Deluge Of Calgary Home Buyers?

There’s no denying the Calgary real estate market is performing admirably, but a “deluge of buyers” since the flood?  Hardly.

With a MTD comparison of two weeks, sales were almost exactly on par with last year.

Calgary Sales - July 14 2013

Sales have also been gradually trending lower as is generally the case as we transition between spring and summer.

2 Week Sales

Weekly Sales

Ann-Marie Lurie, our chief economist here at CREB, said there is no way of confirming the number of flood victims who are purchasing other homes while they await remediation of their current home.

“While many of these affluent neighbourhoods likely have a portion of residents who can simply purchase another home, I would expect that the majority of impacted homeowners are not in this situation because they don’t have the financial resources to do so,” she said. “However, for those renters who were impacted by the floods, this may have pushed up their ownership decisions, and is likely supporting some of the rise in housing demand.” (Source)

How about this:

“Multimillion dollar homes that would ordinarily take a year to sell are being snapped up for about ten per cent more than they normally would within a matter of weeks”

There have been 10 multi-million dollar home sales so far in July, but none have sold above list price. Furthermore, all of the homes were listed before the flood with a minimum 24 days on market.

Month-to-date the average days on market for a sold luxury home  ($1M+) is sitting at 86 days.  Last month it was only 76 days.

Multi-million dollar sales so far in July

Multi-million dollar sales so far in July

I’m sure there are instances of those affected by the flood going out and buying another home but it hasn’t caused any notable effect on the overall Calgary market at this point.  The data just doesn’t substantiate the anecdotes.

13 responses to “Deluge Of Calgary Home Buyers?

  1. Pending sales are up 25% over last year… Just sayin’ 😉

  2. Jimmy, I absolutely loved the pending sale statistic until CREB made the reporting of conditional sales optional.  

    Not only that but the current pending sale statistic doesn’t include homes that are C/S but categorized as “under contract” rather than “pending”. (Under Contract listings are still visible on MLS and sellers are still allowing showings)

    Unfortunately, the pending statistic – at one time so helpful for predicting short term results – has been rendered less than useless so I’ve stopped following it 😦

    If sales do end up being up 25% y/y in July, then I’ll have to revisit tracking pending sales once again.

  3. Your July 1-7, 2013 Calgary real estate update shows that July 1-7 2012 sales were up 24.4% from the same period in 2011 due to most recent mortgage tighting. MTD sales were up 5.83% from the same prriod in 2012, I think it is due to the strength of market rather by the flood.

  4. Anonymous, I agree – the market is strong and has nothing to do with the flood at this point. Here is another up-to-date comparison:

    Between June 1-16 there were 1222 sales. This month, between July 1-16 there have been 1121 sales. That an -8.3% drop month-over-month.

    Wouldn`t a surge imply that sales should be higher than last month?

  5. Jimmy, today pending sales are showing a 9.69% year-over-year increase…it`s such a fickle stat now.

  6. Hi Mike,
    Good post. i appreciate an analysis (numbers) Vs hype.
    i actually expected to see that the flood might have increase million dollar plus home sales by 2-3x, if not for your post.

  7. Hi Koz, thanks for your comments. Here`s an update on the luxury segment with monthly comparisons:

    July 1-16: 43 sales
    June 1-16: 43 sales
    May 1-16: 45 sales

    Steady as she goes, no surge.

    Now on a year-over-year basis, it`s a completely different story. Luxury sales this month have already surpassed July 2012`s month-END total of 39.

  8. When selling a property does the seller have to disclose if the property is on a flood plain??

  9. Anonymous, here`s the answer from REIX, our insurer:
    (short answer is yes)

    Of more concern are the disclosure issues down the road. This disaster brought forward a number of potential liability problems. What if the house had water in it, but has been “fully remediated”, do we have to disclose? If the property was in an affected area, but experienced no damage, do we have to disclose? If your listing is on a flood plain, do we disclose? What if it’s a condominium with no actual damage to the unit, but costly repairs to the common areas like parkades? The answer for all these questions is yes! Yes! Yes! And yes! Let’s examine these questions.

    First, who defines “fully remediated”? Was the work inspected? Were the mold issues taken care of? What were the qualifications of the contractor? The courts have said that it is not up to the seller or the real estate professional to decide about adequate remediation, but instead the buyer to decide after they have received full disclosure.

    In the second scenario, where there has been no damage, your seller will probably be all over you to disclose that there was no damage to their property even though they live in one of the affected areas. It will alleviate the potential buyers concerns. Also, there were many properties flooded this year that escaped in 2005. So, if we had been using the 2005 event as a benchmark in advising buyers (or avoiding disclosure) since then, we would have been wrong.

    Third, if a property is on a flood plain, do you disclose? Of course you do! Many of our buyers in this economy come from out of town and are not familiar with the topography that makes one area flood prone and another not. Also, it’s not good enough to say that with all the publicity everyone should know about it. Let’s imagine that two years from now you have a buyer from Houston in your car and they have no recollection of a brief news story they might have seen about a flood in Calgary or surrounding area. If you are fulfilling your duty of care, you will disclose.

    Finally, when a buyer is purchasing a condominium, they are not just buying a dwelling…they are buying into a corporation. It is the real estate professional’s responsibility to inform them of all the steps they can take to research that condominium corporation for themselves. If the condominium had a parkade full of water, there may be structural issues or at least pending special assessments to be aware of even if there was no damage to the particular dwelling.

  10. Regarding Disclosure..
    What would be the case if a buyer had purchased a property 2 plus years ago??

  11. Anonymous, I don`t know the answer to that one. It would probably be best to speak with a real estate lawyer or contact RECA (the provincial regulator here in Alberta)

  12. Thanks

  13. Pingback: July 1-21, 2013 Calgary Real Estate Update | Calgary Real Estate Review

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