February MLS sales in Calgary hits $1.1B

February MLS sales in Calgary hits $1.1B

Year-to-date sales 14% ahead of last year’s pace

By Myke Thomas ,Calgary Sun

First posted: Saturday, March 22, 2014 02:00 AM MDT

Year-to-date residential transactions of all housing types in the city on the MLS system were valued at $1.9 billion, an increase of 21% over the first two months of last year.

 

Housing contributes greatly to the Calgary economy, says the Canadian Real Estate Association’s (CREA) February report.
Last month, residential transactions of all types in the city on the MLS system were valued at $1.1 billion, bringing the year-to-date sales value to $1.9 billion, an increase of 21% over the first two months last year.
That’s money spent on home purchases and does not include expenditures for things such as moving, furniture, professional services and other needs related to home buying.
The Calgary market is approaching the level of activity seen in 2006/07, which is borne out in the CREA report. Total residential sales in February of homes of all types reached 2,363 units, a 14% increase over February last year, with year-to-date sales to the end of February hitting 4,165 units, also 14% ahead of the first two months of 2013.
The average sales price in February was $460,000, up from $437,000 last year, but caution must be used with these numbers.
While it is informative as to the health of the market, the price should not compared to any listed prices, because it includes housing of all types.
A better number for comparison is the benchmark price, which can be found on the Calgary Real Estate Board (CREB) website (www.creb.com).
According to CREB, a benchmark home is one comprised of a set of specific attributes (for example, a three-bedroom, 1,000-sq.- ft. home with finished basement) that is typical for the area where it is located. So, if you are looking for such a home in the northwest, the benchmark price compares only those types of homes in the northwest.
A benchmark home price is more restrictive than the average price or MLS Home Price Index, both of which are based on a broader set of properties in each housing category.
CREB’s website for the period March 1 to March 18 showed total residential sales in Calgary were 1,345 units, while year-to-date sales were at 4,637 homes, up from 4,133 sales to mid-March last year.

Home price growth best in Alberta over next two years

Forecast sees annual hikes of 3.9% and 2.5%

By Mario Toneguzzi, Calgary Herald March 17, 2014                         

 

Alberta will lead the country in residential price growth for the next two years.

Photograph by: Colleen De Neve , Calgary Herald

CALGARY - Alberta will lead the country with the highest annual growth rate in prices over the next two years in the resale housing market, says a new report released Monday by the Canadian Real Estate Association.
CREA’s report 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.
Nationally, prices are expected to rise by 3.8 per cent this year to $397,000 and by 1.1 per cent in 2015 to $401,400.
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.
It said Canadian MLS sales growth is expected to be 1.3 per cent in 2014 to 463,700 units and 1.2 per cent in 2015 to 469,400 units.
In its report, CREA said Calgary continues to lead the country with 9.10 per cent year-over-year growth in the MLS Home Price Index in February compared with the national aggregate of 5.05 per cent for the 11 major centres surveyed.
Robert Kavcic, senior economist, with BMO Capital Markets, said Calgary’s housing market is “heating up quickly again” and the 3.5 months’ supply of inventory across Alberta matching the lowest level since 2007.
He said the benchmark prices in the city surpass the 2007 peak, “with a strong economy, demographics and tight supply helping.”
Robert Hogue, senior economist with RBC Economics, said Calgary and Edmonton are still among the few areas in the country “where supply appears to be tight relative to demand.”
In February, MLS sales in Calgary rose by 14.1 per cent from a year ago to 2,363 units. They were up by 1.8 per cent in Alberta to 4,595 and by 1.9 per cent in Canada to 31,677.
The average MLS sale price in February saw yearly increases of 4.9 per cent in Calgary ($460,338), 7.6 per cent in Alberta ($407,540) and 10.1 per cent in Canada ($406,372).
Diana Petramala, economist with TD Economics, said the overall Canadian existing home market continued to show signs of a soft landing in February as sales are 9.3 per cent below the peak levels reached in August 2013.
“The performance of Canada’s housing market over the last few months is largely reflective of a cooling in Canadian housing demand,” said Petramala. “Sales are moving at a pace that is neither too hot, nor too cold. A drop in interest rates over the first two months this year . . . will likely help contribute to a modest pick-up in sales activity in the months ahead, but activity is likely to remain below the robust pace of the last five years.
“The only thing that has not happened yet is a slowing in Canadian home price growth - but that too will likely come. For one, home price growth is being supported by too few homes for sale in many major markets - giving sellers more of the bargaining power.”
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Calgary Housing Boom is Comming, but Won't Approach Pace of 2007: BMO

Calgary housing boom is coming, but won't approach pace of 2007: BMO

Bank economist says pace isn't 'a bubble rearing its head'

By Mario Toneguzzi, Calgary Herald March 14, 2014

Calgary’s housing market saw strong gains in sales and prices in 2013.

Photograph by: Ted Rhodes , Calgary Herald

CALGARY - Calgary’s housing market is quickly heating up again and barring a sudden drop in oil markets, home prices have further to run and homebuilders will get busier in the year ahead, but a throwback to the frenzied pace of the 2006/07 boom is still a stretch, says new report released Friday by BMO Capital Markets.
But it said Alberta was bound for another housing boom.
“For policymakers, this is clearly a case of superior economic and demographic fundamentals at work, not a bubble rearing its head,” it said.
Robert Kavcic, senior economist with BMO Capital Markets, said in an interview with the Herald that the main difference today from the previous boom is that time was a “pretty unique situation and I don’t think we’re going back there.”
The economy was stronger then even though Alberta today is head and shoulders above the rest of the country now. The pace of growth is not comparable with what was experienced in 2006. Today growth is in the 3.5 per cent range. Back then growth was four per cent to five per cent.
“The last energy boom came on the province pretty quickly and there was really a lack of housing supply back then. You saw a real sudden pick up in economic growth and an influx in population and homebuilders were really scrambling to get homes built fast enough to satisfy that demand,” said Kavcic.
“So the market was a lot tighter back then too. Now we’ve added a good almost 10 years of strong economic performance in Alberta so the market is much more well supplied this time around.”
The BMO report looked at various aspects of Calgary’s housing market today comparing them with 10-year averages and the peak of 2006/2007.
The average house price of $443,000 (the latest three-month average) is higher than the 10-year average of $369,000 and $437,000 during the peak.
The sales-to-new listings ratio today is 75 per cent, up from the 61.5 per cent 10-year average but down from 90.3 per cent at the peak.
Month’s supply, which measures the number of months it would take to absorb the inventory with current sales activity, is 3.8 today, down from the 10-year average of 4.3, but way up from the 1.2 during the peak.
The price-to-median income ratio is 4.1 today, just slightly up from the 10-year average of 3.8 and just slightly down from the 4.7 peak.
BMO also measured the mortgage payment as a percentage of median family income. It is 24 per cent today which is the same as the 10-year average but down from 35 per cent at the peak.
The completed and unabsorbed inventory for new homes is 511 today, way down from the 10-year average of 895 but up from the peak of 481.
Calgary’s apartment rental vacancy rate is 1.0 per cent today. It’s 10-year average is 2.3 per cent. During the peak it was 0.5 per cent.
“Alberta’s rapidly-strengthening market which, like the province’s broader economic performance, is quickly decoupling from the rest of the country,” said the report.
It said the province sits head-and-shoulders above the rest of the pack on a variety of measures including GDP, employment and retail sales growth.

“The stark economic outperformance is magnified by the pull it is having on population from other regions of the country. Population growth in the province has surged to 3.5 per cent year-over-year, the fastest pace in more than 30 years, with nearly 50,000 interprovincial migrants flocking to the province in the latest year, or a hefty 1.2 per cent of the population. Every province in Canada is now seeing a net outflow of migrants to Alberta,” explained the report.
In a blog on his website, Mike Fotiou, associate broker with First Place Realty in Calgary, said the city’s housing market “is performing exceptionally well today, but we are nowhere near the frenzied level from 2006.”
In February 2006 there were 2,601 MLS sales or 40.3 per cent more sales than the 1,854 this February, he said.
In February 2006, 841 or 32.3 per cent of homes sold above asking compared with 364 or 19.6 per cent this February, added Fotiou.
“It may be hard to believe but there was even less inventory for sale then. There were only 826 single family homes listed in February 2006 compared to 1894 this year,” he said. “The sales-to-new-listings ratio in 2006 was at 96 per cent which meant nearly a home sold for every one that was listed. Last month the ratio was ‘only’ at 68 per cent – still a seller’s market but not at extreme as back then.”
Scott Bollinger, broker with the ComFree Commonsense Network, said 2006 was not so long ago but it really was a different time.
“In 2006, people were yakking about peak oil, $200 barrels, nowhere to go but up, up, up. That led to a lot of irrational exuberance, in the bigger economy and specifically in our housing market,” he said. “I think we’re a bit more realistic today, more aware of environmental constraints in oil and gas, market constraints, cost constraints. Considering the context, we’re pretty content with 3.5 per cent growth over seven per cent growth, which was just bananas. That same sense of realism tempers our optimism, and it extends to our housing market.
He said housing prices were pretty flat throughout the 1990s and the early part of the 2000s.
“Today’s market, too, is being governed by our memory of the boom, and more importantly what happened after,” added Bollinger. “People remember the sub-prime disaster in the U.S. Buyers are cautious now about over-paying. They’re making sure they can service those mortgages. And the banks have responded with their typical — and I’d say welcome — Canadian conservatism. There are no more 40-year, zero-per-cent down mortgages. Little tweaks in money policy and our overall outlook are steering us on a steadier course.”

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Calgary Posts Largest Growth in New Home Prices

Calgary posts largest growth in new home prices

7.0% hike from last year

By Mario Toneguzzi, Calgary Herald March 13, 2014 8:09 AM                           

 

 

New home prices in the Calgary region continue to rise.

CALGARY - The Calgary region experienced the highest annual growth rate in new home prices across the country in January, says Statistics Canada.
The federal agency said Thursday that the New Housing Price Index rose by seven per cent from January 2013 in the Calgary census metropolitan area - its highest annual rise since July 2007.
The NHPI was also up 1.3 per cent on a monthly basis.
Nationally, the NHPI rose 0.3 per cent in January - the largest since May 2012 and mainly the result of strong gains in the Prairie region, said Statistics Canada. On an annual basis, it was up 1.5 per cent.
“The metropolitan region of Calgary was the top contributor to the January rise, with prices up 1.3 per cent over December. Builders reported that higher material and labour costs as well as market conditions were the primary reasons for the increase, the largest in the region since April 2007,” it said.

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Calgary Home Buyers Return to Housing Market Bidding Wars

 

BMO report says Canadians willing to pay more to get what they want

By Mario Toneguzzi, Calgary Herald March 5, 2014 6:40 AM

                        

CALGARY - Prospective Canadian homebuyers are more willing to enter into a bidding war this year for properties they want to purchase, says a new report released Wednesday by BMO.
And Calgary’s hot housing market is proving to be a good example of that as nearly 20 per cent of MLS residential sales in the city in February were for above list price.
The BMO Home Buying Report said 34 per cent of Canadians are willing to enter a bidding war when it’s time to buy a home, an increase of six points, or 21 per cent, from a year ago.
The report, conducted by Pollara, said that in major city centres, the appetite for competitive bids is the highest in Toronto and Vancouver (44 per cent and 41 per cent respectively). In Calgary, it is 38 per cent and in Alberta, it is 30 per cent.
“While many suspect bidding wars are triggered by sellers who deliberately price their homes below market, the report shows that just 15 per cent of owners have that motivation, with those on the Prairies and in Toronto the most likely to pursue this strategy - but even then the numbers are modest at 24 per cent and 22 per cent respectively,” said BMO, which says average home prices across Canada continue to rise, gaining momentum in the past year, with the average transaction price up nearly 10 per cent year-over-year in January. The average home sale price in Canada is currently just over $400,000.
“Calgary’s market continues to see the strongest fundamentals; Vancouver has rebounded from a soft patch; while Toronto’s market remains relatively balanced overall, though the condo market is more amply supplied,” said Robert Kavcic, senior economist with BMO Capital Markets, in a statement. “Overall, sales are expected to hold relatively steady in the year ahead, with price growth in the low single-digit range, below the rate of income growth.”
Laura Parsons, mortgage expert with BMO Bank of Montreal, said the competition for real estate in Canada, particularly in hotter markets, can be fierce.
“However, it’s important that buyers avoid getting caught up in the moment and respect the budget parameters they’ve established,” she said in a news release. “For those willing to negotiate on the price of a home, the most important part of preparing is ensuring they get pre-approved by their bank so they know exactly what their limits are and can stick within them.”
Data released Monday by the Calgary Real Estate Board indicates all-time records, for any month, were set in February in the average city sale price ($482,530) and the median city price ($424,900) as well as in the single-family sale price ($550,312) and the single-family median price ($480,000).
Mike Fotiou, associate broker with First Place Realty, said Calgarians were so determined to buy a home in February that nearly one in five paid above the asking price.
“Of the 1,854 properties that sold during the month, 364 or 19.6 per cent of buyers paid higher than list price. Compare that to the 10.4 per cent of buyers from a year ago or the 6.1 per cent from February 2012 that paid above asking,” Fotiou wrote on his blog.
“As sales rise and inventory continues to decrease year-over-year, it’s to be expected that buyers will find themselves in more situations where multiple offers are involved.”

mtoneguzzi@calgaryherald.com
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