Monthly Archives: May 2010

A brief glance at the stats will reveal that while prices are up both month-over-month and from last year, sales have slowed down. Is this a temporary shift? Has the pulled-forward buyer demand now been satisfied resulting in a slowdown for the rest of the year? Or is this a momentary seasonal blip before buyers resume purchasing?

One thing is for certain, this May is shaping up to be the 3rd lowest in terms of SFH sales levels for the past 10 years. Only in 2000 & 2008 were sales lower MTD.

Looking forward slightly, the SFH pending numbers reinforce that buying intention is down year-over-year.

The new home market is experiencing the same pullback.

According to Norm Mross, past-president of the Canadian Home Builders’ Association-Calgary Region and CEO of Trico Homes, sales have pulled back recently.

“There has been a slowing trend over the past month,” he says. “Uncertainty appears to be creeping into the picture again.”

The problem is that many builders are seeing traffic through show homes slowing down.

Mross’s comments come in the wake of the monthly report from Canada Mortgage and Housing Corp. which says construction starts of single-detached housing in and around Calgary soared to 642 in April compared to 234 for the same month a year ago.

“Those starts are a reflection of strong sales earlier in the year,” says Mross. “I wish things were still as strong now.”

The slowing in traffic and sales appears to have started right around April 19 when mortgage changes went into effect — and about the time the Bank of Canada moved to increase mortgage rates.

“I think what is happening now is a combination of factors — rates, new rules and the MLS market where people need to sell their existing home before buying new,” says Mross.

Mr. Mross, CEO of Trico, goes on to say:

Maybe people considering purchasing a new home should review their decision not to buy right now.

“Somehow, they have to understand that this is still a good time to buy a home. Prices aren’t going down and rates — despite the recent increases — are still historically low,” he says.

(Source: Calgary Herald, May 22, 2010)

Whether the above statement was influenced by the fact that one of the priciest building permit approvals this year was by Trico homes, ($4.2 million for an apartment block in its Milano development in Panorama Hills) we can only speculate.

Time will tell which direction prices are headed. Resale SFH inventory continues to creep up, now sitting at 39% higher than this time last year. Will sellers acquiesce and lower prices to move their home, or will they simply take their home off MLS and wait for a more palatable market?