In the News: New real estate boss takes out crystal ball

Ed Jensen predicts a year of balance

It was described as a Jekyll and Hyde year in 2007 for the local residential real estate market.

When the year was over, the average MLS sale price of a single-family home in Calgary rose by $72,000 in 2007 compared with the previous year, while the average price of a condominium jumped by nearly $53,000.

According to the Calgary Real Estate Board, single-family homes in the city sold for an average $472,230 this past year, up 17.94 per cent from $400,398 in 2006. The average sale price of a condo was $316,370, an increase of 19.98 per cent from $263,684 in 2006.

Single-family sales in 2007 were 18,438, down 3.53 per cent from the 19,113 recorded in 2006, while condo sales dropped by 1.9 per cent to 8,236 units compared with 8,396 sales the previous year.

It's in this market that 51-year-old Ed Jensen takes the reins as president of the real estate board this year from outgoing president Ron Stanners.

Jensen has been in the industry since 1979 and is operating principal and CEO of Keller Williams Realty South.

This morning, he gives the city the real estate board's outlook for the market in 2008 at the Calgary Real Estate Board Forecast 2008 Conference and Trade Show at Stampede Park.

He was interviewed recently by the Herald.

Q: How would you describe the real estate market in 2007?

A: The real estate market at the beginning of 2007 was a continuation of 2006. It came in like a lion or a firestorm. (For) 2006, it came in fast and hot and so did 2007. . . . Huge demand for product from the buying sense and homes couldn't keep on track. There weren't enough homes in the inventory to meet that demand; consequently, that drives prices.

Q: Were you surprised by what happened last year?

A: 2007 turned out to be a great year statistically. I was not surprised that it had to change because I don't think any economy or any industry in an economy could keep up the pace which we were running. We saw price increases of $10,000 to $15,000 a month on properties and that's just not sustainable. I don't think it was any surprise to anybody that somewhere in there we had to turn."

Q: What is going to happen this year?

A: That's the crystal ball. Employment is great, net migration is going to be down . . . but it still shows a great number which supports demand, interest rates (are good as is) the general economy of Alberta and the energy sector, inventory (of homes) is coming back down from a high standard. . . .

Using the basic principles of supply and demand, we're moving towards a balanced marketplace . . . 2008 is going to be a great year of opportunity for both sellers and buyers.

Q: What is the biggest challenge for the industry?

A: Educating the sellers that they're in a different marketplace. That's our issue right now and certainly I think we'll continue with that.

Q: What do you see as your role as president of the organization?

A: I see the president's role as leading a team of very experienced real estate practitioners in policy-making, governance, strategic thinking for our industry.

Where are we going with the business? . . . Figure out what type of services we can offer our members so they can offer better services to the public in facilitating what they want and that's to buy and sell houses.

Q: Will 2008 be a buyer's or seller's market?

A: It's going to be a great market for sellers and buyers. In my opinion, a balanced market is a good market for both the sellers and the buyers

When we have a seller's market, they're happy, but the buyers are not happy because prices are going crazy. That's not good for the economy. That's not good for anybody in general because those sellers become buyers.

The buyers aren't happy because they can't find the product. It's not an issue of price. It's an issue of product.

Q: What is your advice to buyers in this market?

A: Buy as soon as possible. Buy now.

. . . From the buying perspective, there's no question in my mind that 2008 is going to be an excellent year and I believe that the prices will increase. So buy now while there's selection.

Q: What is your advice to sellers in this market?

A: Sell now. The reason for that is because we've got product.

If you're selling and you're moving for a reason, there's product . . .

It's a good solid economy. We've got good employment. All the economic indicators are good for this time window.

You're selling for a reason and whatever that reason is, then you need to buy. Right now, there's selection, which gives you the opportunity to find the real dream home. What's the next step? That's what everybody wants. So that's why you should sell now. It shouldn't be just on the money side.

There's great values in the home, the economy is good, you're selling now because there's a reason to sell.

Q: Is housing still affordable for Calgarians?

A: I believe it is. We're a city of a million people. Our prices are not going to be indicative of a country town, a village, of 100 homes. And we're a prosperous community which attracts business from all over the world. So prices are relative to that type of city environment.

Q: What has been the biggest change in the real estate industry over the span of your career?

A: We went from blackboards to computers. . . .

Is it better for consumers? Absolutely. Now with the technologies, we can bring more information to our clients to help them make an informed decision and that's our job. Our job is to fill the wish list of our clients in respect to the type of home they want with the amenities they want. The tools allow us to do that.

Where are we going? We're moving down the track toward bigger and better technology. We're on the cusp on going more electronic.