Signs of continuing softening in Calgary housing market

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By MARIO TONEGUZZI, Calgary Herald July 30, 2010

CALGARY – Preliminary unofficial MLS data shows Calgary’s housing market continued to soften in July with sales plunging from year-ago levels and the average sale price falling from the previous month.

According to the figures, so far this month until Thursday there have been 843 single-family homes sales in the city compared with 1,585 sales for the entire month of July 2009.

In June of this year, there were 1,061 sales.

The month-to-date average sale price so far in July is $464,899, down from June’s $481,964 but up from a year ago at $436,782.

Average single-family home prices peaked in July 2007 at $505,920.

Calgary’s condominium market is telling a similar story.

So far this month there have been 368 sales compared with July 2009 when there were 702 sales for the entire month. June of this year had 445 sales.

The July month-to-date average MLS sale price for condos is $289,921, up from $285,032 last year but down from June’s $292,238.

The average MLS sale price for condos peaked in June 2007 at $323,269.

MTONEGUZZI@THEHERALD.CANWEST.COM

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Calgary house prices below pre-recession levels

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By Mario Toneguzzi, Calgary Herald July 28, 2010

Calgary is the only major Canadian market with house prices remaining below their pre-recession peak, according to a national survey of six centres across the country.

And the city also had one of the lowest year-over-year house price gains in Canada in May, said the Teranet-National Bank House Price Index, which was released Wednesday.

Overall, the index stood 4.2 per cent above its pre-recession peak and five of the six markets surveyed showed prices have passed beyond their respective pre-recession peak in a three per cent to five per cent range.

“On the flip side, while on a steady uptrend over the last 10 months, the Calgary HPI remained 8.6 per cent below its August 2007 peak,” said Pascal Gauthier, senior economist with TD Bank Financial Group, in a research note.

However, the report said house prices in Calgary rose by 7.8 per cent in May from May 2009.

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 of the index.

Year-over-year, the composite index rose 13.6 per cent nationally, with increases of 17.1 per cent in Vancouver, 16 per cent in Toronto, 11.4 per cent in Ottawa, 8.5 per cent in Montreal and 5.6 per cent in Halifax.

On a monthly basis, prices increased in each of the six regions covered and by 1.3 per cent overall, the 13th consecutive monthly rise.

Prices gained 2.3 per cent in Ottawa, 1.8 per cent in Montreal, 1.2 per cent in Vancouver and Calgary, 1.1 per cent in Toronto and 0.7 per cent in Halifax.

“Home prices are now 4.2 per cent above their pre-recession peak (nationally), a situation that contrasts sharply with the one prevailing in the U.S. where prices are down ­almost 30 per cent from their peak,” Marc Pinsonneault of National Bank Financial Group said in a research note.

He said the acceleration in the index will not be sustained.

“The number of existing homes sold has declined in each of the three months ending last June, and it did so to a much larger extent than the number of new listings,” said ­Pinsonneault.

The house price index report said market conditions have been “loosening” across Canada as the number of existing homes sold have declined much faster than the number of new listings but “it is too early to conclude that the relatively vigorous price rises of April and May mark the beginning of a trend.”

mtoneguzzi@theherald.canwest.com

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High inventory makes for buyers’ market

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By Marty Hope, Calgary Herald July 10, 2010

Seasonal slow down adds to catalogue of available homes

There’s so much going on in Calgary’s resale housing market it’s difficult to decide what to start with.

So, let’s start with what we know, based on the June activity report sent out by the Calgary Real Estate Board.

Based on year-ago numbers, sales were down, the average price was up, and the catalogue of available homes was made thicker.

It’s a buyers’ market, plain and simple, says board president Diane Scott.

Problem is, the buyers aren’t buying the way they were earlier this year — and the number of homes in inventory continues to build as a result.

The summer doldrums have come early, by about a month, she says. Typically, the seasonal slowdown doesn’t start until about the time we’ve hauled on our cowboy boots, suitably crushed the straw hat, and put the belt on our wrinkled, faded jeans.

“We have been experiencing a good early market through the first quarter,” says Scott. “That seems to have taken our typical second-quarter away.”

Activity within the Calgary city limits, for the record:

– Sales of single-detached homes in June tallied 1,061, down more than 42 per cent from a year ago. Condo sale totals weren’t quite as bad, down 39 per cent year over year.

– The average selling price for a detached home last month was $481,964 or nearly eight per cent higher than in 2009. On the condo side the price was up slightly more than two per cent.

– As for listings, the 2,733 single-family homes added in June moved the total almost 22 per cent higher than last year, while condos were up 17 per cent.

That put the June month-end inventory of detached homes at 5,991 compared to 3,395 last year. On the condo side, the inventory hit 2,626 compared with 1,744 in 2009.

Gary MacLean, who sells for Re/ Max Central has some very telling charts for both the city and surrounding towns. The first shows that the number of active listings has “dramatically increased” since December of 2009. At the end of June the inventory stood at 11,609 homes– a more than 100 per cent increase from December. “The inventory has not been this high since April of 2008.” says Maclean.

In terms of sales, MacLean’s second chart shows they have fallen for three months in a row to 1,811 for the city and smaller centres. This is down from the peak of slightly more than 3,000 sales in June of 2009. And a third puts it all in perspective, showing just how flat sales have been while listings have risen for six months after falling for nine straight months.

One of the key elements of the marketplace right now is the large number of homes for shoppers to choose from, says Scott, who is also president of Royal LePage Solutions Inc.

“Overall, we’re about double what we were a year ago,” says Scott. “In talking with realtors, they are showing a lot of vacant properties.”

That, she adds, is an indication investors are losing tenants and are starting to put their homes on the market. Or for some others, the time has come for them to cut their losses.

In addition, the first-time buyers are not the power they were just a few months ago. “They’re gone, and now it’s the moveup buyer that’s coming in — and they have something totally different to sell,” Scott says.

Matter of fact, it’s the moveup sector that is holding the price at just about June 2009 levels. Last month, board figures show 38 properties priced at $1 million or more changed hands — the same number as a year ago.

“Calgary home sales continue to shift to higher price point and this has resulted in our average price holding firm,” says the board president. So far this year, 187 detached sales have occurred at the million-plus level, up from 132 in 2009. On the condo side, two sales in this price category last month brings the year-to-date total to five.

The most active areas of the resale market in June were those below $500,000, accounting for almost 70 per cent of total detached sales. A year ago it was just over 76 per cent.

“We said at the first of this year it was going to be an up and down market, and that it would be a buyers’ market,” says Scott.

Not much is going to change until the inventory starts to come down, but that will take time,

“Maybe by September or October things will get closer to normal — but anytime now would be fine with me,” she adds.

Another element at play is the impact of slightly higher mortgage rates and adjustments to new mortgage rules.

Then again, like the housing market itself, the world of mortgage rates is fluctuating — up a bit, fall back, up a bit

“Nonetheless, the economic outlook for Calgary and for Canada remains upbeat and should ensure consumer confidence remains in positive territory for the balance of 2010,” says Scott.

© Copyright (c) The Calgary Herald

Calgary lags major Canadian cities in home price gains: Report

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By MARIO TONEGUZZI, Calgary Herald July 28, 2010 9:02 AM

CALGARY – Calgary had one of the lowest year-over-year house price gains in the country in May, according to a national report released Wednesday.

The Teranet-National Bank House Price Index, which surveys six major centres in Canada, said house prices in Calgary rose by 7.8 per cent from May 2009.

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 of the index.

Year-over-year, the composite index rose 13.6 per cent nationally consisting of increases of 17.1 per cent in Vancouver, 16.0 per cent in Toronto, 11.4 per cent in Ottawa, 8.5 per cent in Montreal and 5.6 per cent in Halifax.

On a monthly basis, prices increased in each of the six regions covered and by 1.3 per cent overall, the 13th consecutive monthly rise.

Prices gained 2.3 per cent in Ottawa, 1.8 per cent in Montreal, 1.2 per cent in Vancouver and Calgary, 1.1 per cent in Toronto and 0.7 per cent in Halifax.

In April, the index said Calgary showed year-over-year price growth of only 4.2 per cent — the lowest rate in the country behind Toronto at 17 per cent, Vancouver at 15.6 per cent, Ottawa at 9.7 per cent, Montreal at 8.2 per cent and Halifax at 6.3 per cent.

The national composite was 12.9 per cent.

On a monthly basis in April, Calgary saw prices rise by 0.8 per cent — the same as the national average.

MTONEGUZZI@THEHERALD.CANWEST.COM

© Copyright (c) The Calgary Herald

‘Crummy’ June sees home sales slide

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By Mario Toneguzzi, Calgary Herald July 3, 2010

The downturn in Calgary’s residential real estate market was dramatically evident in June as MLS sales plunged from year-ago levels.

Sales in the single-family home category of 1,061 for the month plummeted by 42.24 per cent while condominium transactions of 445 took a nosedive of 39.7 per cent.

Diane Scott, president of the Calgary Real Estate Board, called the June numbers “crummy.”

“It’s a buyer’s market. We have evolved into a buyer’s market, but the buyers aren’t buying,” said Scott.

“It makes for a quiet market.”

While the number of properties for sale continued to rise, average sale prices moved upwards as well — by 7.79 per cent for singlefamily homes to $481,964 and by 2.33 per cent for condos to $292,238. The average prices were buoyed by an increase in sales in the luxury home market, particularly for singlefamily homes.

An increase in the luxury home market has kept average prices elevated and that speaks to the confidence people with plenty of money have in the economy, Scott said. “As far as the average buyer-seller out there, it’s a different market than we’ve seen in prior years. It’s going to slump over the summer and stay in a buyer’s market.”

She said Calgary will continue to see a moderation in home sales in the face of higher mortgage rates, increased inventory levels and a decreasing number of fi rsttime homebuyers entering the market.

New listings in June rose from a year ago by 21.79 per cent for single-family homes to 2,733 and by 16.94 per cent in condos to 1,084.

The month-end inventory for single-family homes for sale stood at 5,991, up from 3,395 in June 2009 while for condos it has risen to 2,626 from 1,744 last year.

The pace of sales in the local housing market has been moderating, said Richard Cho, senior market analyst for Calgary for Canada Mortgage and Housing Corp.

“More conservative lending practices, higher financing costs as well as elevated unemployment and weaker net migration have tempered resale activity,” he said. “With more new listings entering the market and the pace of sales slowing, active listings have -on the rise.”

Cho said average price growth is expected to soften in the months ahead because of the moderation in sales and rise in listings.

June was the second consecutive month that year-over-year sales for both single-family homes and condos have been down.

In May, there were 1,262 single-family home sales for an average price of $483,240 and 518 condo sales for an average of $304,662.

Homebuyers are taking a bit of a breather right now in the local market, said Todd Hirsch, senior economist with ATB Financial in Calgary.

“In the spring, there was the anticipation that mortgage rates would be rising soon, and that brought forward some buyers that would have normally waited a bit longer to buy. So now, there are somewhat fewer buyers in the market,” Hirsch said.

He said listings always rise when prices are rising. “Homeowners anticipate that they can get a good price, and some owners put their home on the market at an unrealistically high price just to see what happens,” explained Hirsch. “But if there are too many homes on the market, it eventually forces the price down as home sellers compete for buyers. “So if prices fall, the pendulum will eventually swing the other way and listings will fall too.”He said prices have not caught up with the rising inventory of homes on the market, and with slowing demand.”But prices cannot keep rising for long. In fact, prices are likely to be flat or even dip a bit in the second half of 2010 as demand slows and listings rise,” added Hirsch.

In the towns surrounding Calgary, overall sales in June dropped by 35.38 per cent from a year ago to 305 sales with an average price of $378,237, which was up 6.75 per cent. The country residential market, which includes acreages, saw sales drop by 30.23 per cent to 60 but the average price jumped 27.57 per cent to $943,400.

Gregory Klump, chief economist with the Canadian Real Estate Association, said activity is easing most among first-time homebuyers, but it’s still above year-ago levels for luxury homes and that’s helping to skew the average price higher.

“That’s what’s resulting in these year-over-year price gains in average price as at the same time sales are easing,” Klump said.

“One of the fundamental things, when the Bank of Canada raised interest rates in early June, I think that injected a lot of caution among first-time homebuyers. They want to see how things are going to play out and that’s also showing up in the consumer confidence numbers as well, that people have become more cautious.”

mtoneguzzi@theherald. canwest. com

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Single-family, condo sales take June nosedive

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By Mario Toneguzzi, Calgary Herald July 2, 2010

CALGARY- MLS sales plunged in June in Calgary in both the single-family home market and condomiminums.

Statistics released today by the Calgary Real Estate Board showed sales in the single-family home category of 1,061 for the month plummeted by 42.24 per cent while condominium transactions of 445 declined by 39.70 per cent compared with year ago levels.

While the market continued to add new listings, average sale prices inched upwards – by 7.79 per cent for single-family homes to $481,964 and by 2.33 per cent for condos to $292,238.

“We are seeing continued moderation in Calgary’s home sales in the face of higher mortgage rates, increased inventory levels and a decreasing number of first-time homebuyers entering the market,” said Diane Scott, president of the Calgary Real Estate Board. “Our sales trends in June reflect much of what we saw in May.

“Changes to mortgage rules meant a good portion of homebuyers wanted to get in before the new regulations took effect in April. This, along with rising interest rates on the horizon, pulled forward sales we might have expected in May and June.”

She said the one market that seems to be bucking this moderating trend is the luxury or higher-end market. For example, in the first six months of this year, 187 single-family homes in the city sold for $1 million or more, compared with 132 in 2009.

New listings in June rose by 21.79 per cent for single-family homes to 2,733 and by 16.94 per cent in condos to 1,084.

In the towns surrounding Calgary market, overall sales dropped by 35.38 per cent from a year ago to 305 sales with an average price of $378,237 which was up 6.75 per cent. The country residential market which includes acreages saw sales drop by 30.23 per cent to 60 but the average price jump 27.57 per cent to $943,400.

“We had an impressive housing recovery in the late spring and summer of 2009. As expected this rate of recovery will moderate in the latter half of 2010 in the face of rising mortgage rates and slowing demand—keeping Calgary’s housing market in balance,” said Scott.

“Nonetheless the economic outlook for Calgary and for Canada remains upbeat and should ensure consumer confidence remains in positive territory for the balance of 2010.”

June was the second consecutive month that year-over-year sales for both single-family homes and condos have been down.

In May, there were 1,262 single-family home sales for an average price of $483,240 and 518 condo sales for an average of $304,662.

MTONEGUZZI@THEHERALD.CANWEST.COM