Calgary Poised to Reach Record Highs for Average Home Sales Prices

Calgary poised to reach record highs for average home sale prices

Solid February MLS sales drive homebuying costs higher

 

By Mario Toneguzzi, Calgary Herald February 27, 2014 11:16 AM

                                                  

 

CALGARY - A low inventory is continuing to drive resale housing prices upward with the city poised to set numerous all-time records from February MLS sales.
As the housing market comes to the end of another month, Calgary is on the verge of hitting new highs for average sale prices and median prices in both the overall city market and in the single-family sector.
According to the Calgary Real Estate Board, from February 1-26, the average MLS sale price for all city sales was $485,085, up 6.94 per cent from a year ago while the median price has jumped by 7.80 per cent to $425,000. Also, the single-family home market has seen the average price soar to $553,077, up 8.16 per cent from a year ago while the median price has risen by 10.98 per cent to $485,000.
“We are seeing record sale prices throughout the city and throughout various price points. Plain and simple, buyers are getting desperate,” said Tamara Pilipchuk, a realtor with RE/MAX Realty Professionals. “With low inventory and competing offers becoming more and more common, we are seeing buyers get more aggressive in their hopes to secure a property. My clients know that if an appealing property comes onto the market, we must see it within hours or they know to expect that it will be sold the same day that it is listed.
“Momentum appears to be continuing to build, especially in entry-level pricing of product in all neighbourhoods. With the median home price on the rise, first-time homebuyers and those looking to enter the market are finding the biggest challenges. There is a multitude of reasons as to why we are seeing record sale prices and all-time record highs. Coupled with record low vacancy rates, Calgarians look to purchase their own homes instead of renting because of rental prices skyrocketing. As well, investors have rejoined the buyer pool looking to purchase rental properties to capitalize on market conditions.”
According to CREB, the average monthly MLS sale price record for all city sales is $466,466 set in June last year and the median price record of $417,250 was set in January of this year.
For the single-family home market, the average sale price record of $527,634 was established in December of last year as was the median price record of $463,500.
“My clients have competed with nine and 10 other offers the first night of a property being listed which is indicative of how unbalanced the buyer pool is in comparison to inventory. Sales and home prices are rising, hitting all-time record highs. People see opportunity in the resale market as new construction and lot prices increase making building your dream home unattainable for many. Low interest rates, low unemployment rates, high net migration and a booming economy in our city is the cause of this upward trend,” said Pilipchuk.
So far this month, total MLS sales of 1,672 in the city are up by 7.59 per cent from the same period last year. New listings have increased by 1.37 per cent to 2,444 but active listings are down 19.24 per cent to 2,850.
Single-family sales have increased by 1.18 per cent to 1,114 but new listings are down by 5.11 per cent to 1,596 and active listings are off by 22.02 per cent to 1,852.
“In an unfortunate metaphor given last summer’s floods, Calgary’s housing demand dam has burst,” said Don Campbell, senior analyst with the Real Estate Investment Network. “Those sitting on the sidelines waiting for a lull, combined with renters who are witnessing dramatic rental increases in key areas of the city, are combining with regular housing demographic requirements to push the demand curve up much more quickly than the available listings.
“This strong seller’s market, in the heart of the winter, has pushed average sale prices up more quickly than would be economically expected. Given this, we should see sellers begin to move into the market to take advantage of this profit opportunity.”

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Calgary to lead Canadian economic growth in 2014

3.7% hike forecast for Real GDP

 

By Mario Toneguzzi, Calgary Herald February 26, 2014 7:15 AM

  

 

 

Calgary is forecast to lead the country in economic growth this year.

Photograph by: Colleen De Neve Colleen De Neve , Calgary Herald

CALGARY - Calgary’s economy has strengthened considerably in the past few years with strong business and consumer confidence as the city is forecast to lead the country in real GDP growth in 2014.
A report released Wednesday by the Conference Board of Canada said Calgary’s economy will grow by 3.7 per cent this year followed by Regina (3.5 per cent) and Edmonton (3.4 per cent).
The board forecasts Edmonton to lead the country with average annual growth of 3.1 per cent between 2015-2018 followed by Calgary (2.9 per cent) and Vancouver (2.8 per cent).
Calgary placed fifth in the country in 2013 with 3.4 per cent growth behind Saskatoon (6.5 per cent), St. John’s (6.0 per cent), Regina (5.0 per cent) and Edmonton (4.6 per cent).
“In the first half of 2013, widespread gains in both the goods and the services sectors were setting the stage for another solid year in Calgary,” said the board’s Metropolitan Outlook. “However, a devastating flood in the summer temporarily shut down the city.
“In 2014, Calgary’s economy is expected to improve slightly, as better results in the manufacturing and construction industries will coincide with improved services sector growth.”
The board said Alberta’s economic growth was 3.2 per cent in 2013 and is forecast to be 3.4 per cent this year then average 2.4 per cent each year between 2015-2018.
“Alberta has relied heavily on capital investment to drive economic activity, and investment has been oriented increasingly toward the province’s energy sector. But transportation constraints present a downside risk to future investment in the province, as the inability to move product to refining centres is a key reason for the lower prices received for Canadian oil,” said the board.
“Several pipeline projects are being considered that would help alleviate some of the problem, but to date none have gained regulatory approval. The Conference Board believes that construction on at least one substantial pipeline will begin in the next 18 months. As a result, real business investment will increase by 4.7 per cent in 2014, followed by another 4.4 per cent in 2015.”

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Calgary housing prices forecast to rise in short-term

Year-over-year growth of 5 - 6.9% predicted

 

By Mario Toneguzzi, Calgary Herald February 24, 2014                          

 

Calgary home prices are on an upward trend.

Photograph by: Richard Buchan , THE CANADIAN PRESS

CALGARY - The short-term expectation for year-over-year MLS price growth for the existing home market in Calgary is one of the highest in Canada, according to a report released Monday by the Conference Board of Canada.
The board said Calgary housing prices in the short-term can expect to see annual growth in the range of five to 6.9 per cent as the city is in a seller’s market at this time.
The report said the seasonally-adjusted annual rate of sales in the city in February was 29,844, up 6.6 per cent from January and 13.7 per cent year-over-year.
However, listings of 39,564 are down 3.8 per cent both on an annual and a monthly basis.
The price in February was up to $455,785, representing a 5.8 per cent hike from a year ago and a 1.4 per cent increase from the previous month.

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CREB: Calgary Home Sales Climb More Than 17 per cent in January

CREB: Calgary home sales climb more than 17 per cent in January

By: Michael Aynsley February 4, 2014

Photo: madlyinlovewithlife/Flickr
Following a strong year of sales growth, Calgary home sales climbed 17.17 per cent in January compared to the same month last year. (Tweet this stat)
According to the Calgary Real Estate Board (CREB) a total of 1,440 homes sold on the Multiple Listing Service last month, the highest January levels since 2008.

“Sales growth continues at the double digit pace seen over the later portion of 2013, mostly due to the gains in the condominium sector,” CREB chief economist Ann-Marie Lurie said.
Indeed condo and townhouse sales were 33 per cent higher last month then they were in January 2013.

“Consumers looking for more affordable product turned to Calgary’s condominium market, which was the only sector to record growth in new listings, compared to January 2013,” CREB president Bill Kirk said. “The improvement in listings helped ease some of the tightness in the condominium market, however overall conditions continue to favour the seller.”
The average sale price of a Calgary condo hit $314,677 in January, a 12.36 per cent increase from the same month last year. (Tweet this stat)
Still, while the year-over-year condo price gains have pushed into double digit growth territory, the unadjusted benchmark price remains 5.5 per cent lower then levels recorded during the high.
Click here to review the complete sales and pricing data for each housing form.

Calgary Housing Market

CREB

Sizzling Calgary housing market remains hot

Annual price hike the highest in Canada

 

By Mario Toneguzzi, Calgary Herald February 14, 2014

 

CALGARY - Calgary’s sizzling resale housing market is showing no signs of cooling as the city recorded the highest year-over-year hike in prices across the country in January - and early indications show February is experiencing a continued escalation in what it costs to buy a home.
The Canadian Real Estate Association released its monthly MLS data on Friday and listed Calgary as the top centre in the country for annual growth in the MLS Home Price Index at 8.98 per cent. Nationally, prices, in the 11 centres surveyed, rose by 4.83 per cent.
Crystal Tost, a realtor with RE/MAX Realty Professionals in Calgary, said the city’s housing market has started 2014 with a bang. The market has not slowed down at all from the healthy pace it set in 2013.
“We are seeing multiple offers in all price points. Obviously the lower the price point, the larger pool of buyers there is and hence a greater likelihood of multiple offers in the lower price points,” she said.
But it’s also taking place in the luxury market with 63 homes sold for more than $1 million and eight of those sales involving bidding wars, including a $3.5 million home, added Tost.
“Eager buyers that want to find a home will have to make sacrifices to get to the homes the day they are listed in order to have a chance at buying the home of their dreams. While true average days on market are currently at 40 days, this is not the case in most sales,” she said. “Homes that offer a good location, in desirable areas, priced reasonably will sell in hours to a few days in the current marketplace.”
In January, CREA said Calgary MLS sales of 1,802 were up 14.6 per cent from a year ago while in Alberta they rose by 5.6 per cent to 3,681 transactions. Across Canada, there were 23,636 sales, up 0.4 per cent.
The average MLS sale price in Calgary in January rose by 6.0 per cent to $444,153 while in Alberta it was up 7.3 per cent to $388,073. In Canada, the average of $388,553 represented a 9.5 per cent hike from a year ago.
According to the Calgary Real Estate Board, between Feb. 1-13, there have been 794 MLS sales month-to-date in Calgary, which is up 2.72 per cent from the same period a year ago. The average sale price of $496,665 has increased by 9.35 per cent and the median price is up by 8.42 per cent to $428,250. Active listings of 2,717 are down 19.47 per cent while new listings are off by 1.57 per cent to 1,253.
Tost said in-migration to the city continues to contribute to the already busy real estate market and there is more activity from move-up buyers who have the ability to upgrade because of more equity in their homes now as the prices have gone up.
“With an estimated 30,000 people moving to Calgary for 2014 our housing market and rental markets will remain strong throughout the balance of the year,” said Tost, adding the current market is not ideal for buyers.
“It places so much stress on them to make fast decisions, life changing decisions on a 10-minute visit to look at a home. Sellers still have to be mindful when pricing their home. Smart savvy buyers won’t over pay on an overpriced home, but are more likely to bid in a bidding war on a home that seems like a fair offering.”

Francis Fong, senior economist with TD Economics, said January was the fifth consecutive month in which sales have fallen across the country, marking the longest string of monthly declines since the recession in 2008.
“No doubt the frigid temperatures and heavy snowfall across much of the country prevented many from diving in to the January market,” said Fong. “As such, when the spring thaw . . . makes its way across Canada, a bounce back in sales activity would be entirely unsurprising. Indeed, the upcoming spring market could get an additional boost as prospective buyers lock-in to the recent pullback in mortgage rates.”
Doug Porter, chief economist with BMO Capital Markets, said Canadian home sales are coming back down to earth after a short-lived burst last summer.
“Of the 26 biggest cities, 13 reported double-digit moves from a year ago, with seven on the plus side and six on the downswing,” said Porter, adding that prices remain surprisingly sturdy.
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Calgary repeat home sale prices rise 7.1%

Second biggest jump in Canada behind Vancouver’s 7.5%

 

By Mario Toneguzzi, Calgary Herald February 12, 2014                          

 

Calgary resale home prices are on the rise.

Photograph by: Darren Calabrese , THE CANADIAN PRESS

CALGARY - Calgary had the second best year-over-year growth rate in prices for repeat home sales in January, according to the latest Teranet-National Bank National Composite House Price Index released Wednesday.
It said Calgary’s annual increase was 7.1 per cent which was behind only Vancouver’s 7.5 per cent.
The national composite, of 11 major centres surveyed, rose by 4.5 per cent.
The 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.
Toronto saw an annual increase of 5.8 per cent.
Sonny Scarfone, economic analyst with TD Economics, said the index surprised on the upside with a larger gain in momentum than expected across the country.
“Home price gains are still exceeding income growth by a considerable margin, especially in larger real estate markets like Toronto and Vancouver. A low supply of new listings is an important contributor to the upward pressure on prices,” said Scarfone.
“However, as U.S. and Canadian economic growth accelerates and the Federal Reserve continues to taper its quantitative easing program, North American bond yields are likely to rise over time and this will be reflected in mortgage rates. As a consequence, the current stronger-than-expected prices are likely to soften over the medium term.”
The index nationally rose 0.4 per cent from December to an all-time high. It was the largest monthly rise in five months.
The gain from a year earlier exceeded the cross-country average in four of the 11 markets: Vancouver, Calgary, Toronto and Hamilton (5.1 per cent). It was close to the average in Edmonton (4.4 per cent) and Winnipeg (3.9 per cent). It was minimal in Montreal (0.8 per cent) and Quebec City (0.6 per cent). Prices were down from a year earlier in Victoria (5.7 per cent), Halifax (2.9 per cent) and Ottawa-Gatineau (0.6 per cent). The 12-month decline was a first for Ottawa-Gatineau, the 11th straight for Victoria and the fourth in six months for Halifax, said the report.
On a monthly basis, price increases were led by Vancouver (1.1 per cent), Toronto (0.5 per cent) and Quebec City (0.5 per cent) led the composite index. Calgary equalled it. Hamilton prices were up 0.3 per cent, Winnipeg and Montreal prices 0.2 per cent. Edmonton was flat on the month. Prices fell 0.3 per cent in Victoria, 1.1 per cent in Ottawa-Gatineau and 1.7 per cent in Halifax. The January rises in Montreal and Quebec City interrupted runs of five consecutive monthly declines. For Ottawa-Gatineau it was the fifth straight monthly decline, for Victoria the fourth and for Halifax the second. For Vancouver it was a ninth straight monthly rise, for the composite index the 10th in 11 months, said the report.
“There are signs that national house price inflation is close to peaking. The earlier strength in existing home sales, triggered by fears of higher mortgage rates, has begun to fade,” said David Madani, economist with Capital Economics. “January’s preliminary data reported by the regional real estate boards indicate that national home sales declined for a fourth consecutive month.

“The drop back in the months’ supply of inventory is already consistent with annual house price growth rate remaining around 4.0 per cent. If we are correct about home sales drifting lower this year, it will once again start to put downward pressure on house price inflation.”
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Listings remain down in Calgary resale housing market

Pressure on prices which continue to rise

 

By Mario Toneguzzi, Calgary Herald February 3, 2014 2:00 PM

 

CALGARY - Pressure on prices in Calgary’s resale housing market continued in January as MLS listings remained at lower levels compared with a year ago.

According to the Calgary Real Estate Board, new listings of 2,393 for the month were down 4.01 per cent from January 2013 and active listings were off by 18.16 per cent to 2,524.
With sales growing by 17.17 per cent to 1,440, that help spike prices to record levels for the month.
CREB said the median price jumped by 6.71 per cent to $417,250 while the average MLS sale price rose by 5.09 per cent to $462,168. The board, in releasing its official statistics on Monday, said the overall benchmark price in the city, which if what it calls typical property sales, rose by 9.46 per cent to $429,100.
According to Mike Fotiou, associate broker with First Place Realty, January also set a record for most luxury home sales for the month. There were 41 MLS transactions of at least $1 million, eclipsing the previous record of 36 set in 2007.
Last year, Calgary experienced a record year for total luxury home sales of 727 with 10 months setting records. The only months in 2013 that didn’t set luxury home sale records were January and December.
Grace Yan, a realtor with RE/MAX Real Estate (Central) in Calgary, said property inventory has steadily declined over the past year due to a high volume of migration of people to the city, a low unemployment rate and better job opportunities.
“As a result, turnkey properties that are well priced, whether it’s a condo, fixer-upper, starter homes to high-end luxury homes, are selling within days and realtors are lined up outside taking turns for showings resulting in competing offers selling well above list price,” she said. “The market is currently so competitive that we are seeing unconditional or minimal condition offers and I’ve recently seen offers even as high as $70,000 over list and selling within the first day.
“The shortage of listings is really tough on buyers and disappointing when they place their best offer on their perfect home and not to even be close to other competing offers. On the other hand it’s excellent for the sellers who are pleasantly surprised what their properties are selling for. We typically see listing inventory rise come the spring and summer. Real estate, like any other investment, has its ups and downs. It’s just trying to find the right time and the right place in the current hot market.”
The inventory of active listings in Calgary year-over-year hasn’t been positive since February 2011.
Ann-Marie Lurie, CREB’s chief economist, said the overall trend of a declining inventory in the resale housing market has been around since March 2011.
“They had actually too much for a period of time. There was really an excess amount of inventory,” she said. “And a lot of that was working through the system . . . There was over supply in the market at that time frame.
“It’s really over the past year and into this year that we’ve seen those levels to continue to decline . . . They’ve been falling. What I’ve been watching has been that rate of decline which had actually started to ease . . . Towards the beginning of 2013, and into 2012, we were in those high 20 per cent declines, like almost 30 per cent declines, over the previous year. As you go through the later portion of 2013, the levels came off a bit. It’s still declining but not declining as much.”

She said sales have been increasing at a greater rate than the level of new listings.
In January, MLS sales for different housing categories and their percentage increase from last year were: single-family, 974, 10.93 per cent; condo apartment, 260, 27.45 per cent; condo townhouse, 206, 40.14 per cent; and towns, 251, 2.45 per cent.
The average sale prices and their annual hikes were: single-family, $520,686, 4.80 per cent; condo apartment, $314,678, 12.36 per cent; condo townhouse, $371,638, 15.92 per cent; and towns, $379,053, 8.54 per cent.
The benchmark prices and their year-over-year growth were: single-family, $476,700, 9.11 per cent; condo apartment, $280,600, 11.66 per cent; condo townhouse, $308,100, 8.72 per cent; and towns, $346,500, 5.26 per cent.
“Listings are low in Calgary due to a number of factors. However one of the biggest is the lack of housing options available in Calgary and region due to the combination of increased demand through population growth, the flood zone financing and insurance issues and lack of new product readily available,” said Don Campbell, senior analyst with the Real Estate Investment Network.
“This reduction in housing options brings pause to the homeowner who was considering selling their homes to move within the city or region. When homeowners do not have confidence that they will be able to find an appropriate property to replace the one they are considering to sell, then they delay the decision.”
Also on Monday, TD Economics released a housing report forecasting sales in Calgary to grow by 5.8 per cent this year and by another 2.1 per cent in 2015. It forecast the average price for existing home sales to rise by 3.5 per cent this year and by 1.2 per cent next year.
The report said Calgary’s sales to new listings ratio was 70.2 per cent in 2013 and forecasts that to rise to 73.1 per cent in 2014 before falling back to 69.9 per cent in 2015.
TD also said the percentage of income an average household would have to devote to mortgage payments in Calgary in 2013 was 24.9 per cent in 2013 and it is forecast to rise to 25.0 per cent this year but fall back to 24.6 per cent in 2015.
Diana Petramala, economist with TD Economics, said current interest rates are likely unsustainable, nor are they expected to increase to more normal levels in the near future.
“Overall, given the expectations of a modest increase in interest rates, home prices are likely roughly 10 per cent overvalued,” she said of the national housing market. “Housing is very regional, and some markets are more vulnerable than others. For instance, the overvaluation in Toronto, Vancouver, Montreal and Ottawa is likely more significant than that found in markets in the Prairie and Atlantic Regions.

“Looking forward, the combination of softer demand and rising supply of homes for sale on the market will likely pull some steam out of home price growth. Slower home price growth, rising incomes and only modestly rising interest rates will help keep housing in check over the next few years.”
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Millennials to Drive New Homes Market

Millennials to drive new homes market 1

By Myke Thomas ,Calgary Sun

First posted: Saturday, January 25, 2014 02:00 AM MST

 

 

The Millennials are coming! The Millennials are coming!
Actually, they’re already here and they’re flexing their muscles, says Don Campbell, founding partner, senior analyst, the Real Estate Investment Network.
The Millennials are the children of the baby boomers, the generation that changed just about everything forever, but look out for the kids.
“Everyone’s focusing on baby boomers because they’re the biggest cohort, they (have always driven the market) but I tell you, Millennials are actually larger than the baby boomers.
“These people are going to be driving the new home business for the next decade or 15 years (and) you can continue to sell to the 50-year- olds or you can start shifting what you’re building.
“(The Millennials) want something different.”
Calgary’s net migration has reached near record levels since 2012 and many of those newcomers are Millennials, many who are renting, but that is changing, says Campbell.
“When they look at $1,400 rent per month when the mortgage for a starter home is $1,000 per month, they’re going to say it’s time to buy,” he says. “It takes two to two-and-a-half years, depending on the economy, for them to move from renters to buyers. I’m looking at this massive migration (and) I know 18 to 24 months from now the demand on (Calgary’s) housing is going to be massive.
“Yes, it’s going to be kind of nice this year, it’s going to be good, but if you think you’ve got it good this year, you’d better be starting to plan for the long term, because it’s coming.”
Many of the baby boomers’ kids are barnacles (never left home) or boomerangs (left but came back) and the extra time in their parents’ homes has defined their homeownership expectations.
“There will be increased demand for starter homes, but they can’t be the starter homes (built before),” says Campbell. “The starter home market has to be polished a little bit more (than before). It has to be a little bit nicer finish because they are barnacles and/or boomerangers who have lived in mom and dad’s a lot longer than any of us did (and got used to upgrades).”
The Millennials are not yet a car-oriented generation, so the distance from their homes to efficient transportation systems, measured in minutes, is a major factor in their choice of location, says Campbell.
“So many don’t have driver’s licenses (so) when somebody says ‘you know what, we need to spend two billion dollars on a rail that’s going to go from the southeast quadrant,’ cheer them on,” says Campbell. “Distances aren’t measured in kilometres anymore, they are measured in minutes."
“The ring road is going to change what’s going on (and) if you can, develop around LRT, around 800 metres from a station, because people will walk 800 metres to that station, especially Millennials because they don’t have a car.”
The Millennials’ influence is being felt now.
“Calgary is getting younger, the target market is getting younger, changing what they’re looking for,” says Campbell. “They’re going to physically change the city.”