UP AND AWAY

Calgary resale home average prices to balloon to more than half a million dollars
Report says average to hit $517,016 in 2017
By Mario Toneguzzi
Calgary Herald November 20, 2013 

CALGARY - The average price for a resale home in Calgary will balloon to more than half a million dollars by 2017, according to a new real estate report released Tuesday.

The Conference Board of Canada’s Autumn Metropolitan Housing Outlook, commissioned by Genworth Canada, said the average price for all residential property in Calgary will grow from $431,760 this year to $517,016 in 2017.

“Calgary is facing a lack of inventory in particular areas,” said Tanya Eklund, a realtor with RE/MAX Real Estate (Central) in Calgary.

“Buyers looking for land for redevelopment and homes for renovation have been in very short supply and have driven up pricing due to multiple offers and low inventory. Low interest rates, strong unemployment rates, low vacancy rates and an overall strong economy have also added to strength in the Calgary market.”
Ben Brunnen, an economic consultant in Calgary, said the city’s population has grown each year for the past four years and this has helped drive residential construction activity and home prices.

“Net-migration can have a big impact on the housing market, as an influx of people and families into our city can often increase housing demand unpredictably,” he said.

“In the current market, vacancy rates are low, rents are high and population growth is strong. Combined with a good economy and favourable job prospects, people are more willing to buy than they were a few years ago. The last time we’ve seen comparable population growth was from 2004 to 2006, when the economy entered a boom. While we won’t see similar house price appreciations due to different global economics at play, Calgary house prices should stay strong for the near future.”

Calgary’s economy and housing demand continue to thrive as energy sector activity remains healthy. Rising GDP is spurring employment growth,” said the report.

“On the resale housing market front, solid sales will lead to sound price gains this year and next. The new housing market is benefitting from strong absorptions, which are trimming unsold stocks of new units and fostering new construction. The medium term also looks decent.

“Ongoing economic growth will continue to produce gains in resale sales and prices and keep housing starts above their 20-year average. Good housing affordability, measured against local incomes, is an ongoing benefit to this market and allows single-family starts to maintain a high market share compared with other cities covered in this report.”
The report said summertime flooding in Calgary will limit Calgary’s GDP to 3.3 per cent growth in 2013, modest by recent standards. Output will rise a slightly faster 3.4 per cent in 2014, spurred by government-funded rebuilding efforts.

The job market will continue to expand, with annual growth of 2.4 per cent this year and 2.8 per cent in 2014 cutting the unemployment rate from 4.9 per cent this year to 4.6 per cent in 2014. Economic health should continue between 2015 and 2017, with GDP expanding roughly three per cent and employment rising about two per cent each year, it said.

“Calgary’s strong economic fundamentals allowed its resale market to largely shrug off the floods. Seasonally-adjusted sales and the average resale price actually rose during June, the flood month, and have subsequently advanced,” said the report.

“Price growth is accelerating, although increases remain far below boom-era advances. We expect the market to remain balanced and price growth to stay healthy in 2014 and over the following few years.”
The report’s forecast for average prices over the next few years and annual growth rate are: 2013, $431,760, 4.7 per cent; 2014, $451,798, 4.6 per cent; 2015, $473,470, 4.8 per cent; 2016, $497,139, 5.0 per cent; and 2017, $517,016, 4.0 per cent.

Forecast for sales in the resale market for the next few years and annual growth rate are: 2013, 28,111, 5.5 per cent; 2014, 28,793, 2.4 per cent; 2015, 29,418, 2.2 per cent; 2016, 30,027, 2.1 per cent; and 2017, 30,620, 2.0 per cent.
“Unsurprisingly, Calgary’s resale prices are rising briskly. Year-over-year growth has averaged a solid 4.6 per cent in the latest four quarters, including a first quarter jump near eight per cent,” said the report. “These increases will lift Calgary’s average price 4.7 per cent in 2013, the largest gain since 2007 and finally exceeding that year’s peak value. Similar price growth is expected between 2014 and 2016, with a slight tapering in growth to four per cent in 2017.

“These increases will slightly erode local housing affordability. Principle and interest charges on Calgary’s average resale home were under 16 per cent of average household income the last two years and are expected to remain there in 2013. But house prices will rise faster than incomes, pushing the ratio to roughly 20 per cent by 2017. This remains decent, as affordability is better only in Edmonton, Ottawa, and Winnipeg among the cities in this report.”

The report said buoyant housing demand is also energizing the new home market. Absorption of new units averaged 11,200 units in the four quarters to the second quarter of 2013, up 25 per cent from a year earlier. This included a surge to an annualized 15,000 units in the second quarter, the most since 2008. This strength will lift absorptions to a full-year total of 12,140 units in 2013, up 25 per cent from 2012. Another increase of nearly six per cent in absorptions is expected for 2014, but still trailing the peak of 13,700 units reached in 2008.

“Healthy new-unit take-up fuelled a big jump in housing starts to 13,186 units in 2012, more than double the recessionary trough in 2009, but well off peak levels of the last decade,” it said. “We expect starts to ease a modest 2.7 per cent in 2013 as an 11 per cent dip in multiple starts slightly outweighs a seven per cent gain in single-detached starts. For 2014, rebounding multiple starts will fuel a five per cent increase in total starts despite relatively unchanged single-detached construction.

“In the medium term, we expect housing starts to ease slightly, as both single-family and multiple construction dip. By 2017, we expect 11,400 units to get under way; this would slightly outpace the 20-year average of housing starts. While multiple starts are expected to increase their market share, they are forecast to make up only 52 per cent of total starts between 2013 and 2017.”

OUT OF STOCK

Sellers' market for resale in Calgary
By Claire Young
Calgary Herald November 8, 2013 

Despite a recent rise in the number of new listings, resale housing in the city remains a sellers’ market, says the Calgary Real Estate Board.

“Price growth and tighter market conditions have encouraged some of the recent rise in new listings,” says chief economist Ann-Marie Lurie of CREB in a news release.

“This is a trend worth noting as the rise is easing some of the tightness in the market. Despite some movement, sellers’ market conditions persist.”

New resale listings of all kinds of housing in Calgary totaled 2,522 units in October, up nine per cent from 2,312 during the same month last year.

New listings have been down in other months this year, meaning the number of new listings so far this year is on par with the same time last year.

From Jan. 1 to the end of October, there were 29,358 new listings compared with 29,333 during the same period last year.

In October, there were 1,953 total sales of resale housing of all kinds, up 17.7 per cent from 1,659 sales last year.

Homes also sold faster, spending on average 40 days on market in October compared with 46 days during the same month in 2012. The average sale price for homes of all kinds rose last month to $458,876, up five per cent compared with $437,030 a year earlier.

There were 1,739 new listings of single-family resale homes in Calgary in October, up 7.6 per cent from 1,615 during the same month last year.

Meanwhile, the pace of sales continued to pick up, selling in an average of 38 days last month compared to 43 days in October 2012.

The average price of single-family homes increased 4.7 per cent to $516,244 in October, up from $492,772 last year.

Sellers are commanding an extra half per cent this month on the final sale price compared to the same time last month, earning 97.78 per cent of the list price.

NORTHWEST FLEXES MUSCLES

Of the 1,336 sales of MLS-listed single-family homes in the city, the northwest quadrant of Calgary was the most popular with homebuyers in October, says the Calgary Real Estate Board

The board’s Zone A, roughly the city’s northwest, saw 463 resale houses trade hands at an average sale price of $530,892.

There were 357 sales in October in the board’s Zone C, roughly the city’s southwest, at an average price of $654,889.


Meanwhile, the board’s Zone D — roughly southeast Calgary — logged 266 transactions of single-family homes at an average price of $479,149. In the board’s Zone B, roughly the city’s northeast, 250 homes changed hands at an average price of $330,599.

ASK NOW!

It never hurts to ask and check before buying

BY SHELL BUSEY 

THE PROVINCE NOVEMBER 3, 2013

If you are looking to purchase a strata unit in a building that has not yet been built, there are some things regarding the layout of your potential suite you should be aware of.

You want to be aware of backto-back bedrooms and the level of soundproofing in the walls. This is something that is expensive - if not impossible - to change later.

One suggestion for anyone looking for a new condo or townhouse or resale unit: if you can gain access to next door or above or below suites, take a radio with you and play it in the adjoining suite. You may be amazed at how music can transfer through walls.

Also, are the strata rules and regulations in place, or is the strata formed yet? Rules and regulations can limit parking, guest parking, pets, smoking and age of residents. Keep in mind your first purchase may be the biggest capital investment you will make and you do not want it to be negative.

One question I am asked many times at seminars, home shows and in phone calls is: "How do you tell the best from the worst when buying your first piece of real estate?"

I am aware of buyers using the services of home inspectors, but that does not mean they are going to find some of the most important downsides to your potential home.

If you are looking at an apartment, old or new, you may want to monitor the building over a period of 24 hours, or better yet, a week.

For example, how many shift workers live in the building, possible smokers or even rowdies who have no respect for their neighbours? If a condo building is in an area undergoing revitalization, there may be developments under consideration that could take away views that you enjoy.

A number of the points can be important in a new singlefamily homes subdivision, as well. Due to zoning bylaws, homes can be built close to one another. Keep the following items in mind when you are house hunting. Is the property a bare-land strata, at what height can you have a fence or hedge, and are storage sheds allowed? What is the maximum allowable size of sun decks, should you want to enlarge yours? Is there outdoor play equipment such as basketball hoops and trampolines, and is there a goodneighbour policy with regards to noisy heat pumps and air conditioning compressors?

Last, but not least, consider your budget - not just for mortgage payments but yearly costs to operate the home.

You would be surprised how many homebuyers do not properly prepare and end up getting into a costly scenario.

For more home-improvement information or to send Shell an email go to www.askShell. com and become a member of Shell's HouseSmart club.

FAVOURING THE SELLER

Calgary housing market soaring with sales and price hikes
Strong sellers’ conditions as listings down
By Mario Toneguzzi 
Calgary Herald November 1, 2013

Calgary’s resale housing market continued to soar in October with strong year-over-year hikes in both sales and prices.

According to the Calgary Real Estate Board, MLS sales of 1,953 for the month were up 17.72 per cent from a year ago as the average sale price rose five per cent to $458,876 while the median price saw an increase of 5.96 per cent to $409,000.

“The October Calgary real estate market kept a consistent absorption rate between two to 2.2 months worth of inventory. This places us in a strong sellers’ market,” said Robyn Moser, a realtor with CIR Realty in the city.

“Attributes of a sellers’ market are, competing offers, listed home selling in the first two weeks or sooner, sellers being able to dictate the terms of the negotiations and not having to settle for much less than realistic asking prices. All consistent with our October experiences.”

Although new listings for the month were up 9.08 per cent to 2,522, active listings at the end of the month were down 16.19 per cent to 3,841.

The average days on the market to sell a property dropped from 45 a year ago to 40 in October.
Moser said housing activity in Calgary may be fuelled by a number of factors: seasonal fall peak activities with people wanting to purchase and move into homes before winter sets in; investor speculators coming into the market due to the flood impact in June; corporations reorganizing and centralizing back to Calgary and Edmonton; and rental rates increasing.

“Buyers had to react to this market by acting quickly when homes came available for sale, being prepared to pay asking price or above and ensuring they were prequalified and prepared for condition days of seven days or less in order to get their offers accepted,” said Moser.

Sales and prices were up across all housing categories in the city during the month.

In the single-family home market, there were 1,336 MLS sales, up 14.29 per cent from last year with the average sale price increasing by 4.76 per cent to $516,244 and the median price rising by 5.12 per cent to $452,000.

The condo apartment category saw sales rise by 24.35 per cent to 337. The average sale price was up 6.76 per cent to $309,415 and the median price rose by 8.80 per cent to $272,000.

In the condo townhouse market, sales of 280 were up 27.85 per cent with the average price rising by 13.49 per cent to $365,037 and the median price up by 8.29 per cent to $319,450.

The towns surrounding Calgary saw sales jump by 22.04 per cent to 382 with the average price increasing by 10.54 per cent to $380,350 and the median price up 8.11 per cent to $360,000.

“Price growth and tighter market conditions have encouraged some of the recent rise in new listings,” said Ann-Marie Lurie, chief economist at the real estate board. “This is a trend worth noting as the rise is easing some of the tightness in the market. Despite some movement, sellers’ market conditions persist.”

Employment growth, strong net migration, lack of rental product and low mortgage rates have contributed to the rise in housing demand over the past two years, she said.

“Meanwhile, supply levels have not kept pace, causing prices to push up,” added Lurie.