OCTOBER MARKET COMMENT

Sat, 07 Oct by calgaryquicksearch

Calgarians Reel at the blow of Energy East:

The shelving of The Energy East Pipeline project is leaving many Calgarians feeling like they don’t have much to be thankful for this Thanksgiving weekend. The fur is flying laying blame in all political corners as excuses are mixed with bare-faced lies. Was it the National Energy Board’s changing the rules during the application process, the low price of oil or the fact that two other pipelines have been approved that will compete with Energy East? Whatever the reason it was not a good day for Calgariarns.

The two approved pipelines are Kinder Morgan’s Trans Mountain expansion at $6.8 billion plus the Line 3 replacement project. Between these two projects we will see an increase in pipeline capacity of about one million barrels per day. I think that is something to be excited about! I found this interesting: I looked up the Kinder Morgan and Line 3 projects on the Internet and found an article in a Global news article from November 29, 2016. At the bottom of the page there is a link to a video article titled: “Tran Canada’s Energy East: Not enough oil for that pipeline, analysts say.

Here’s the link:

Calgary, Alberta oilpatch applaud Trudeau pipeline approvals

Yet amid the calamity we have a stable and resilient real estate market. Detached home continue to outperform condominiums although the summer and early fall market’s pace has slowed. The most accurate market momentum indicator is the “Absorption Rate” or “Months of Supply”. At two months of supply a market is considered balanced. The detached market has slipped to having about 3.8 months of inventory on the market which favours buyers. This is because it indicates that there is more product for them to choose from and relatively fewer buyers for the homes that are listed for sale. While it would be nice for markets to always be going up the fact is that the detached homes have seen a respectable run so far this year and this seasonal entrancement is normal and expected.

Most often when we talk about Calgary real estate we mention the contrast between the detached market and that of apartment condominiums. While I don’t want to leave people feeling left out the reason is because all other residential properties fall somewhere in the spectrum between these property types. Attached single family homes, row housing, town homes, bare land condominiums and others all fall somewhere between the detached and apartment condominium markets.

The Calgary Real Estate Board has reported that in September we had a small decrease in detached home sales (-2.5%) and this was further outpaced by an over balance of new listings that came on the market (12.9%). Interestingly this was not the case for apartments: Apartment sales increased year over year (5.0%) and the number new listing decreased (1.26%). Now that’s a switch, condominium momentum improving and the detached market declining!! We haven’t seen that for awhile.

 

The Market in a Nutshell:

Keep in mind that these are average numbers for the entire city and the values of specific properties will vary greatly. If you would like to know the numbers for other market segments and/or for your market area you are welcome to email or call me and I will calculate and send those numbers out to you.

Detached Calgary Home Sales September 2017

Detached Calgary Home Sales September 2017

 

Calgary Apartment Sales September 2017

Calgary Apartment Sales September 2017

 

Remember these are rough average numbers and each community and property within that neighborhood is unique. You are always welcome to call to discuss your home and specific market area. . I’m always here if I can help with real estate advice.

Thanks for tuning in again! I wish you have every blessing over this coming Thanksgiving w

eekend.

Always at your service,

 

 

Rob Johnstone

Calgary Home Pros – Re/Max Mountain View
Cell: 403-809-6026

SEPTEMBER MARKET COMMENT 2017

Thu, 07 Sep by calgaryquicksearch

Calgary Market Shows Weakness.

The Calgary real estate market is sandwiched between a Vancouver real estate market that continues it’s meteoric surge and the Toronto market that is catching it’s breath due to the implemented foreign buyer’s tax. As we Calgarians are painfully aware that we haven’t been invited to the party. Our market continues to languish and sputter as it tries to get a little traction.

The Calgary Real Estate Board has reported that in August we had a small increase in sales but it was outpaced by an over balance of new listing that came on the market. Of those increasing listing inventories of Calgary homes for sale over half of them were condominium apartments and attached properties. Overall the single family detached market remains relatively stable and even strong in many communities.

The CREB chief economist Ann-Marie Lurie says that while unemployment is easing it remains high. She reports that most of the new jobs are coming from outside the energy sector and that we will need to see a wider employment base with broader economic improvement before we see substantial improvement in our Calgary real estate market.

As I mentioned there is a vast discrepancy between the detached and apartment condominium markets within our city. While that is true the diversity within the detached market is also significant. For example the highest benchmark prices are found along the west side south of the river and along Sarcee Trail at $738,900. In contrast the east zone benchmark average is about half at $356,700.

 

While the healthiest segment, the Calgary detached market lost a little ground over the summer. Yet while the average Benchmark price lost a little ground compared to July it remains about 1.5% above the average of last August. As you can see from the green bar on the chart sales activity took a breather over the summer and the number of Calgary homes for sale slightly increased. Really this little slip in momentum is typical for July and August. I expect that as we saw last year the detached market will plateau or increase a bit though the fall and then take a holiday dip as people are distracted with other things for November, December and January.

Keep in mind that while the graph to the right looks like home prices are almost soaring they really are not. If you look close at the difference in the price between now and last December and January it is only about 3%.

 

 

As you can see our apartment condominium market continues to suffer with high inventories and anemic sales.  While town homes are fairing much better than apartments the average benchmark price is about 3% below last year while apartments are down 4%. Keep in mind that the Calgary Real Estate Board has made it’s reporting of town home sales ambiguous by breaking out attached, semi-detached and row housing in their statistics but lumping in freehold and condominium properties into these categories.  I believe that they made these changes to come in line with national practice so that our statistics format matches that of other real estate boards. So, in my opinion, now our statistics along with all of the statistics across the country are messed up equally.

 

Note that to add to the confusion CREB now includes condominium detached properties in the detached category but since there are far fewer detached condominiums in the market the detached section is predominantly single family homes.

 

The market in a nutshell:

Keep in mind that these are average numbers for the entire city and the values of specific properties will vary greatly. If you would like to know the numbers for other market segments and/or for your market area you are welcome to email or call me and I will calculate and send those numbers out to you.

 

 

 

Thanks for tuning in again! I hope that your summer was terrific. I’m always here if I can help with real estate advice.

Always at your service,

Rob Johnstone

Calgary Home Pros – Re/Max Mountain View
Cell: 403-809-6026

 

 

 

 

 

AUGUST MARKET COMMENT 2017

Mon, 07 Aug by calgaryquicksearch

Calgary Real Estate Recovery At A Snail’s Pace.

A dash of employment growth with a sprinkle of optimism has our real estate market in SLOW recovery mode. The total market results show that this July compared to July 2016, the Benchmark price is up about 1.6% but the year to date numbers show that the Benchmark is down .44%. This, as well as the sales and listing number show that in 2017 the first four or five mothers have been a bit better than last year but comparatively the momentum has fallen off in July over the summer.

With oil hovering and holding its price in the $50/bb range, the energy industry has began to stabilize. Unemployment seems to have bottomed and is taking a turn for the better. Also migration into the city is picking up. The turn towards optimism is in the face of a tightening lending environment and political pressures from British Columbia fosters doubt about whether pipeline expansion will become a reality. In addition, Volvo recently announced that they will only be producing only electric vehicles after 2019 and France and Britain announced out-right bans on fossil fuel powered cars by 2040. This type of anti-oil news has some beginning to wonder why we are building pipelines at all.

In any event, while it looks like it will be quite awhile before the next Alberta oil boom, our real estate market is looking healthier (at least some segments of it). Single family prices are fairing quite well. The detached benchmark price has risen to $512,100 which is slightly above last month and a full 2% or about $10,000 above last year. Yet it still remains 2% below the highs reported by the Calgary Real Estate Board.

 

 

 

 

Apartment condominiums are a different story. Over supply and weak sales continue to plague this market sector which continues to struggle remaining almost 13% below market highs. Also while the detached market has seen a 2% increase in the last year, apartment condominiums are 3% below last year’s prices.

 

 

 

The market in a nutshell:

In our market nutshell section, we look at the two extremes of our market; the single family and apartment markets. The other market segments fall between these market indicators of these two extremes. Also overall average metropolitain number vary greatly between specific communities. If you would like to know the numbers for other market segments and/or for your market area you are welcome to email or call me and I will calculate and send those numbers out to you.

 

 

 

 

 

 

 

 

 

 

Thanks for tuning in again! I hope that your summer is wonderful. Let me know if there is anything that I can help with. I’m always here if I can help with real estate advice.

Always at your service,
Rob Johnstone

RJ Alliance – Re/Max Mountain View
Cell: 403-809-6026

July Market Comment 2017

Mon, 17 Jul by calgaryquicksearch

C.R.E.B. says that “June spells a gradual recovery”.

It seems that the best way to describe our market is that it is plateauing and looking for direction in oil prices. Analyists are offering mixed reviews on the immediate future of our economy and therefore our local housing market.

Economic dynamics are in conflict; the Northern Gateway & XL pipeline are pending approvals and the oil price stabilization is helping our real estate market while Trump’s NAFTA attacks are dragging it down. The recent vote in BC and subsequent turn over of leadership is leading to more uncertainty for Calgarians since it put Alberta’s pipeline access to tide water further in question.  In the middle, the detached Market pressures are being felt in Alberta due to national programs that are aimed at the Toronto & Vancouver over-heated markets. CMHC’s new “stress tests” for people applying for financing went into effect this last October 17. This has eroded about 20% of the purchasing power of high ratio applicants. Initial indications were that the repercussions from this policy would be dramatic but it has not appeared to have impacted the market significantly. CMHC also implemented a hefty premium increase that takes even more money out of buyer’s pockets. And of course, our provincial and federal political leadership seems to be against business and promotion of Alberta’s economic well being.

 

Then there’s the other side of the coin: Some oil service firms have started to hire as well. I’m hearing of a few (not a-lot of) engineers, geologists and geophysicists starting to find work in their fields. One of my clients is a Human Resources Consultant for a few major local companies. He is doing staffing studies for a few major companies that I cannot mention the names of. He says that by 2020, Alberta should be at about 80% of the 2014 employment levels. I said “well that sounds depressing.” His response was interesting. He said that 2014 was relatively strong for employment and that the prediction for 80% by 2020 was an indication of slow and steady growth for the next few years. Those words “slow and steady” are always music to my ears because that is the healthiest and most sustainable growth for our economy and for our real estate market. He says that he anticipates that we will see housing prices increase along with the pace of inflation or about 1.5 to 2.5% per year.

 

The market in a nutshell:

In our market nutshell section, we look at the two extremes of our market: the single family market and apartment market. The other market segments fall between these market indicators of these two extremes. If you would like to know the number for other segments please email me and I will calculate and send that out to you.

 

An explanation of the market indicators follows the review. Keep in mind that these are broad statistics for all of Calgary and that your local community and market niche will likely be different.

 

 

 

That’s it for the July market update. Try to stay cool in our little heat wave. I look forward to connecting with you next time.

If you are buying or selling and would like more market detail, it would be our pleasure to assist you in any way we are able.

Please call us at (403)-809-6026

Always at your service,

Rob Johnstone

 

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Calgary Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.