place.

I don’t think that if it’s any bank’s posted rate, there would be much additional demand because of the changes…
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Mike Fotiou says: It’s posted rate. Canadian Mortgage Trends has an article here
Will | March 10, 2010 at 10:47 am |

So that rule change really doesn’t do squat, except “force” people to take a 5 year fixed term, at whichever rate the bank is offering?

Doubt that’s going to have any effect at all on the affordability, especially since everybody was already getting a five year term anyway (according to CMHC).

What do you think, Mike?

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Mike Fotiou says: I tend to agree. And I don’t mean to keep referring you to Canadian Mortgage Trends, but they have a good example about this very point here.