HOPEFUL FOR A GREEN SUMMER?

How to prepare your home for a quick, profitable, summer sale
By Melissa Leong
May 30, 2014

After a brutal winter, the heat has finally arrived and with it, expectations of a hotter real estate market. The flurry of housing activity normally reserved for early spring is extending into the summer, industry experts say.

“The pent up demand from the winter is coming to fruition. As soon as listings come out, they’re being swallowed up,” Gurinder Sandhu, executive vice-president at RE/MAX’s Ontario-Atlantic Canada Division, says.

“For buyers there are more choice and for sellers there are more buyers.”

How you price your home and how you prepare its for sale are key.

“Price trends from one neighbourhood to the next can be very different,” Gregory Klump, chief economist at the Canadian Real Estate Association. “If you price your property too high, there is a chance it’ll sit on the market without offers.”

Here’s how three recent home sellers weighed their options, and came out with the sale price they were looking for.

Original purchase price: $332,000 in 2002.

Asking price: $889,000

Sold on the first day: $889,000

Jennifer Lee, a 41-year-old public relations manager, had bought her 3,000-square foot home in Markham, Ont. brand new in 2002 for $332,000. The house had four bedrooms and four bathrooms. With the goal of moving her family to Toronto to be closer to work and loved ones, she put her house on the market on March 12.

What were your home selling goals? “My goal was to get maximum value for the home because I was going to move into a much more expensive neighbourhood. I also had a very short timeline because I wanted to match it with my kids finishing the school year.”

Describe your home selling strategy. “One of my strategies was to sell before I buy. [My brother] who has moved five or six times, said the stress he experienced buying a home first and then trying to sell his home was the worst stress of his entire life. Then you get into panicky mode: ‘I need to accept an offer.’ Then you get sellers regret: ‘Did I sell too cheap?’

We had looked at a home three doors down from us that was the exact same model that had sold last summer. They didn’t have a finished basement. It sold for $815,000. (We had spent about $50,000 to upgrade our basement.)

My agent told me that buyers in the market really like to bargain, so I thought I will price in a 5% to 10% buffer. My asking price was $889,000. I told my agent, ‘I don’t even want to hear an offer that is less than $850,000. In my head, I was thinking, I want $870,000 to $875,000.

We originally thought to hold off on offers; [our agent] said, let’s not lose momentum. If someone’s interested, let them make an offer.”

How did you prepare the home for sale? “We significantly de-cluttered. We stripped out all of the closets and did some re-painting. There were some bold colours on the main floor that we neutralized. We replaced carpet in the basement with laminate and new carpeting. Our budget for clean up was $3,000.”

What did the home finally sell for in the end? “We got an offer on the first day of the market for asking, no conditions.

“We do know that the buyer was from China and was moving to Toronto and was only in town for a week.”

Final thoughts on the process. “I’d recommend not holding off on offers. If someone wants to offer, find out what they want to offer. You can always go back to people who’ve looked at the house and see if they’re interested.

In terms of preparations, don’t get pushed around by contractors who tell you that you need to paint eight rooms and replace all mirrors. Buyers can generally see beyond paint. You don’t have to redo your whole house.”

Original purchase price: $122,500 in 2001

Asking price: $270,000

Selling price: $265,000

With Elisa Holland’s transient military career, which has included tours in Afghanistan, and her husband’s job as a consultant in Alberta’s oil patch, the couple has lived apart for eight years. They finally decided to list their Calgary home for sale on April 1 and move together to Kingston, Ont. They bought the two-storey townhouse with three bedrooms, one and a half baths and two parking spaces for $122,500 in 2001. They listed the 1,500-square foot property for $270,000.

What were your home selling goals? “We wanted to put it at a fair price to sell quickly so we could buy a house in Kingston; it allowed us to buy our dream house. Kingston is a very stable market whereas Calgary is the exact opposite. My aunt and uncle have a fully detached house with a two-car garage in Barrie Ont.; it’s listed at the same [price] as our townhouse.”

Describe your home selling strategy. “I had interviews with three realtors. You have to pick a realtor who understands your residence. The reason why we ended up going with Michelle [Russell, a realtor at Royal Lepage], she understands townhouse/condos and first-time buyers.

You want to make sure you have very neutral décor. You want it so that if someone else walks in, they don’t see that it’s your house but they can picture themselves there. If you have carpets, you want to take those up so it’s a clean line across the floor. If you have an area rug, it cuts up the space. If you have a pet, you want to remove all traces that you have one. Even before a realtor came over, I took photos and very harshly critiqued them.

Knowing when to put it on the market is key. Most people want to keep their kids in school and they’ll start looking in March/April.

What did the home finally sell for in the end? Our price that we’d be happy with was anything over $260,000. We ended up with two offers: $263,000 and $265,000. We ended up selling it for $265,000, with fewer conditions (they didn’t want a home inspection) and they already had their financing in place.

Final thoughts on the process. Go with your gut feeling, especially if you get multiple offers. Your realtor will give you a sense of what the buyer is like. The $263,000 offer that came in, I honestly felt sick to my stomach. I got a sense that there was something not quite right. Make sure you do your research on your realtor. Don’t always go by someone’s advertising. On the whole, the majority of good realtors will never have to advertise, it’s all word of mouth.

Original sale price: $245,000 in 1995

List price: $689,000

Sale price: $700,000

Asking price After living in a two-bedroom bungalow in New Westminster for 19 years, Bob Harris looked at the backyard one day and said, “I just don’t want to do it anymore.” The 68-year-old retired union rep wanted to downsize. He had bought the house for $245,000 and listed it for $689,000. Meanwhile, he saw a two-bedroom condo that he liked and he put an offer on it.

What were your home selling goals? “It seemed like a good time [to sell] in New Westminster; house prices were going up and condos were going down. The spread between the two was as good as it has been in a long time.”

Describe your home selling strategy. “The rush was on. We got it ready to show within a few days – decluttered, depersonalized it.

My real estate agent Dave [Vallee] had sold a couple [of homes] in the same shape as mine; he had sold one for $683,000. We put it at $689,000, hoping to get some competing offers.

In less than a week, we had an open house on a Sunday. The next day there were three offers, all higher than the asking price…$692,000, $699,000 and $700,000.”

Knowing when to put it on the market is key
What did the home finally sell for in the end? “Two of them were subject to financing. The [homebuyer offering] $695,000 had the money in cash. Her real estate agent was there that night at the house presenting the offer and she was waiting in the car. We said, ‘Would she be willing to move to $700,000 to meet the other offer?’ and she did.”

Final thoughts on the process. “It helps to have a realtor who knows the area that you’re buying and selling in. In going to a lot of open houses, you’d go to ones where the realtors were from outside the area – so there were a lot of questions they couldn’t answer.

If something needs painting, paint it. I went to some places and they were messy. It just doesn’t make you necessarily want to buy. The place that I did buy ironically, the person had been relocated back east and said, ‘Take it as it is.’ They probably could’ve asked for more if they had done a few things.”

Article Source: Financial Post
Illustrations by Chloe Cushman, National Post

HOME OF THE BRAVE

More Albertans willing to brave rising prices and purchase a home
People confident in getting into the real estate market
By Mario Toneguzzi 
Calgary Herald April 10, 2014 

CALGARY - Despite high real estate prices, Albertans have a renewed interest in buying a home, according to the 21st Annual RBC Home Ownership Poll.

The poll, which was released Thursday, said the number of those intending to buy a home in the province is up from 22 per cent in 2013 to 28 per cent this year, “showing a renewed strength in the market from last year.”

“We saw a drop in purchasing intent last year in Alberta, so this renewed intent in 2014 shows that people in the province are confident in their ability to get into the market and invest in a home,” said Don Peard, regional vice president and mortgage specialist with RBC.

“There’s a couple of key factors. Number one being, certainly we were predicting a year ago and even more than that an increase in interest rates and that really hasn't transpired. Even if it does transpire, I don’t believe it will be as severe as some people were anticipating. That’s a huge factor in affordability and certainly impacts peoples’ intent to purchase.”

Peard said discussion about the levels of consumer debt has had an impact on peoples’ savings habits with better results in recent years, which means they are able to have enough money for down-payments.

“And of course in Alberta, comparatively speaking, affordability still remains very well particularly when we compare pricing and affordability with other larger centres in Canada. Alberta still remains very affordable. There’s no question the intent to purchase has increased,” said Peard.

Recently, the Canadian Real Estate Association said Alberta will lead the country with the highest annual growth rate in prices over the next two years in the resale housing market.

It said average MLS sale prices will climb in the province by 3.9 per cent this year to $396,000 and by another 2.5 per cent in 2015 to $406,000.

The association said Alberta will see annual sales activity increase by 0.8 per cent this year to 66,600 and then lead the country in 2015 with 3.9 per cent growth to 69,200 sales.

In February, MLS sales were up by 1.8 per cent year-over-year in Alberta to 4,595 and the average MLS sale price saw a yearly increase of 7.6 per cent in the province to $407,540.

“The volatility and fluctuations in some of the other larger Canadian cities we just don’t experience that in Alberta. There’s good, solid general appreciation in home values but it’s certainly not big spikes and bubbles,” said Peard.

“Lots of fear and talk of real estate bubbles in the past two or three or four years and I think the general consensus now is that’s really probably not going to happen at all and there’s lots of good empirical data to support that and we've seen good positive changes in the Vancouver and Toronto markets and of course we’re just that much more fortunate here in Alberta with having one of the best economies in the country.”

Photo By: Danielle Nanni

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.

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.

AFFORDABILITY EASING

Calgary housing affordability easing
Sharp rise in household income helping
By Mario Toneguzzi 
Calgary Herald October 29, 2013

CALGARY - A sharp rise in average household income is keeping Calgary house price affordability in check, says a new report released Tuesday by Desjardins Group Economic Studies.

The report’s affordability index showed that it is only slightly under the historical average in Calgary, despite relatively high home prices of $438,793 in the third quarter.

It said the average household income of $110,000 “makes home purchases easier” in Calgary.

But the report said the Canadian housing market is now less affordable than it has been on average for the last 25 years.


“This decline stems from average home prices outpacing household income in the third quarter as well as a small hike in mortgage rates,” said the report.

UP OVER 18%

Calgary helps fuel strong MLS sales in Canada

National transactions up more than 18% Y/Y

BY MARIO TONEGUZZI

CALGARY HERALD OCTOBER 15, 2013

CALGARY — Led by gains in Calgary, Edmonton, Greater Vancouver and Greater Toronto, Canada’s housing market experienced soaring MLS sales in September compared with a year ago.

The Canadian Real Estate Association said Tuesday that national sales of 38,147 during the month were up 18.2 per cent from September 2012.

That is roughly on par with the 10-year average in September. The 18.2 per cent increase compared to year-ago levels reflects weakened activity at that time, said CREA.

In Calgary, sales rose by 20.5 per cent to 2,475 transactions.

“Currently it is still a strong sellers’ market wherein we are seeing properties in prime locations come on the market and within a day being sold unconditionally for above listed price when priced accordingly,” said Grace Yan, a realtor with RE/MAX Real Estate (Central) in Calgary.

“We are still experiencing vast amounts of relocations from all parts of the world as Calgary’s oil and gas economy remains strong. We are expecting the rest of the year to remain a strong, healthy resale market due to the limitation of suburban developments and the long periods of time to obtain building permits for new builds along with limited public transportation in suburban areas.”

In September, sales year-over-year sales increases were 64.3 per cent in Vancouver (2,524 sales), 26.1 per cent in Toronto (7,411), and 24.8 per cent in Edmonton (1,712).

“Year-over-year increases in the sales over the past couple of months highlights how activity softened across much of the country following the introduction of tighter mortgage rules last summer,” said Gregory Klump, CREA’s chief economist.

“While the momentum for sales activity began improving a few months ago, it may be losing steam after having only just climbed back in line with an average of the past 10 years. Even so, one can see large year-on-year changes when comparing activity to a month like September 2012, when sales dropped to the lowest level for that month in more than a decade.”

CREA also said Calgary had the highest year-over-year increase in the MLS Home Price Index at 7.28 per cent. The aggregate for the 11 centres surveyed across Canada was 3.13 per cent. The index looks at benchmark properties in those centres.

Calgary average MLS sale price rose just slightly under the national average in September. It was up 8.2 per cent year-over-year to $435,934. Across Canada, the national average sale price was up 8.8 per cent to $385,906.

CREA said MLS sales in Alberta increased by 20.8 per cent in September to 5,694 while the average sale price was up 7.4 per cent to $381,308.

Diana Petramala, economist with TD Economics, said no two major markets in the country are the same.

“Momentum may prove more lasting in markets with fewer excesses, like Calgary and Edmonton where homes appear fairly valued and sales are being supported by decent labour markets and population growth,” she said.

Robert Kavcic, senior economist with BMO Capital Markets, said sellers in Calgary still have a slight upper hand.

Photos By: Nacoki

A PATCH IN THE VILLAGE

LOOKING FOR SOMETHING TO GIVE THANKS FOR THIS WEEKEND?

CHECK OUT  FALL FOR EAST VILLAGE ON SATURDAY.

REASONS TO COME:
-A Pumpkin Patch
-Four Food Trucks On-site
-Live Music
-Twenty Vendors Selling Fresh Produce to Delicious Eats.

DETAILS INCLUDED ON IMAGE OR FOLLOW THE LINK BELOW:
http://www.evexperience.com/events/sep-6/fall-east-village

TOO FEW

Lack of inventory fuelling price growth for Calgary housing market

Strong economy and influx of professionals

BY MARIO TONEGUZZI

CALGARY HERALD OCTOBER 10, 2013

CALGARY — A continued lack of inventory is fueling house price growth in Calgary.

The Royal LePage House Price Survey, released Thursday, shows strong year-over-year price increase in all housing types in the city as competition for homes is being driven by a strong economy and the influx of professionals.

The survey said average home prices were particularly buoyant in the third quarter with detached bungalows increasing 7.2 per cent year-over-year to $465,411, standard condominiums increasing 5.6 per cent to $263,087 and standard two-storey homes increasing 3.4 per cent to $446,411.

“A sustained period of low housing inventory coupled with a healthy economy and an influx of corporate sector workers has pushed prices up further,” said Ted Zaharko, broker/owner, Royal LePage Foothills. “For some time now too many homebuyers have been chasing too few properties.”

He said inventory is low in all categories, but particularly in detached bungalows, which are much rarer in Calgary compared to cities like Edmonton.

“Buyers are acting very quickly when homes are put up for sale, which is leading to frequent multiple offer situations on all housing types,” said Zaharko. “The aggressiveness of buyers is making it very difficult for first-time buyers to break into the market.”

He said third quarter activity was the most robust the Calgary market has seen in years, with buyers eagerly making offers on the limited inventory. In addition to normal demand, there was some extra activity coming from flood victims who were looking to move to locations on higher ground.

Nationally, the average price of a home in Canada increased between 1.2 per cent and 4.1 per cent in the third quarter of 2013.

The survey showed a year-over-year average price increase of 3.7 per cent to $418,686 for standard two-storey homes, while detached bungalows rose 4.1 per cent to $381,811. During the same period, the average price for standard condominiums saw a more moderate increase, rising 1.2 per cent to $246,530. Sales volumes surged in a number of regions, as Canadians re-entered the housing market after sitting on the sidelines for more than a year — marking the end of the most significant housing market correction since the 2008-2009 global recession, said Royal LePage.

Early signs in October indicate Calgary’s housing market is continuing its trend of increased sales and prices.

According to the Calgary Real Estate Board, month-to-date up to Wednesday, there have been 624 MLS sales in the city, up 37.14 per cent from the same period last year. The average sale price has increased by 7.82 per cent to $460,509 while the median price is up 6.96 per cent to $415,000.

New listings of 850 have risen by 10.10 per cent but active listings are down by 22.73 per cent to 3,927. Average days on the market to sell have also dropped by 6.52 per cent to 43 days.

“Prices are continuing to climb because of supply and demand. We have significant demand and we have across the board limited supply regardless of the price ranges. There is not a substantial variety to choose from and in some cases, such as in the case of bungalows, there has been a short supply in Calgary and new listings often get multiple offers,” said Rachelle Starnes, a realtor with Royal LePage Foothills in Calgary.

“In support of this statement, we are seeing in the Royal LePage offices more quick sales and multiple offers in the last quarter than previous quarters. The buyers are anxious and know that once a new listing comes onto the market, they need to act quickly. Having said that, there are still good listings sitting on the market that are a puzzle as to why they are not getting the proper activity. We just listed a property in the community of Bel Aire this week that will sell for a minimum of 10 per cent more than before the flooding occurred and may even see multiple offers at the higher price. Prices in the higher ground areas are escalating with the higher demand in the central areas of the City.”

Photo By: tommaync

BALLOONING SALES

Calgary and Vancouver lead Canadian housing market boom
August MLS sales balloon

By Mario Toneguzzi 

Calgary Herald September 16, 2013

CALGARY — Strong sales in Calgary and Vancouver led to a Canadian housing market boom in August as MLS transactions across the country were up 11.1 per cent compared with a year ago, according to the Canadian Real Estate Association.

In releasing its national data on Monday, CREA said sales in Vancouver were up 53.1 per cent from last year to 2,557 while Calgary transactions rose by 28.8 per cent to 2,830.
In Canada, total MLS sales in August were 40,350.

“The year 2013 has been a very strong year for the Calgary real estate market,” said Crystal Tost, a realtor with RE/MAX Realty Professionals in Calgary. “Earlier in the year we saw the market pick up as we transitioned into a sellers’ market as a direct result of low inventory levels. The market maintained strong with low inventory right through to spring. The summer months are traditionally a bit slower than spring months, but not for 2013. The market continued on with record sales without rest as inventory levels continued a downward motion into summer months.

“There is no doubt that the flood has greatly affected the housing market in Calgary not just for sales. Workers that have flocked to the city to aid in Calgary’s rebuilding and displaced people looking for temporary housing have exhausted the inventory in the rental market and in turn we are seeing rising rental prices. The raised rental market is making it sense for some first-time buyers to enter into the market. Bank interest rates are also on the rise. We are seeing many buyers out there with great interest rate holds nearing expiration so some of those buyers will be on a time crunch to save some money in interest.”

In August, Calgary had the highest growth year-over-year in the MLS Home Price Index, which tracks typical sales in nine major Canadian centres. Calgary prices rose by 7.39 per cent compared to the national aggregate of 2.92 per cent.

As for average prices, Calgary was once again a leader with an 8.1 per cent annual hike to $432,576, while Canada saw an 8.1 per cent hike as well to $378,369.

Ann-Marie Lurie, chief economist with the Calgary Real Estate Board, said the past two months have seen sales activity in the city shoot up higher than long-term trends.

“Both in July and August, those numbers were a little stronger. Part of that I think is due to the fact of the floods (in June),” said Lurie. “Because of that if you look at June we were running really in line with long-term trends — just above it. And then floods hit and in July and August we saw that activity increase. And some of that is from that demand being pulled forward.”
But other factors have also come into play in the local residential real estate market, she said, with stronger than expected migration this year.

“We still continue to have employment growth. The overall economic situation has done fairly well,” said Lurie. “That’s all the backdrop behind it as well. And wages have been increasing.”

There’s also the added possibility of increasing mortgage rates causing people to get into home ownership sooner.

In August, Alberta saw MLS sales increase by 17.8 per cent from last year to 6,124 while the average price rose by 7.1 per cent to $381,642.

On Monday, CREA also released its forecast for the rest of this year and 2014. It said Alberta MLS sales would grow by 6.2 per cent this year, the best in the country, to 64,100 and by another 2.3 per cent in 2014 to 65,600.

In Canada, sales are expected to drop by 1.0 per cent this year to 449,900 but expand by 3.5 per cent next year to $465,600.

The average sale price in Alberta is expected to rise by 4.8 per cent this year to $380,500, the second best growth rate in the country behind Newfoundland’s 6.1 per cent. Alberta is then forecast to lead the country in 2014 with 3.4 per cent growth to $393,300.

Canadian average sale prices are forecast to grow by 3.6 per cent this year to $376,300 and by another 1.7 per cent in 2014 to $382,800.

“Sales activity dropped sharply around this time last year in the wake of tightened mortgage rules and has improved since then, so a sizable year-over-year increase this August was expected,” said Gregory Klump, CREA’s chief economist, about the national August sales data.

“Buyers who put off purchase decisions or who were otherwise sidelined by tighter mortgage rules and lending guidelines implemented last year were anticipated to return to the housing market. That said, the upward trend and levels for activity in recent months has been steeper than expected, but that may not last.


“Recent increases to fixed mortgage rates caused sales to be pulled forward as buyers with pre-approved financing at lower rates jumped into the market sooner than they might have otherwise. That pool of homebuyers has largely evaporated so demand may soften over the fourth quarter. The outsized year-over-year gains may persist, however, due to weak sales toward the end of last year.”

PROVINCIAL 2ND QUARTER AFFORDABILITY

Alberta's housing market continues as one of Canada's most affordable: RBC Economics

RBC Economics

 Aug. 27, 2013, 2013 (Menafn - Canada NewsWire via COMTEX)

Alberta homebuyers continued to enjoy a relatively affordable housing market in the second quarter, despite some increases in ownership costs in late 2012 and early 2013, according to the latest Housing Trends and Affordability Report issued today by RBC Economics Research.

"Despite the fact that the market has kicked into higher gear since spring - thereby boosting prices and increasing ownership costs - Alberta continues to be a relatively affordable market," said Craig Wright, senior vice-president and chief economist, RBC. "We will likely see some disruptions in market activity trickle through in summer data from the floods in southern Alberta; however, we anticipate the strong provincial economy will endure, supporting further housing growth in 2014."

In the second quarter of 2013, RBC's housing affordability measures, which capture the province's proportion of pre-tax household income needed to service the costs of owning a home at market values, edged higher for all three categories tracked (an increase in the measure represents deterioration in affordability).

RBC's affordability measure rose by 0.7 percentage points to 32.4 per cent for bungalows and 0.4 percentage points to 34.5 per cent for two-storey homes. The measure for condominiums rose slightly by 0.1 percentage points to 19.6 per cent. All measures stood at a level below their long-term average, indicating that homeownership in the province remained historically attractive.

Calgary's housing market moving forward despite flood adversity.

The flooding that hit Calgary at the end of June did not appear to have slowed Calgary's housing market progression in the second quarter of 2013, says RBC. On a quarterly basis, home resales in the area posted a 12 per cent gain - their second-strongest improvement in four years.

"Though prices are now on a steeper upward trajectory, the effects have yet to undermine affordability in a material way. In fact, affordability levels in Calgary continue to be among the best in Canada," said Wright. "Demand for Calgary housing will continue to benefit from a strong provincial economy, solid labour market, fast-rising population and attractive affordability."

RBC measures for Calgary showed little movement across all housing categories in the second quarter of 2013. RBC's measure for two-storey homes rose by 0.5 percentage points to 33.6 per cent and for condominium apartments edged lower by 0.2 percentage points to 19.4 per cent; the measure for bungalows remained unchanged at 33.0 per cent.

RBC's housing affordability measure for the benchmark detached bungalow in Canada's largest cities is as follows: Vancouver 82.1 per cent (up 2.2 percentage points from the previous quarter); Toronto 54.5 per cent (up 0.5 percentage points); Montreal 38.1 (down 0.7 percentage points); Ottawa 37.1 (up 0.5 percentage points); Edmonton 34.0 (up 1.8 percentage points); Calgary 33.0 (unchanged).

The RBC Housing Affordability Measure, which has been compiled since 1985, is based on the costs of owning a detached bungalow (a reasonable property benchmark for the housing market in Canada) at market value. Alternative housing types are also presented, including a standard two-storey home and a standard condominium apartment. The higher the reading, the more difficult it is to afford a home at market values. For example, an affordability reading of 50 per cent means that homeownership costs, including mortgage payments, utilities and property taxes, would take up 50 per cent of a typical household's monthly pre-tax income.

Highlights from across Canada:

--British Columbia:
affordability takes one step back

Homeownership of single-family homes in the province became less affordable in the second quarter of 2013 amid a surge in resale activity since early spring following a near two-year long cooling stretch. RBC measures rose by 1.1 percentage points for bungalows, by 0.8 percentage points for two-storey homes, and by only 0.1 percentage points for condominiums.

--Saskatchewan:
seesaw affordability pattern endures

Affordability in the province continued to experience a seesaw-like pattern which has characterized this market in recent years. RBC measures rose modestly by 0.9 percentage points for bungalow and 0.5 percentage points for two-storey homes in the latest period, while the measure for condominiums inched lower by 0.3 percentage points.

--Manitoba:
housing affordability a mixed bag

The province's second quarter housing affordability developments proved to be a mixed bag with RBC's measure for the two-storey home category rising by 1.8 percentage points, the measure for bungalows down slightly by 0.2 percentage points, and the measure for condominiums edging up by 0.2 percentage points.

--Ontario:
steady as she goes

There was little change in housing affordability in Ontario in the second quarter. RBC's measures for both bungalows and two-storey homes rose by 0.2 percentage points relative to the first quarter, while the measure for condominiums remained flat.

--Quebec:
bucking the deteriorating affordability trend

The Quebec housing market bucked the national trend by enjoying a broad-based improvement in affordability in the second quarter. RBC affordability measure for the province fell by 0.5 percentage points for bungalows and 0.4 percentage points for condominiums; the measure for two-storey homes remained unchanged.

--Atlantic Canada:
affordability stuck in neutral

Atlantic Canada's housing affordability levels remained relatively static at neutral levels in the second quarter of 2013. Affordability measures moved marginally in all categories tracked by RBC: bungalows and condominiums edged lower by 0.1 percentage points and 0.2 percentage points, respectively; two-storey homes edged up by 0.1 percentage points.