NEWS THAT MAY PUT A SPRING IN YOUR STEP

As mortgage rates fall, realtors anticipate boost to an already strong market
By Mario Toneguzzi 
Calgary Herald May 28, 2014 

CALGARY - Calgary’s hot housing market has received another incentive that could boost sales activity even more in the coming days.

Mortgage rates are starting to come down again right during the busy time of the year for the industry.

Ann-Marie Lurie, chief economist with the Calgary Real Estate Board, said lower mortgage rates will help affordability in the local housing market.

“It can actually help mitigate some of the increases in pricing that we’ve seen in Calgary’s market,” she said. “We’ve had that price growth. We’re still more affordable than we have been for some time so that’s not really the issue per se. But when you have the mortgage rates come down, that can help especially as we’re facing rising pricing.

“We’re not in any concern of overheating our market but with new listings starting to improve this can actually help some of those people who were really on that cusp. They can get into the market.”

Scotiabank announced this week it was lowering its fixed five-year mortgage rate to 2.97 per cent and its five-year variable rate to 2.47 per cent. The rate is effective until June 7.

Investors Group recently offered a 1.99 per cent rate for a 36-month closed, variable-rate mortgage, but Scotiabank is the first of the big banks to push its fixed rate down below three per cent in recent months.

According to CREB, year-to-date until May 27, there have been 10,805 MLS sales in the city, up 13.38 per cent from the same period last year. The median price has risen by 7.03 per cent to $428,000 while the average sale price is up 5.85 per cent to $480,416.

“Housing activity in Calgary has been fairly robust supported by a variety of factors. Along with employment growth, rising incomes and strong net migration, relatively low mortgage rates has also contributed to the demand for housing,” said Richard Cho, senior market analyst in Calgary with Canada Mortgage and Housing Corp. “Mortgage rates have been low for a couple of years and this has helped people, such as first-time home buyers, purchase a home.

“A decline in mortgage rates alone will not necessarily lead to an increase in sales. The decision to purchase a home often involves both personal and financial considerations.”

So far in May, MLS monthly sales in Calgary are up 17.74 per cent compared with a year ago to 2,489 transactions. New listings have also risen by 17.82 per cent to 3,756 but as of Tuesday active listings were down 5.76 per cent from the same time last year to 4,481. The median price in May of $435,000 has increased by 7.41 per cent and the average sale price is up by 5.40 per cent to $485,866.

“Will this (lower mortgage rates) affect the market in Alberta? Absolutely not. The market already is strong, the sales moving well, supply is an issue and Calgary is poised to be the hottest market in the country again this year,” said Don Campbell, senior analyst with the Real Estate Investment Network. “These lower rates will have a lot of people talking, but little or no measurable effect in this part of the world. Out East, it will as that market needs stimulus.”

Campbell said the biggest problem with some mortgages is hidden in the restrictive terms. These low rates will spark increased traffic to the banks, but consumers must be wary before signing asthe penalties and restrictions are often prohibitive, he added.

“Spring is prime fishing season in Calgary, and not just for trout. With the recent surge of new listings, I think we’re seeing a little fishing from sellers, too,” said Scott Bollinger, broker with ComFree Commonsense Network. “Sellers are recognizing the main market factors — good economy, strong housing price gains, tight inventory, seriously low average-days-on-market — and some seem to be fishing for their price rather than settling for market price. They’re trolling the waters for motivated buyers, and my advice to these buyers is: do your homework and stick to a neighbourhood’s comparable numbers to avoid taking the bait.

“Calgary buyers are smart. They know when cheap money is cheap money. And sub-three per cent five-year fixed rates are cheap. It’ll only add fuel to the hot housing market. The open question is: how much and for how long? Will Calgarians see this as a temporary phenomenon, flock to the banks, and boost the market in the short term? Or will they see it a longer-term trend and bide their time, which would reduce the urgency and the immediate impact on the market? Either way, the rates give motivated and qualified Calgarians more purchasing power in what’s still a relatively affordable market. I think that points to steady price gains throughout 2014.”

HOW GREAT THOU ART

Eichler homes serve as video screens in Granada Hills art project

By Lisa Boone
Los Angeles Times September 16, 2013

"I think a lot about how our ideas are influenced by our environments," said artist Nate Page, who will screen nine short videos on the front of Eichler homes in the Balboa Highlands tract of Granada Hills on Thursday. "The psychological phenomenon of how we idealize modern living. These homes are perfect surfaces to screen something."

For a project titled "California Living," Page filmed 15-minute clips of homeowners who live in the neighborhood. The videos will show the interiors, sometimes with inhabitants moving about, as if passersby were looking into the homes through a window.

"I just asked the homeowners to be as creative as they want in representing their lifestyle inside the homes," Page said. "Or they could just do nothing. It's up to them. "

The videos will be staggered throughout the neighborhood, and which houses are serving as video screens will not to be obvious, said Page, who intended to create an experience in which viewers imagine the lives of the people behind the facades.

"I want people to project their own ideas about what the modern California lifestyle is like," Page said. "I was thinking a lot about isolation and modern living in California. People still need to create boundaries when they have that much openness."

Page said he researched a variety of architectural styles in which to explore the issues of isolation and openness, ultimately settling on Eichler because of the clear paradox between front and back.

"California Living" will screen from 8 to 11 p.m. Thursday on select houses on Darla Avenue, Lisette Street, Nanette Street and Jimeno Avenue, off Balboa Boulevard.

The event is part of the Machine Project Field Guide to L.A. Architecture, part of the Getty initiative Pacific Standard Time Presents: Modern Architecture in L.A.

SUP?

Calgary homes selling quicker
May 27, 2013

It’s interesting to see how the age-old dynamic of supply and demand is playing itself out in today’s Calgary real estate market.

When supply is down and demand is up, that’s going to impact prices and it’s also going to impact the length of time it takes to sell a property.

Well, supply is down these days in Calgary’s housing market while sales continue to grow. That’s pushing prices upwards – near record levels. And homes are selling quicker.

Here’s the numbers.

According to the Calgary Real Estate Board, month-to-date until May 26, there have been 2,049 MLS sales in the city, up 2.71 per cent from the same period last year.

Days on the market to sell a property have dropped from 39 last year to currently 31, which is a drop of 20.51 per cent.

New listings of 3,091 so far this month are down 4.83 per cent from last year and active listings are off 18.16 per cent to 4,821.

All those numbers are sure to impact prices.

So far this month the median price is up 3.87 per cent from last year to $405,000 and the average price has risen by 3.26 per cent to $459,951 for all MLS property sales in the city.

WITHIN A HAIR

Resale home prices rise to near record
By Claire Young
Calgary Herald April 5, 2013

Fewer houses for sale and greater demand are pushing single-family resale housing prices up to near historical averages, says the Calgary Real Estate Board.

The average price rose to $518,392 in March, up 9.6 per cent from $472,698 during the same month last year.

This is within a hair of the new record of $518,500 for the average resale price for single-family homes logged in February, which beat the old high mark of $506,700 set in July 2007.

“Tighter rental conditions and continued employment growth has supported housing demand growth,” says chief economist Ann-Marie Lurie of CREB. “However, for those looking for more affordable single family home products, their choices continue to narrow.”

There were 3,194 new resale listings in Calgary in March, down almost five per cent compared to 3,348 during the same time last year.

For the first three months of 2013, the number of new listings was 8,358, down 4.6 per cent from 8,761.

“Less resale product available to consumers is ultimately limiting sales growth,” says CREB president Becky Walters in a news release. “In addition, resale homes are selling in less time and with continued upward pressure on prices.”

Listings of single-family resale homes in Calgary saw a year-over-year drop, declining to 2,239 in March, down 4.5 per cent from 2,346.

March’s benchmark price —that of a typical home based on a formula that uses various factors to ensure accurate comparisons — also rose to $446,500 in March, up 8.9 per cent from $411,000.

New listings of single-family homes under $500,000 are declining at double-digit rates, says Lurie. She predicts this will drive potential Calgary homebuyers to consider surrounding towns, condominiums or the new home market.

In Calgary, total sales of single-family homes dropped to 1,480 in March, down six per cent from 1,575.

The board’s Zone A, which is roughly the city’s northwest, saw 541 transactions at an average sale of $507,545 and 33 days on the market.

The two communities in the city that saw the most sales activity in March were both in Zone D, in the southeast.

Cranston and McKenzie Towne both logged 41 sales. The highest average sales were logged in the board’s Zone C in the southwest community of The Slopes, with two sales averaging $1.72 million.

OUT-OF-TOWN SALES DROP

Total MLS sales of resale homes in the communities surrounding Calgary dropped by two per cent in March compared to the same month last year, says the Calgary Real Estate Board.

Sales fell to 364, down from 372 sales, while new listings dropped significantly during this time to 662 in March, down 15.6 per cent from 785 last year.

But average prices rose to $365,002 in March, up 4.7 per cent from $348,474, says the board — and benchmark prices also increased to $336,100, up 7.1 per cent from $348,474.

The benchmark price is that of a typical home determined using various factors to ensure accurate comparisons.

ON THE RISE...NATIONALLY

Canada’s home sales back on the rise
Postmedia News
Mar 15, 2012

Following a rough start to 2012, home sales in Canada rebounded in February with a modest increase from the previous month.

The Canadian Real Estate Association (CREA) said Thursday that home sale rose by 1.4% between January and February, which helped recover roughly one-third of the 4.5% drop recorded the previous month.

Compared with the same reporting period the previous year, activity was 8.6% higher than February 2011. Over the first two months of 2012, some 61,772 homes were sold, which represents a 6.7% hike from the same period in 2011.

“The national rise in both sales activity and the number of newly listed homes beyond the normal seasonal increase provides clear evidence that Canadians are confident in housing market prospects,” CREA president Gary Morse said in a new release.

New home listings also jumped 1.9% in February, representing the highest level since May 2010. The association said a spike in new listings in Canada’s two busiest markets — Toronto and Montreal — helped counterbalance a decrease in listings in Vancouver, which is the country’s third-largest market.

CREA said that the balance between sales and new listings remains fairly equal.

On a year-over-year basis, average home sale prices were up fully two% in February 2012. The average price of all homes sold that month was $372,763.

The association said that the increase was partly due to a rise in high-end home sales in the Vancouver area, which was not anticipated. Single detached residences in the Toronto area also continue to fuel home gains.

LIFE is NOT waiting for you

Forget market timing, it's all about life timing
Garry Marr, Financial Post 
Wednesday, Jun. 9, 2010

'You know, you're making the biggest mistake of your life. The housing market is going to fall."

I got this great piece of advice from another journalist at the Financial Post, who has since left the newspaper, after buying my first home. Not exactly the type of thing you want to hear after taking on huge debt and making the biggest financial decision of your life.

Lucky for me, I didn't heed that advice about Toronto's red-hot real estate market -- in 1998. I'm not going to say I made a shrewd business decision 12 years ago, or even six years later when I bought a larger house.

For me, it wasn't a case of not following what turned out to be bad advice from a fellow business journalist. Nor was it about trying to time the market.

I was simply following the same pattern as most Canadians: I got married and decided to stop renting and buy something. Later came the need for a bigger home when the second kid was on the way.

Which brings us to today. The supply of housing is rising fast as people try to list their homes for sale before the market "crashes." This is happening at the same time that demand is starting to wane. Economists and even the real estate industry are all predicting a correction, the only argument being how severe it will be.

So, the question for anyone buying is, should you wait?

Don Lawby, chief executive of Century 21 Canada, thinks the strategy of waiting for a crash is not going to work during this economic cycle. "For a market to crash, you have to have people who are desperate to sell," says Mr. Lawby. "People will [only sell] if they can't afford their mortgage or they don't have a job."

He doesn't see a decline in prices, "unless you are predicting that mortgages will renew at a hefty premium, which is not the case, or a whole bunch of people are going to lose their jobs."

Mr. Lawby believes neither will happen.

And, he adds, you are really into a risky game if you are timing the market. "A house is a home. If all you are doing is looking at it as an investment --that's what happened the last 15 years--it's not just that. It's a place to live and a place to raise a family," says Mr. Lawby.

Even Benjamin Tal, a senior economist with CIBC World Markets, who last month said in a report that Canadian housing is 14% overvalued, has doubts about playing the market. But he suspects that's exactly what some Canadians will do.

"Is there a sense that prices will go down and people will wait? I think it might be an issue," says Mr. Tal. "It won't be the main reason [people don't buy], but it will happen at the margins. The fact that people sell at the peak and wait to buy is a normally functioning market."

But even if you do make the right call on housing prices, it could end up backfiring on you in other ways. For example, if interest rates rise fast enough, any gains you make on price could be erased by interest charges, says Mr. Tal.

Edmonton certified financial planner Al Nagy says you need to think of your house the way you think about any long-term investment. "Whether it's an investment for use in your retirement or a house to live in, it's a long-term thing. The timing becomes less critical than it would be if it is a speculative [investment]."

And he says making a call on the housing market is as tricky as any other investment call. "It's very rare you catch the bottom. You can't let the market dictate when it's time to buy. The time to buy is when you can afford it," says Mr. Nagy.

I'm not sure that philosophy would fly with my former colleague, but the problem with timing the market is, what if your timing is off?

TIME TO SELL!

Remax warns not enough homes for buyersJulie Fortier, Canwest News Service
Published: Wednesday, February 24, 2010
OTTAWA - With new mortgage rules, a new harmonized sales tax in some provinces and the possibility of higher interest rates all set to kick in this summer, Canadian home buyers are on a tear and it is only going to get busier leading up to this summer, according to the Re/Max Market Trends Report 2010 released Wednesday.

The report, which examined real estate trends in 16 markets across the country, found that unusually strong activity in January -- traditionally one of the quietest months of the year -- has led to a sharp decline in active listings in 81% of markets surveyed. Too many buyers and not enough homes will probably be the main problem in coming months, according to the report.

Markets experiencing the tightest inventory levels include Toronto (-41 per cent), Kitchener-Waterloo (-33 per cent), Ottawa (-30 per cent), Victoria (-30 per cent) and Greater Vancouver (-27 per cent), which also had some of the highest year-over-year sales gains.

The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent), the report said.

Western Canada dominated the list of centres with the greatest increases in price, with Victoria home prices jumping 25.5 per cent in January compared with the same month a year before. Kelowna jumped 22 per cent and Greater Vancouver rose 19.5 per cent. St. John's saw an increase of 23 per cent and Toronto rose 19 per cent.

"While home ownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now," Elton Ash, regional executive vice-president at Re/Max of Western Canada said in a release.

With the Harmonized Sales Tax, which will add more tax to home buying in two of the biggest and most squeezed markets - Ontario and B.C. - set to start July 1, and the Bank of Canada's record-low interest rates expected to rise around the same time, that pace of growth could slow dramatically in the second half of 2010. Last week, Finance Minister Jim Flaherty also said starting April 19 all borrowers must meet standards for a five-year fixed-rate mortgage, even if the buyer wants a variable rate mortgage, among other mortgage rule changes.

"There have never been so many motivating factors in play at once," Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada said in a release. "We're in for a heated spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies."


Active listings by market for January:

Market/ 2009/ 2010/ percentage change

St. John's/ 951/ 999/ 5%

Halifax-Dartmouth/ 3311/ 2695/ -19%

Hamilton-Burlington (xx)/ 1028/ 1261/ 17%

Ottawa/ 3988/ 2840/ -30%

Kitchener-Waterloo/ 1323/ 884/ -33%

London-St. Thomas/ 2538/ 2071/ -18%*

Greater Toronto/ 20450/ 12052/ -41%

Winnipeg/ 2222/ 1938/ -13%

Regina/ 456/ 381/ -16%

Saskatoon/ 1156/ 729/ -37%

Calgary/ 9225/ 6838/ -26% (xxx)

Edmonton/ 6573/ 4864/ -26%

Kelowna/ 4648/ 4120/ -11%

Victoria/ 2930/ 2061/ -30%

Greater Vancouver/ 13996/ 10218/ -27%

* - detached homes

xx - Freehold homes

xxx - Total MLS

Source: RE/MAX