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June 1/17 CREB Home prices stable

June 6th, 2017 by ewingteam

Home prices remained stable in May

Demand for detached housing continues to rise

Fueled by the detached sector, Calgary home prices trended up for the fourth consecutive month, but remain below 2014 highs.

“The economic climate is supporting detached housing market recovery,” said CREB® chief economist Ann-Marie Lurie.

“Improved demand and easing supply has created more balanced conditions and ultimately some modest price gains. While it will still take some time for prices to recover, the transition in the detached segment is an important first step to stabilization across all segments of the housing market.”

For the first time since June 2015, prices in the detached sector did not decline on a year-over-year basis. Unadjusted detached benchmark prices reached $509,000 in May, one per cent higher than last month and May 2016 levels.

Like the detached market, the attached product has moved towards more balanced conditions. This has supported some recent directional shifts in pricing. However, monthly price declines had fallen by 4.7 per cent over peak levels and year-to-date benchmark prices remain two per cent below last year’s levels.

“We can really see a slow but sure recovery in the housing market,” said CREB® president David P. Brown.

“Demand for detached product is driving a new sense of optimism for consumers as we move further into spring.”

Against this backdrop, the number of new listings rose to 3,866 units in May, which is 17 per cent higher than last year’s total for the month. Despite this rise, year-to-date new listings have declined by one per cent over last year.

“With the change in market dynamics, people no longer feel like they may need to settle for a second choice in a property,” said Brown.

“There are lots of housing choices in every segment of the market and that made for a good situation in an already active spring market.”

From CREB May 1/17 Hold Steady

May 1st, 2017 by ewingteam

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.”

April 2017 from CREB

April 30th, 2017 by ewingteam

Housing market set for favourable lead into spring

Detached prices stabilize as city-wide inventory trends down

After a long period of disconnect between supply and demand, Calgary’s detached housing sector is firmly in balanced territory. Sales were still 10 per cent below long-term trends in March, but above levels seen in recent years, while average inventory declined compared to last year, supporting price stability in the detached market.

“It’s not so much that demand went through the roof in March, but that we had less supply come onto the market, which is really helping to balance things out,” said CREB® president David P. Brown. “These changes are lifting the cloud of uncertainty for housing consumers and nicely positioning our market as we move into the more active spring season.”

Unadjusted detached benchmark prices totaled $503,900 in March, 0.4 per cent above last month and similar to levels recorded last year. Meanwhile, Apartment and attached prices continue to remain well below levels recorded last year.

“Market conditions are quite different in the apartment sector,” said CREB® chief economist Ann-Marie Lurie. “The additional supply coming from the new home sector is not easily reversed and the added competition is continuing to weigh on prices in the higher density sectors of the market.”

City-wide inventory levels totaled 5,114 in March, 16 per cent below last year’s levels. This is primarily driven by the 25 and 17 per cent contraction in the detached and attached markets. Inventory levels in the ownership apartment sector remain three per cent higher then levels recorded last year.

“The housing market transition in the first quarter appears to be consistent with trends in the labour market,” said Lurie. “However, the way the rest of the year unfolds will be largely determined by what happens in the next two quarters, as nearly 60 per cent of all housing sales typically occur in that time frame.”

Transition in the Making CREB March 1/17

March 26th, 2017 by ewingteam

A transition in the making

by CREB on March 01, 2017

Detached sales activity boosts February housing market

After the first two months of the year, Calgary’s detached sector continues to drive a slow transition in the housing market. February sales totaled 1,342 units, which is still 19 per cent below long-term averages, but an improvement over the past two years.

As sales kept trending upward, detached inventory levels continued to ease in February. These conditions caused months of supply to fall to 2.4 months, putting less downward pressure on pricing. Unadjusted detached benchmark prices totaled $501,900 in February, which is one per cent lower than prices recorded last year, but slightly higher than January figures.

“There seems to be a new sense of optimism these days,” said CREB® president David P. Brown. “Some sellers are feeling upbeat about the changing landscape and the improved chances of selling their home. Other people are looking at the spring market with caution and wondering if we’re going to see a higher than expected surge of listings. While there’s less product on the market right now, sellers still need to be realistic with their pricing.”

The amount of excess inventory eased in the overall market in February, setting the stage for a transition to a more stable market this year. Months of supply totaled 3.4 months, down from five months over last February. At the same time, the sales-to-new-listings ratio trended from a near record February low of 39 per cent last year to 55 per cent this February.

With sales improving and new listings and inventories contracting—two key measures of market balance, there’s good evidence to show that the housing market has started a trend toward more balanced conditions.

“The transition in the housing market appears to be underway,” said CREB® chief economist Ann-Marie Lure. “However, it is important to note that this change is primarily being driven by improvements in the detached market and stability in the labour market.”

“It will take some time for these conditions to translate into all housing segments and achieve price recovery,” said Lurie. “But all indicators continue to point toward a slow transition from a contracting market toward one that is stabilizing at lower levels.”

Feb. 1/17 from CREB Statistics

February 5th, 2017 by ewingteam

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.

January CREB. Slow transition for housing in 2017

January 22nd, 2017 by ewingteam

Calgary, Jan. 11, 2017 – After a long period of economic downturn, Calgary’s housing market is expected to see some price stability in 2017, but not across all market segments and property types. Both detached and attached prices remain unchanged over 2016 levels, while apartment is forecasted to contract by another two per cent.

“The transition in the housing market will be a slow process,” said CREB® chief economist Ann-Marie Lurie. “We are entering the year with high unemployment rates and the possibility that job growth will not occur until the latter portion of 2017. These conditions will continue to weigh on housing demand, but supply is adjusting to weaker sales activity, which will eventually translate into price stability.”

City-wide sales are forecasted to total 18,335 units in 2017, a three per cent gain over 2016, but 12 per cent below long-term averages. This modest demand change will merge with declining listings and easing inventory in the new home market to support more balanced conditions and prevent further downward pressure on prices.

“This year is about moving away from extremely challenging conditions,” said 2017 CREB® president David P. Brown. “The transition is going to take some time, which means sellers need to stick with the fundamentals of pricing their homes correctly against other comparable product in the market. There’s still lots of choice out there for buyers, but major price declines are unlikely in most segments.”

Alberta’s economy was much softer than many predicted over the past two years, as prolonged weakness in energy weighed on other sectors of the economy, including housing. Since the start of the downturn in late 2014, price adjustments have ranged from a low of nearly five per cent in the detached sector, to a high of 11 per cent in the apartment sector. The amount of price change between these different areas of the market was based on how much oversupply there was in each sector at any given time.

Our housing market is moving toward a new equilibrium, but that shift is heavily dependent on stability in the energy sector and overall labour markets. There is also considerable risk from recent government policy changes that could derail expected gains in the second half of 2017. It’s a new outlook this year, but the market risks shouldn’t be overlooked.

For the entire CREB® forecast, visit creb.com.

December market summary from CIR Realty

January 22nd, 2017 by ewingteam

December Market Summary

With 2016 officially in the record books, we can at least say it ended on a good note.

Decembers total sales were up 6.14% over last Decembers sales, while the listing inventory was down 13.25%. This decrease in listing inventory, and increase in sales, helped keep the market relatively balanced with a 4.04 absorption rate. The benchmark price in December declined -3.84% which also reflects the years decline of -3.84% in the benchmark price dropping to $440,650.

Interestingly enough the $800,000+ market has continued to out perform last year at this time which is actually helping drive the average price for the year up 2.16% to $479,522. It is interesting to see the benchmark price decline while the average price increased. This suggests that while the lower markets are still seeing some market adjustments; the higher end markets that were hit harder seem to be showing signs of recovery.

CREB Dec 1/16 Nov sales slide into…

December 1st, 2016 by ewingteam

November sales slide into old patterns

Coming off a month of stronger sales activity, November’s housing market returned to previous trends. Year-over-year monthly sales totaled 1,227 units, which is nearly three per cent lower than last year and 17 per cent below long-term averages.

“November was the first full month with CMHC’s new lending rules in effect,” said CREB® chief economist Ann-Marie Lurie. “As suspected, the gains in last month’s sales were temporary. Stringent conditions for borrowers are converging with the current economic climate and weighing on demand.”

While supply levels eased in November, the decline in sales resulted in a slight rise in months of supply. This caused benchmark home prices to contract even further. City-wide prices totaled $436,200 in November, a 0.6 per cent decline over the previous month and nearly 4.1 per cent below last year’s levels.

Detached home prices totaled $498,300 in November, making it the first time since early 2014 that the monthly benchmark price dipped below $500,000. Despite this price change, the detached resale sector has still fared better than most of the high density sectors, as it has not faced the same city-wide inventory pressure coming from the new home market.

Year-to-date detached sales have declined by three per cent compared to last year, but have also seen some modest improvements in recent months in the high end of the market, which is likely a byproduct of larger price adjustments.

“These monthly figures aren’t a big surprise given the dynamics of our market right now,” said CREB® president Cliff Stevenson. “We’ve seen pockets of sales activity in certain areas, but also lots of months where the expectations between buyers and sellers just aren’t matching up. November was one of those months.”

“Again, it can’t be overstated how important it is for housing consumers to keep asking questions and drilling down on what’s happening in their specific area,” adds Stevenson. “This kind of exploration and learning is how good real estate decisions get made in any market.”

Oct 26/16 CMHC Calgary overvalued!!

October 26th, 2016 by ewingteam

On October 26/16 CMHC news release. Most Canadian Housing Markets Overvalued, Price Growth to Slow Through 2018: CMHC Reports
OTTAWA, October 26, 2016 — Canada Mortgage and Housing Corporation (CMHC) is finding strong evidence of problematic conditions for Canada overall. Home prices have risen ahead of economic fundamentals such as personal disposable income and population growth, resulting in overvaluation in many Canadian housing markets. However, the combination of overvaluation and overbuilding should help slow the growth in resales and house prices and lead to a moderation in the pace of housing starts.
Toronto and Vancouver were flagged as RED.
Calgary was flagged as YELLOW.
Read the full article on the CMHC web site. More potential problems for Calgary’s already deflated real estate market.

Mortgage Changes advisory from AREA Oct. 6/16

October 6th, 2016 by ewingteam

October 17, 2016 is a critical date – changes to mortgage insurance rules were announced by the federal government and will take effect that day. Do you understand the changes and how they will impact your clients and the real estate industry?

Mortgage insurance rules will change to require all insured mortgages to undergo a ‘stress test’ from the lender. That test will require the buyer to qualify for a mortgage at the Bank of Canada posted rate, currently 4.64%, even though they would still receive the contract rate.

The buying power of the client will be lowered by the need to qualify at the higher rate.

Example (as provided by a mortgage professional)

Family A is qualifying for a mortgage using the following information:

Current Annual Family Income $87,000
Household Debt Payments $700 per month
Property Tax Payments $3,000 per month
Down Payment 5%
Mortgage Rate 2.49%

Result:
•Qualifying for a mortgage today, Family A qualifies for a purchase price of $450,000.
•Qualifying for a mortgage after October 17, 2016, given the need to qualify at the Bank of Canada rate of 4.64%, Family A qualifies for a purchase price of $360,000.

Questions

Ask your clients to speak with a mortgage professional about their circumstances. In many cases, the changes will affect their buying power and adjustments may need to be made to their search criteria.

Accepted Offers to Purchase signed before October 17, 2016 will qualify under the current rules provided that the mortgage is funded by March 1, 2017.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Calgary Real Estate Board
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