Newsletter – First Quarter 2017

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Newsletter – Third Quarter 2016

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CREB Statistics – November 2016

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.”

CREB Statistics – October 2016

Home sales rebound in October

For the first time in two years, sales activity in October resembled normal levels. City-wide sales totaled 1,644 units, which is an increase of nearly 16 per cent over last year.

“The shift in sales activity this month is likely related to the new mortgage rule changes, inventory gains in the lower price ranges and further price adjustments,” said CREB® chief economist Ann-Marie Lurie. “The combination of all these factors may have encouraged some purchases to take advantage of the market conditions, particularly in the lower price ranges. However, with several factors at play, the monthly shift in demand may be temporary and will need to be monitored over the next several months.”

Sales activity rose across all product types in comparison to last year, but the largest gain in sales occurred in the detached sector at 18 per cent. There was a noticeable shift in sales activity by price range in October. In the detached market, homes priced between $300,000 and $400,000 saw the largest improvement in sales, while attached and apartment sales growth was mainly occurring in the lower price ranges.

“This year has been a challenge for many sellers,” said CREB® president Cliff Stevenson. “So when we have a rise in sales, it means more buyers got into the market and more sellers got out, which is a positive for consumers on both sides of the transaction.”

“Sales activity changed direction in October, but we need to see some consistency next month and the month after to call it a trend,” adds Stevenson. “For now it’s a nice building block.”

Despite the monthly rise, year-to-date sales activity in all sectors remained lower than last year’s levels and well below longer term trends. In fact, year-to-date sales activity has totaled 15,642 units, which is 6.3 per cent below last year’s levels.

While increased activity in the lower price ranges had a greater impact on the average and median price, benchmark prices once again edged down in October. The city-wide unadjusted benchmark price totaled $438,900, or 0.34 per cent below last month and four per cent below last year’s levels.

Since the start of the downturn, home prices have declined from a low of 3.8 per cent in the detached market to a high of 9.4 per cent in the apartment condominium sector. And, despite the rise in October sales, monthly prices continued to decline for most product types in the market.

October 2016 Newsletter

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Mortgage Changes – October 17, 2016

October 17, 2016 is a critical date – changes to mortgage insurance rules were announced by the federal government and will take effect that day.

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.

All Buyer’s should 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

CREB Statistics – September 2016

City of Calgary, October 3, 2016 – 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 prices are reacting very differently in different segments of the market. We’re just not seeing the price declines that buyers have been expecting in all segments of the market.”

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.

CREB Statistics – June 2016

Home prices down, but not out

Calgary home prices continue to slide in most areas of the market, but not at the rate that many might expect. This is partly due to June’s resiliency in the detached and semi-detached sectors of the market, where sales compared to new listings and standing inventory started returning to more balanced levels.

“The detached market has been gradually moving towards more balanced conditions, helping to prevent price levels from declining at the faster rates we saw in the previous two quarters,” said CREB® chief economist Ann-Marie Lurie. “While this is welcomed news for sellers, it’s very likely that pricing challenges will persist in the housing market until economic conditions start to improve.”

Detached benchmark prices totaled $502,400, which is 0.4 per cent higher than last month, but 3.4 per cent lower than last year’s levels. This is the first time in eight months that detached prices recorded a monthly gain, helping ease the quarterly decline from 2.2 per cent in the first quarter to 0.7 per cent in the second quarter.

Overall sales activity remained relatively weak in June, falling by seven per cent to 2,028 units. Inventory levels went in the other direction and continued to climb in June to 5,973 units, 16 per cent higher than last year. Both the attached and apartment segments of the market have recorded inventory gains around 30 per cent, far greater than the year-over-year increase of five per cent in the detached sector.

Higher inventories and weaker demand continue to have a larger impact on pricing in the apartment and row sectors. June apartment prices slid by another 0.1 per cent over last month, pushing the average year-to-date benchmark price down 5.3 per cent below last year. Attached product experienced a monthly slide of 0.3 per cent, mostly due to steeper price declines in row style product.

“The price adjustments that we’ve seen in the past year have allowed some buyers to get into homes that were previously unattainable,” said CREB® president Cliff Stevenson. “This is especially true for homeowners with financial stability and a good amount of equity in their home. With so much choice out there, it’s giving consumers an opportunity to find their ideal home at a price they can afford.”

CREB Statistics – May 2016

Housing supply swells in cool spring market
by CREB on June 01, 2016

Calgary’s housing inventory was on the rise once again in May as new listings climbed and sales slowed to 1,923 units.

“While recent oil price gains may have some feeling optimistic, weakness in the labour market continues to impact housing demand,” said CREB® chief economist Ann-Marie Lurie. “Job losses are spreading into other sectors, wages are declining and unemployment levels remain high. At the same time, we’re seeing housing supply levels rise in the rental, new home and resale markets.”

Inventory levels rose by 14 per cent in May to a total of 6,148 units. Every product type is experiencing these gains, but the largest inventory growth has occurred in the apartment and attached categories. Together, these sectors represent half of all resale inventories in Calgary.

“The resale apartment market has been the most difficult for sellers,” said CREB® president Cliff Stevenson. “They are competing with improved selection in the lower price ranges of the detached and attached markets, and facing increased competition from the new home sector, where builders are offering incentives to attract potential buyers.”

While apartment resale supply remains 22 per cent below the May high of 2,055 units in 2008, the combination of rising supply in the apartment sector and steep declines in sales activity has elevated months of supply to nearly six months.

The apartment sector of the market has experienced buyers’ conditions for more than 10 months, so the impact on pricing is more dramatic, compared to the detached and attached sectors.

In May, the apartment benchmark price totaled $278,500, a monthly and year-over-year decline of 0.7 and 5.6 per cent. In the detached and attached markets, home prices totaled $500,500 and $332,100, a year-over-year decline of 3.4 and 4.3 per cent.

Tidiness Nirvana

Tidiness Nirvana
by Elyse Umlauf
Adapted from the February 2016 Edition of The REsource

There was the FlyLady, the capsule wardrobe, and the 100 things challenge.

Now there’s Marie Kondo, the new reigning queen of the purging and decluttering movement.

Kondo, author of The Life-Changing Magic of Tidying Up wants you to examine everything in your house and ask a simple question: “Does it spark joy?” If it doesn’t, chuck it.

Her second book, Spark Joy: An Illustrated Master Class on the Art of Organizing and Tidying Up, takes her method to the next step and illustrates how to banish mess in every room of the house.

Her book can help you improve your house and make it more livable, and even help you reach some of your sustainability goals. After all, some of her concepts represent the highest form of reducing and recycling.

1. Decluttering. If you’re selling your house, Kondo’s strategies most certainly will allow you to achieve your real estate practitioners’ quest for a decluttered house. Any decluttering you do today will make the selling process easier later.

2. Natural resources. Kondo’s admonishment of only having things that spark joy should help to curb your shopping habits too. Of course, the less you buy the better it is for the environment. Remember that the production of new stuff requires not just raw materials for production, but also fuel to distribute those goods.

3. Clothes. Do you need 12 pairs of jeans, 30 t-shirts and 40 pairs of underwear? Probably not. When you do buy new clothes, steer clear of cheap, throwaway items, also known as fast fashion. Producing fabric has a huge human and environmental impact.
Learn more about fashion’s environmental impact:

www.environmentalleader.com
www.NRDC.org
4. Book hoarding. Whose bookshelves aren’t overburdened? The solution is a cinch. Get a library card or a Kindle and donate your unwanted reads. As for the guilt associated with tossing books, Kondo’s view is, “We read books because we seek the experience of reading. Once read, a book has already been ‘experienced.’”

5. Upsizing. Are you complaining about a lack of storage? Are you thinking about buying a bigger house? Don’t. Kondo, who believes we have far more than we need, has a thought. “Once you learn to choose your belongings properly, you will be left only with the amount that fits perfectly in the space you currently own,” she writes.

Also keep in mind that upsizing chews up more natural resources and brings bigger expenses – taxes, the mortgage payment, maintenance, and utility bills. So maybe it’s worth purging more stuff and embracing Kondo’s view of storage “solutions” as prisons and ways to “bury possessions that spark no joy.”