Category Archives: Calgary Real Estate Discussion

June 2016 Calgary Real Estate Market Report

creb

Download CREB®’s June 2016:

CREB® commentary:  Calgary home prices continue to slide in most areas of the market, but not at the rate that many might expect. This is partly due to June’s resiliency in the detached and semi-detached sectors of the market, where sales compared to new listings and standing inventory started returning to more balanced levels.

“The detached market has been gradually moving towards more balanced conditions, helping to prevent price levels from declining at the faster rates we saw in the previous two quarters,” said CREB® chief economist Ann-Marie Lurie. “While this is welcomed news for sellers, it’s very likely that pricing challenges will persist in the housing market until economic conditions start to improve.”

Detached benchmark prices totaled $502,400, which is 0.4 per cent higher than last month, but 3.4 per cent lower than last year’s levels. This is the first time in eight months that detached prices recorded a monthly gain, helping ease the quarterly decline from 2.2 per cent in the first quarter to 0.7 per cent in the second quarter.

Overall sales activity remained relatively weak in June, falling by seven per cent to 2,028 units. Inventory levels went in the other direction and continued to climb in June to 5,973 units, 16 per cent higher than last year. Both the attached and apartment segments of the market have recorded inventory gains around 30 per cent, far greater than the year-over-year increase of five per cent in the detached sector.

Higher inventories and weaker demand continue to have a larger impact on pricing in the apartment and row sectors. June apartment prices slid by another 0.1 per cent over last month, pushing the average year-to-date benchmark price down 5.3 per cent below last year. Attached product experienced a monthly slide of 0.3 per cent, mostly due to steeper price declines in row style product.

“The price adjustments that we’ve seen in the past year have allowed some buyers to get into homes that were previously unattainable,” said CREB® president Cliff Stevenson. “This is especially true for homeowners with financial stability and a good amount of equity in their home. With so much choice out there, it’s giving consumers an opportunity to find their ideal home at a price they can afford.”

April 1-14, 2016 Calgary Real Estate Market Update

Calgary home sales between April 1-14 were down -7% year-over-year.  That’s not a big surprise as the pending stat we reviewed in our last update pointed towards a sales drop in the week to come.

Sales were more than -20% below the 5 & 10 year average and on the slowest April pace since 2000.

Calgary home sales April 14 2016

Calgary home sales, April 1-14, Y/Y comparison

Average prices are up 2.16% and much can be attributed to the high-end market.   Twenty-two homes sold for $1M+ in the first two weeks, the second highest April month-to-date level.

Low overall sales + Near record luxury sales = skewed average price.

Calgary luxury home sales April 14 2016

Calgary luxury home sales, April Y/Y comparison

No upcoming inventory surge as new listings remain subdued.  While up 6.6% y/y, new listings remain below the 5 and 10 year average.

True, the sales-to-new-listings ratio is pointing towards balanced market conditions at 48%, but that ratio excludes how many homes were already listed, aka Active Listings or Inventory.

There are currently 6,340 homes for sale and 1640 have sold in the past 30 days.  That’s an inventory absorption rate of 3.9 months: a buyer’s market.

Calgary new listings April 14 2016

Calgary New Listings, April 1-14, Y/Y comparison

Bank Commentary Round-up

Today, CREA released Canada’s housing market report for March.  National home sales broke all previous monthly records as prices rose 9.1% year-over-year.

  • TD Bank: “Ontario and British Columbia housing markets continued to drive the national narrative. Almost all of the markets currently in seller’s territory (which make up just under half of Canadian activity) are found these two provinces… Regionally, the divergence among the Canadian housing markets is expected to become even more pronounced throughout 2016” (Read full report pdf)
  • BMO: “On the weak end of the spectrum, sales and prices continue to retrench in markets exposed to oil prices. Sales in Calgary fell a further 12% from a year ago and the benchmark price is down 3.7% y/y. While further declines are likely coming in 2016, keep in mind that those who purchased homes through mid-2013 are still sitting on a meaningful equity cushion” (Read full report pdf)
  • Scotiabank:  “Weakening employment and income prospects and reduced migration inflows are contributing to depressed activity levels in Canada’s oil producing provinces, though average prices to date have held up relatively well…we expect conditions to soften further in Calgary alongside mounting job losses and increased housing supply.” (Read full report pdf)
  • Royal Bank: “Every delivery of statistics on Canada’s housing market in the past year has told more or less the same story—Vancouver and Toronto are hot, markets sensitive to the energy sector are cold, and most other markets are somewhere in between… high levels of inventory relative to sales in markets within Alberta and Saskatchewan resulted in further price weakness in these provinces. The rate of decline in Calgary’s MLS HPI accelerated to -3.7% in March from -3.5% in February.” (Read full report pdf)

 

New Home Prices

The price for new homes in the Calgary CMA continued their downward slide according to latest data from Statistics Canada & the New Housing Price Index.

Calgary prices were down -0.5% in February from the previous month. Builders reported market conditions as the main reason for the decrease—the largest since July 2011.  Year-over-year, price were off by -1.3%.

New Housing Price Index, Calgary, Y/Y percent change

New Housing Price Index, Calgary, Y/Y percent change

NHPI for Canadian cities (click to enlarge)

NHPI for Canadian cities (click to enlarge)

Repeat Home Sale Prices (Teranet-National Bank)

For the 6th consecutive month, Calgary repeat home prices posted a loss according to the Teranet–National Bank House Price Index.

Calgary prices in March were down -0.3% from February and -3.7% from the year before.   Prices are now -5.7% off the peak established in October 2014.

Prices are -5.7% below peak

Prices are -5.7% below peak

Calgary repeat home sale prices continue to slide

Calgary repeat home sale prices continue to slide

The Teranet–National Bank House Price Index™ is estimated by tracking ob­served or registered home prices over time using data collected from public land registries.

All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method. All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005.

Teranet-National Bank House Price Index (Source: housepriceindex.ca)

Teranet-National Bank House Price Index (Source: housepriceindex.ca)

Calgary sales-to-new-listings ratio Apr 14 2016

Calgary Real Estate Stats Summary - April 14 2016

Calgary Real Estate Stats Summary – April 1-14, Y/Y comparison

March 1-14, 2016 Calgary Real Estate Market Update

It remains slow going for a spring month. Home sales through two weeks are at the lowest March level since 2009, an improvement in comparison to last week where we had to travel back to 1996 to find a weaker start to the month.

There have been 659 sales month-to-date, down-13.7% from last year and below the 5 & 10 year average by -23.5% and 26.4% respectively.

Calgary home sales March 1-14 2016

Calgary home sales, March 1-14, Y/Y comparison

Calgary new listings March 1-14 2016

Calgary new listings, March 1-14, y/y comparison

Calgary Foreclosures / Mortgages in Arrears

There are 87 foreclosures/judicial sales listed in Calgary now, an increase of 2 from last week.

According to the Canadian Bankers Association, Alberta’s arrears rate in December was 0.29% with 1,687 residential mortgages behind on payments by 3 or more months.    It’s a slight uptick from the previous December which had a 0.27% rate with 1,512 residential mortgages in arrears, but far below the peak levels of 2010/2011.

Alberta mortgage arrears

Alberta mortgage arrears

Calgary Luxury Home Market

A total of 26 homes have sold for $1 million-plus compared to 19 a year ago.

The average sale price to list price ratio is 94.63% for the luxury segment compared to 97.06% for the rest of the Calgary market.   Bear in mind that the SPLP ratio is calculated by using the last asking price before it sold.   There may have been numerous or significant price reductions during the history of the listing in the meantime.

For example, one Glendale property that sold this month for $2,800,000 was originally listed for $3,599,900, expired, relisted and later reduced to $2,950,000 before finally selling.

The SPLP ratio would be 94.9% ($2800000/$2950000), but using the sale price to the original asking price would give us a ratio of 77.8%.

Contributing to the y/y sales increase are the deals to be found:

Springbank Hill
Sold for: $1,790,000
Previously sold for $2,325,000 in 2013
Previously sold for $2,150,000 in 2011

Elboya
Sold for $1,325,000
Previously sold for $1,500,000 in 2011
Previously sold for $1,500,000 in 2007

Auburn Bay
Sold for $1,300,000
Previously sold for $1,400,000 in 2010

Calgary luxury sales March 1-14 2016

Calgary luxury sales March 1-14 2016

Teranet-National Bank House Price Index

Teranet released February’s data yesterday showing that Calgary repeat home sale prices were down -3.3% y/y, -0.9% m/m, and -5.4% from peak.

The -3.3% annual drop was Calgary’s largest since 2011.   According to the index, prices have retreated to roughly May 2015 levels & have fallen for 5 straight months.

The Teranet–National Bank House Price Index™ is estimated by tracking ob­served or registered home prices over time using data collected from public land registries.

All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method. All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005.

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Calgary Teranet-National Bank House Price Index

Calgary repeat home sale price slide deepens

Alberta 2016 Forecast

CREA is projecting that Alberta home sales will fall -18.7% to 45,900 this year according to their latest forecast out today.

This revised sales outlook is a significant departure from December’s which was only forecasting a -3.7% drop in sales to 54,300.

The average price for the province is expected to decline by -2.5% to $383,300 in 2016 before seeing price gains in 2017 of 1.5%.   It’ll be interesting to watch that forecast evolve throughout the year.

CREA Forecast

CREA Forecast (click to enlarge)

Calgary real estate stats summary, March 1-14, Y/Y comparison

Calgary real estate stats summary, March 1-14, Y/Y comparison

February 1-14, 2016 Calgary Real Estate Market Update

The last time Calgary’s February real estate market was slower than now, we were watching the first season of Friends and singing along to On Bended Knee by Boyz II Men.  Yes, month-to-date sales are at the lowest February level since 1995.

A total of 502 homes have sold through two weeks, -12% fewer than last year during the same time,  -30% below the 5 year average and -38% below the 10 year average.

The newest mortgage rules are now in effect with nary a last-minute bump in the affected $500,000-$999,999 price bracket as sales there were down -21% y/y.

Calgary home sales Feb 1-14 2016

Calgary home sales, Feb 1-14, Y/Y comparison

Overall average prices are showing a 2.77% y/y increase thanks to a sales uptick in the luxury segment.  Twenty homes have sold for $1M+ this month, of which 4 of them were over $2 million.   Between February 1-14 last year, there were 14 luxury sales with only 1 over the $2m mark.

Ignore the average price.  It simply is not an accurate indicator, especially in a low sales volume environment with high-end transactions.

Calgary luxury home sales Feb 1-14 2016

Calgary luxury home sales, Feb 1-14, Y/Y comparison

New listings continue to trend between the 5 and 10 year average and inventory sits at 5585, up 3.46% y/y.

Calgary New Listings Feb 1-14 2016

Calgary New Listings, Feb 1-14, Y/Y comparison

Foreclosures/judicial listings are being easily absorbed so far with 8 sales in the past week, bringing down the total number of active listings to 82 from the 85 recorded on February 8th.

TD’s latest Regional Housing Report released on Friday says that Calgary housing prices are expected to fall by roughly 10% by the end of the year.  Below is the excerpt or you can download the full report here.  pdf

Calgary existing home sales have already fallen 36% from their peak reached in July 2014, while Edmonton sales are down 15% from their October 2014 peak and are expected to reach their 2008/2009 lows by the end of this year.

The market remained well balanced by CREA’s definition in 2015, keeping home prices remarkably stable. A balanced market is typically defined as one where the sales-to-listings ratio is within the 40 to 60 range. The 6-month moving average in the  was 56 in Calgary and 47 in Edmonton in December.

Listings are, however, rising sharply and both markets are tipping closer to one in which buyers will increasingly hold the bargaining power.

Rental vacancy rates, which are a leading indicator of slack, have more than doubled in all both markets during 2015 (Chart 16, Page 6). As such, home prices are expected to fall by roughly 8% to 10% in Edmonton and Calgary, respectively, by the end of the year. Home prices will likely stabilize thereafter along with oil prices.

New home construction will pull back considerably in the near- to medium-term, and take a few years to recover.

On the topic of the sales-to-new-listings ratio, all of Calgary is in buyer’s market territory so far this month (below 40%) with the apartment segment the deepest at 22%.

Sales to new listing ratio February 1-14 2016

Sales to new listing ratio for February 1-14 2016

Calgary Real Estate Stats Summary - February 14 2016

Calgary Real Estate Stats Summary, February 1-14, Y/Y comparison

Alberta Flood Hazard Interactive Map

Albertans have become acutely aware about the risks involved living near streams, rivers and lakes.

Alberta Environment and Sustainable Resource Development has a Flood Hazard Map Application for the public to use: here

Use the interactive flood map

Use the interactive flood map

Before considering a home purchase, browse the map to be aware whether the property is located in an area deemed to be a flood risk.

Calgary Area Studies

Airdrie Study

  • Airdrie – Nose Creek
  • According to the map,  a sizeable portion of the community of Williamstown is at risk of overland flooding from Nose Creek.
Part of Airdrie at risk of overland flooding

Part of Airdrie at risk of overland flooding

Grow-ops Focus Of CREB®Now Webinar

CREB®Now hosted a webinar on grow-ops and REALTOR® Awareness on March 19.

The hour-long event was filled with questions from members who joined the session.

Thank you to President-Elect Bill Kirk, CSRT Leader Wayne Brown and ALERT Staff Sergeant Keith Hurley for presenting timely and informative content.

CREB has posted the video publicly, so feel free to watch and learn more about grow-ops.  Questions at the end clarify some opinions stated as facts during the presentation.

Related post:  Are remediated grow-ops safe?

TD: Calgary, A Lone Shining Star In Western Canada’s Housing Market

TD Economics has a new quarterly feature called “Metro Beat” where they  review metro economic trends.

The bank referred to Calgary’s situation as “ideal” in comparison to other western cities since it was:

  • the only one among its peers to register positive sales growth in 2012, at 14.3%.
  • benefiting from a double digit increase in new housing starts (+38.2%), a sharp rebound from 2011.
  • seeing increased residential building permits in the region, signalling more projects to come over the near term.

In TD’s price forecast, only Calgary & Edmonton are expected to see a price increase in 2014, although sales are predicted to edge lower.

You can download the entire Metro Beat here

Source: TD (click to enlarge image)

Source: TD (click to enlarge image)

Source: TD

Source: TD Economics

Source: TD Economics

Source: TD Economics