How will flooding impact Calgary housing market for rest of year?
Questions on direction of sales and price growth
And the outlook for the rest of the year was rosy.
But the massive floods along the Bow and Elbow Rivers, which hit the city in recent days, has affected numerous neighbourhoods and thousands of homes, leaving housing industry experts wondering what impact it’s going to have on the local real estate market.
“We would expect in the short term you’re going to see some listings drop, especially in the areas that were impacted. That’s a natural reaction to it,” said Ann-Marie Lurie, chief economist at the Calgary Real Estate Board. “As far as demand goes, it can actually shift demand to other areas as the listings drop off. People might start considering other communities.”
Lurie said there are currently 700 MLS listings in the city in areas affected by the flood. But it’s hard to determine how many of those listings were affected by flood waters.
CREB had scheduled its mid-year report and forecast for the rest of the year for Monday but that was postponed due to the flooding.
At its annual forecast in January, the organization had predicted year-over-year sales growth of 2.2 per cent in 2013 with price growth of 2.9 per cent.
Year-to-date, until June 23, total MLS sales in the city of 11,723 are up 4.28 per cent from the same period last year. The median price of $400,000 has increased by 5.08 per cent and the average sale price has risen by 6.14 per cent to $455,509. New listings are down 2.49 per cent to 17,938 while active listings are off by 18.30 per cent to 4,830.
Lurie said she is reviewing the numbers and is not sure yet how much of an impact the flood will have on sales for the rest of the year. The area’s affected by the flood represent about 12 per cent of the total residential real estate market in Calgary.
“While it might stave off a bit of activity on the sales from what we originally were thinking we were going to have for the rest of the year, I don’t think it’s going to be significant,” she said.
“If there are less listings on the market because some of these properties are coming off, it actually could improve pricing activity in some of the other areas. You could actually see prices really continue to grow at the rates we’ve seen. So I wouldn’t expect much change there.”
Don Campbell, senior analyst and founding partner of the Real Estate Investment Network, said housing sales, listings and average prices will no longer reflect the true direction of the market.
“Calgary was on a nice and steady growth curve that was far from being over heated,” he said. “Over the coming months the number and quality of the sales transactions will not be on trend and will actually be ignored in the big picture analysis. The next few months, the housing stats will not be indicative of market health. As people focus their attention to getting their lives together, getting their properties together and resetting their housing goals.
But the massive floods along the Bow and Elbow Rivers, which hit the city in recent days, has affected numerous neighbourhoods and thousands of homes, leaving housing industry experts wondering what impact it’s going to have on the local real estate market.
“We would expect in the short term you’re going to see some listings drop, especially in the areas that were impacted. That’s a natural reaction to it,” said Ann-Marie Lurie, chief economist at the Calgary Real Estate Board. “As far as demand goes, it can actually shift demand to other areas as the listings drop off. People might start considering other communities.”
Lurie said there are currently 700 MLS listings in the city in areas affected by the flood. But it’s hard to determine how many of those listings were affected by flood waters.
CREB had scheduled its mid-year report and forecast for the rest of the year for Monday but that was postponed due to the flooding.
At its annual forecast in January, the organization had predicted year-over-year sales growth of 2.2 per cent in 2013 with price growth of 2.9 per cent.
Year-to-date, until June 23, total MLS sales in the city of 11,723 are up 4.28 per cent from the same period last year. The median price of $400,000 has increased by 5.08 per cent and the average sale price has risen by 6.14 per cent to $455,509. New listings are down 2.49 per cent to 17,938 while active listings are off by 18.30 per cent to 4,830.
Lurie said she is reviewing the numbers and is not sure yet how much of an impact the flood will have on sales for the rest of the year. The area’s affected by the flood represent about 12 per cent of the total residential real estate market in Calgary.
“While it might stave off a bit of activity on the sales from what we originally were thinking we were going to have for the rest of the year, I don’t think it’s going to be significant,” she said.
“If there are less listings on the market because some of these properties are coming off, it actually could improve pricing activity in some of the other areas. You could actually see prices really continue to grow at the rates we’ve seen. So I wouldn’t expect much change there.”
Don Campbell, senior analyst and founding partner of the Real Estate Investment Network, said housing sales, listings and average prices will no longer reflect the true direction of the market.
“Calgary was on a nice and steady growth curve that was far from being over heated,” he said. “Over the coming months the number and quality of the sales transactions will not be on trend and will actually be ignored in the big picture analysis. The next few months, the housing stats will not be indicative of market health. As people focus their attention to getting their lives together, getting their properties together and resetting their housing goals.
“Following this, we should see a shift to higher ground. After a traumatic event such as this, many will sit back and evaluate their lives, their housing choices. Most will choose to remain in the same region but there will be a larger than average cohort who will make the decision to move from flood-risk areas. The impact of these decisions won’t be felt all at once in the market, however there will probably be an increase, over the average, of listings in these areas in the following 12 months.”
He said the flood will play a role in the housing numbers for at least 12 months.
As far as home values for properties in areas hit by the flood, Lurie said that looking back at the flood of 2005 “it didn’t necessarily have a significant impact in these communities.”
“Long-term these are some fairly desirable neighbourhoods. It’s unlikely that you’re going to see their values change significantly,” she said.
mtoneguzzi@calgaryherald.com
Twitter.com/MTone123
He said the flood will play a role in the housing numbers for at least 12 months.
As far as home values for properties in areas hit by the flood, Lurie said that looking back at the flood of 2005 “it didn’t necessarily have a significant impact in these communities.”
“Long-term these are some fairly desirable neighbourhoods. It’s unlikely that you’re going to see their values change significantly,” she said.
mtoneguzzi@calgaryherald.com
Twitter.com/MTone123
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