Can you believe it has almost been a year since the devastating Alberta flood? Let’s take a look at two predictions from last June after the flooding occurred.
Here’s what Ann-Marie Lurie, CREB®’s economist had to say:
“While it might stave off a bit of activity on the sales from what we originally were thinking we were going to have for the rest of the year, I don’t think it’s going to be significant. If there are less listings on the market because some of these properties are coming off, it actually could improve pricing activity in some of the other areas. You could actually see prices really continue to grow at the rates we’ve seen. So I wouldn’t expect much change there.”
In response, Garth Turner wrote:
“Then Calgary would be unique. Flood experience in other urban centres (like Brisbane in 2011) shows house values dropped by about 20% in affected areas, and as much as 60% for periods ranging between months and years. In fact in Brisbane (twice the population of Calgary) the average house price for the entire city – flooded or not – dipped between 10% and 30% for months after.
“Right now, of course, local realtors are trying hard to mitigate the impact in one of the few cities where housing was still hot. The remarks are as cavalier and self-serving as one would expect.”
From January to June of 2013, the average price for the City of Calgary was $456,541.
If you believed CREB®, you would’ve expected the average price to remain fairly constant over the next half of the year.
If you wanted to believe Garth and his cherry-picked example of Brisbane, you would have expected average prices to drop between $45,654 to $136,962 over the next few months.
Guess what the average price for the City of Calgary was from July to December of last year? $456,747. A total difference of just two hundred dollars from the first half of the year, spot on with CREB®’s forecast of not much change.
Furthermore, the average price for the first half of 2013 was a 6.3% y/y increase from the same period in 2012. In the second half of 2013, prices were up 6.8% y/y, exactly inline with CREB®’s prediction that prices were to continue growing at the same pace.
Of course since the flood, Calgary prices have continued to rise. The average price of a Calgary home is up over $20,000, the median price has increased over $29,000 and the benchmark price is up over $40,000.
Looks like Calgary was unique.
First Week of June
Activity remained brisk during the first week with 633 sales being reported, a y/y increase of 15.72% and the second best start for a June month.
An influx of 26.43% more new listings than a year ago has shifted the overall market towards more balanced conditions, particularly the condo-apartment segment.
With a sales-to-new-listings-ratio of 49.5%, apartments are smack-dab in the middle of balanced market conditions. It’s the first time the ratio has dropped below 50% in my weekly updates since the third week of January.
As for inventory, only the single family home segment has fewer active listings today than a year ago (-7.97%)