Housing recovery remains a work-in-progress

Market sees modest inventory gains, but overall prices inch up

Sales exhibited stable growth through the first half of the year in the Calgary housing market, but the number of transactions slowed slightly in July compared to last year.

City-wide sales totaled 1,637 units, six per cent below July 2016 levels. Year-to-date sales activity totaled 11,957 units, nine per cent above last year.

“Sales growth exceeded expectations so far this year. Clients were re-entering the market after delaying decisions until there were some signs of economic improvement,” said CREB®president David P. Brown.

“However, this recovery will require patience. There continues to be many new and resale ownership options available. This reduces the sense of the urgency for many consumers.”

Easing sales were met with higher new listings, causing further gains in inventory levels. City-wide months of supply rose to four months, as inventory levels reached 6,675 units this month. This is 17 per cent higher than last year, but still below July highs recorded in 2008.

“Modest improvements in the labour market and net migration were necessary to support the turnaround in the housing market,” said CREB® chief economist Ann-Marie Lurie.

“However, current inventory levels and changes in the lending market continue to weigh on housing demand.  Easing demand growth combined with elevated levels of supply will slow the pace of price recovery in our market.”

Driven by detached and attached housing sales, city-wide prices in July improved over the previous month and the previous year. However, it is nearly four per cent below previous monthly highs. Year-to-date benchmark averages remain 0.44 per cent below last year’s levels.

Despite the current month activity, the detached sector continues to demonstrate conditions that are more balanced compared to last year.

Apartment condominium product continues to face oversupply in the resale and new home sector, causing further price declines. In July, the apartment benchmark price was $266,200. This is a three per cent decline over last year and nearly 12 per cent below peak prices.

For a full analysis of the Calgary housing market in 2017, please refer to CREB®‘s 2017 mid-year update to be released in mid-August.

Housing market retains momentum in April

City-wide prices hold steady as labour market improves

Calgary’s housing market continued to show signs of stability in April. With improvements in the labour market and a balanced detached sector, city-wide benchmark prices reached $439,600 in April, similar to the previous month, but 0.90 per cent below last year’s levels.

“More jobs means less uncertainty for people who are sitting on the fence,” said CREB® president David P. Brown. “There also tends to be fewer people who need to sell when employment improves, and that can prevent inventory gains and further price reductions in the market. It’s a good scenario for sellers who are entering a spring market that’s in better shape than anything we’ve seen in recent years.”

While adjustments are still occurring in the apartment condominium sector, the detached segment of the market is improving across all price segments.

“Detached product has not faced the same supply pressure as the apartment sector,” said CREB® chief economist Ann-Marie Lurie. “Detached supply from new construction didn’t surpass previous highs. That helped prevent steeper price adjustments in the detached sector when demand eased.”

The relationship between sales and inventory will be a key driver for pricing in the months ahead. Total transactions improved to 1,917 units in April, while inventories totaled 5,495 units, pushing months of supply below three for the second consecutive month.

With sales up and overall market inventory down, months of supply has already pulled back from elevated levels recorded over the past two years. While activity continues to vary by location and product type, more balanced conditions will help to support overall price stability.

“Improvements in the employment situation were necessary to prevent further declines in the housing sector,” said Lurie. “However, economic recovery is still expected to be slow, impacting the pace and quality of job growth. Based on current expectations this should translate into a more prolonged period of recovery in the housing market.”

Give me a shout  if you want to know the specifics about your property or neighbourhood!

JUST LISTED : 1313 Lake Fraser Court SE

This one bedroom bungalow style condo is sure to impress! Step in and be greeted with the abundance of natural light and a gorgeous fireplace. The open floor plan living and dining room is spacious and bright. You can easily see all the upgrades in your new home!

The kitchen features warm honey brown shaker-style maple cabinets and plenty of smart storage space. The upgraded granite is almost a piece of artwork with it’s natural beauty and durability. All the appliances are included, even a new garburator.

The master bedroom is a very large space with room for dressers, an armchair and even more. All that space and a dramatic, full-mirrored walk-through closet that brings a touch of elegance and luxury to the master retreat. Your private 4-piece bathroom has a linen closet and lots of additional storage.

Both bathrooms feature contemporary design optimized for style and functionality, and a full stacking washer-dryer set is tucked neatly into powder room.

There is a good sized covered balcony that overlooks a quiet green space and is very private for your barbecuing and summer enjoyment. Also included is a titled parking spot and an assigned separate storage unit.

The entire condo was recently painted a neutral, colour palette which means that it is move-in-ready yet adding personality is easy and fun. Lots of upgrades were added when this condo was purchased and the original owner has maintained this unit with pride.

Bonavista Estates is well known for it’s wide range of amenities, including a theatre room, party room, exercise room, dining space for large functions and even a car wash bay.

Well managed, convenient location and all the comforts come standard at the highly sought-after Bonavista Estates; get all that and more in this unique, attractive, move-in-ready condo.

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For more information click here!

January market improves over last year!

For the fourth consecutive month, housing inventory levels have recorded year-over-year declines. At 4,112 total units, January’s inventory was 18 per cent below last year’s levels.

“While housing conditions continue to favour buyers, a slow transition toward more balanced conditions is helping to ease downward pressure on home prices,” said CREB® chief economist Ann-Marie Lurie. “Conditions have improved over last year, but people need to remember that last year’s market was one of the weakest on record. Despite the appearance of a major shift in activity, the transition in the housing market is going to be a slow process.”

January sales totaled 947 units, 24 per cent above last year, but 21 per cent below 10-year averages for the month. Sales activity improved across all product types, but only when compared to the near record lows that occurred in January 2016.

The detached segment of the market is demonstrating the most improvement. Sales activity totalled 584 units in January, a considerable improvement over the 466 sales recorded last year. Inventories have also declined pushing the months of supply to 3.2 months well below the 5.4 months recorded in January 2016.

“This past month showed how the market never stands still,” said CREB® president David P. Brown. “The market isn’t expected to be as unpredictable in 2017, but it’s early in the year and there are still lots of unknowns that will shape decision-making for consumers.”

“Every transaction is a personal decision and anyone going through the process of buying and selling real estate will be trying to make the best decision for their family. They need to consider their long-term objectives and think about the price they are willing to accept or pay for a home.”

City-wide benchmark prices totaled $437,400, 0.16 per cent lower than last month and 2.82 per cent lower than last year’s levels. Since recent highs in 2014, residential prices have declined from a low of 4.9 per cent in the detached sector to highs of 11.5 per cent in the apartment condominium market.

Feel free to give me a call to get the full City of Calgary monthly stats package.

JUST LISTED : 171 Elgin Terrace SE

This Cardel “Ellsworth Towne” family home mixes classic comforts and sensible design with appealing modern twists. As natural light streams through generous windows on the main floor, your 9” ceilings will seem even higher.

A sun-lit dining nook adds interest and appeal to the otherwise open plan dining area, and the attractive tiled floor adds style and function to your main living space. A corner gas fire place and kitchen island with 2-person breakfast bar top off the room with cozy charm.

A separate front den/office, a 2pc bathroom and conveniently placed laundry room complete this level.

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For more details click here!

JUST LISTED : 306, 3650 Marda Link SW

Modern, luxurious living begins and ends in fashionable Marda Loop. Tired of cookie-cutter layouts and unimaginative design? This extraordinary penthouse suite of the coveted Courtyards at Garrison Woods speaks to a new class of contemporary Calgarians. Incredible double-height ceilings and a sunlit, open plan impress straight through the door, while a corner gas fireplace and oversized garden-facing windows make entertaining an effortless thrill. The peninsula kitchen features upgraded appliances, a tiled backsplash, a sizable pantry and slate flooring. Under the stairs is a built-in office nook, and around the corner a convenient powder/laundry room and a spacious balcony.

Last but certainly not least, atop the elegant staircase is the inspiring master retreat — a private loft that stretches the entirety of the suite and features an interior balconied view of the living-space below, and the courtyard beyond. A roomy mirrored closet and 4-piece, modern master-bath polish off this compelling upper floor.

This is a secure, upscale 18+ building with exceptional recreational features including a lap pool and change rooms with shower facilities. The exercise area includes stationary equipment. There is also a clubhouse with a fireplace, kitchen facilities and furnishings. Guest suites are available. Also note there is an assigned, secure underground parking stall, storage locker, air conditioning and integrated sprinkler system. Two blocks from everything you need from, restaurants, groceries and coffee shops to Village Ice Cream. Just a quick trip to Mount Royal University, Glenmore Athletic Park or Downtown.

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It’s a New Dawn, It’s a New Day, It’s a New Home??

If you are one of the excited few thinking about taking the leap into the house of your dreams this year, congratulations! Choosing and customizing your home should be among the most thrilling, fulfilling experiences out there. And, just in case you were wondering when this was going to start being about me, well here it is: when buying a new home, it’s a pretty excellent idea to have professional REALTOR® representation. Oh wait, I’m a REALTOR®! What a coincidence!

Let’s talk about show suites for a minute. If you’ve got your eyes on a new build, and feel like browsing around a show suite… HOLD IT! Did you know, that if you don’t have REALTOR® representation the first time you set foot on that site, you may not be allowed to include me as part of the process after that? Basically, if I don’t “introduce” you to the builder, you may lose the right to future REALTOR® representation completely. Yikes is right.

Now, if you’re working with a builder sales rep on a new construction, don’t get me wrong; they will give you quality information regarding development specifications, financing options, upgrades and sales. However, while REALTORS® are contractually obligated to represent the buyer (you), on site sales reps are hired by, and contractually obligated to represent the seller (not you). Think of it as showing up to court without a lawyer, and then asking your opponent’s lawyer for legal advice.…Ok, maybe it’s not that serious. But you know what I mean!

So, as shiny, manicured and tempting as they are, remember to give me a shout before succumbing to the enticing lure of the show home! Plus, then we can grab milkshakes afterwards and chat about it.

– Monique

Detached Prices Stabilize in Soft Market

The segment of Calgary’s housing market with the greatest influence on the overall market is showing signs of pricing stability. The detached benchmark price totaled $503,400 in September, which is 3.3 per cent below last year, but the second consecutive month at this price level.

While overall economic conditions remain soft, for now the detached sector is demonstrating some steadiness in terms of pricing.

“The decline in demand has caused many to anticipate steeper price declines for detached homes,” said CREB® chief economist Ann-Marie Lurie. “That hasn’t happened in large part because detached supply levels haven’t climbed as sharply as many expected. There was a limited amount of supply in the overall market when this cycle began, and while levels did rise and remain somewhat elevated, they were well below previous highs.”

The level of detached new listings also eased compared to last year, helping push down year-over-year inventory levels for the second consecutive month.

“Consumers are really starting to come to terms with the current environment,” said CREB® president Cliff Stevenson. “Most sellers have adjusted their expectations at the same time that many buyers are realizing the price of a home is influenced by factors like location, supply in specific price ranges and condition of the property.”

Residential inventory levels totaled 5,877 in September, five per cent higher than last year, due to gains in both the apartment and attached sectors. City-wide months of supply neared four months, but ranged from a low of three months in the detached sector to a high of eight months in the apartment sector.

Sales were equally inconsistent, improving by four percent in the detached market while declining by 23 percent in the apartment sector. Nonetheless, in every category, sales activity year-to-date sales activity has declined over levels recorded last year and remains below long-term averages.

The resale apartment market has recorded large inventory gains and a sharp pull-back in sales. This, combined with additional competition from new builds, is resulting in steeper price adjustments in this sector.

Condominium apartment prices totaled $274,700 in September, 0.1 per cent below last month and 6.8 per cent below last years’ price.

The Next Step

Move-up homes driving construction activity, community development, say local housing officials

The head of Calgary’s new home industry believes move-up products have become the go-to sector within Calgary’s residential construction industry, and will be the backbone of new communities moving forward.

Allan Klassen, who is the newly minted chair of the Canadian Home Builders’ Association – Urban Development Institute Calgary Region, said buyers’ focus over the last several years has been increasingly focused on detached product priced over $500,000.

“It is the prominent driver in terms of overall growth of new construction,” said Klassen, who is also senior vice-president of Calgary housing for Brookfield Residential, which is behind the mixed-use Seton development in the southeast and the recently announced Livingston community in the city’s north.

He noted move-up homes provide the foundation behind many of Calgary’s newer communities, such as Auburn Bay, Cranston and expansions in Tuscany.

Klassen describes the typical move-up home buyer as young. He estimates nearly half of these buyers are between 25 and 34, while their average household income is around $125,000.

“WHEN A FAMILY IS GROWING, PARENTS ARE LOOKING FOR SCHOOLS, PARKS, KIDS PLAYING ON THE STREET. THEY’RE LOOKING FOR A SENSE OF BELONGING.”

Their reasons for moving up vary, but are primarily driven by lifestyle changes, such as a growing family. As such, the adage that real estate is about “location, location, location” still holds true when considering move-up buyers.

“When a family is growing, parents are looking for schools, parks, kids playing on the street. They’re looking for a sense of belonging,” said Klassen, adding that, once those locational needs are met, features such as increased square footage, more bedrooms and storage space come into play.

Stephanie Myers, who is Jayman BUILT’s vice-president of single-family housing operations in Calgary, estimates 55 per cent of the company’s sales year-to-date fall into the move-up category.

“This is a higher rate than we would see in a typical year,” she said, noting the price band for move-up homes has widened. She added move-up homes used to be $500,000 and up; now, however, they’re available for around $450,000.

Stephanie Myers, Jayman BUILT
Stephanie Myers, Jayman BUILT

“Given the incredible price points in the current market, and with interest rates running as low as they are, we have seen a number of buyers skipping the traditional starter homes and jumping right into the move-up segment,” said Myers. “The first-time buyer is more prominent in this group than ever before.”

Klassen agrees, saying Brookfield currently sees more than half of its move-up buyers coming directly out of rentals.

According to both Klassen and Myers, move-up buyers will typically settle into their homes for five to seven years before looking to move up again – often within the $600,000-$800,000 price range.

Don Barrineau, Mattamy Homes’ division president in Calgary, said his company is seeing similar demand within the move-up sector. Mattamy has currently released new floor plans within its master-planned communities in Calgary and Airdrie that offer larger square footage (up to 3,400 square feet) and larger lots (up to 43 square feet).

“We want to have a large variety of consumer segments and product types in our communities,” said Barrineau, noting that offering move-up homes allows buyers to go through the majority of their life cycle in one community, should they so choose.

Barrineau encourages move-up buyers do their homework and market research to determine, “what changes will happen within a person’s life that will instigate a move to a different product type, and what will they be looking for in that different product type.”

In Cityscape in northeast Calgary, for example, Barrineau said move-up buyers are seeking more bedrooms and an option to include a spice kitchen.

 

CREBNow By: Kathleen Renne

Demand Down with Net Migration

Prices similar to last month, down more than four per cent from last year.

In step with City census data on declining net migration levels, housing sales activity totaled 1,741 units in July, a 12.6 per cent decrease over last year and the 20th consecutive month of year-over-year sales declines.

“Continued pullback of sales activity is a sign of economic conditions,” said CREB® chief economist Ann-Marie Lurie. “The number of unemployed workers keeps rising and when you combine job losses with declining net migration, the result is going to be weaker housing demand.”

Slower sales were accompanied by declining new listings in July. This helped prevent further inventory gains and minimize the downward pressure on benchmark prices. By months end, the residential benchmark price was $440,000, similar to last month, but 4.2 per cent below July figures from the previous year.

While detached prices seem to be leveling, this is not the case for all property types. With over six months of inventory in the apartment sector, oversupply continues to create steep price declines.

The apartment benchmark price totaled $277,000 in July, a 0.4 per cent decline over the previous month and 6.6 per cent below last year’s levels.

City-wide benchmark prices for detached product totaled $502,300 in July, which is similar to last month, but 3.4 per cent lower than last year’s levels. Meanwhile, semi and row attached product recorded a year-over-year decline of 3.1 and 5.5 per cent for July prices of $385,200 and $310,300.

“To buyers and sellers that have been paying attention to the housing market in Calgary and surrounding areas, it should come as no surprise that we continue to see a slowdown in sales activity,” said CREB® president Cliff Stevenson. “Buyers are expecting further declines in sold prices, and sellers are adjusting to softer demand with price decreases. When these expectations intersect, we’re seeing sales activity in the market, but not at the level realized over the last several years.”