CREB Statistics – April 2016

Minding the gap
Sellers continue to adjust pricing expectations

Market imbalance in Calgary’’’s residential resale housing market continued to weigh on citywide prices in April.

Much like the previous month, year-over-year sales fell while new listings increased, resulting in inventory gains across all sectors of the market.

As a result, benchmark prices in the city declined by 0.4 per cent from last month, and 3.4 per cent from last year, to $441,000.

For sellers, the reality of seven consecutive months of price declines has started to sink in, said CREB® president Cliff Stevenson.

“From re-considering the listing of their home to lowering expectations on price, sellers are beginning to adjust to the current market reality,” he said. “However, some buyers in the market are still not willing to pull the trigger because they expect even bigger discounts. And so that gap between buyers’ and sellers’ expectations still persists across many product types and locations.”

Despite this, the detached sector fared better relative to the other sectors of the market. While detached sales activity has fallen by over four per cent so far in 2016 compared to last year, the sales to new listings ratio improved in April. This prevented sharper inventory gains and caused months of supply to move toward more balanced levels.

The same cannot be said of other market sectors. Year-to-date apartment and attached sales declined by a respective 19 and 13 per cent compared to last year. Slower sales, combined with rising inventories, ensured that market conditions continued to favour buyers in these segments.

“While the weak economic climate is influencing demand, the apartment and attached sectors are further impacted by increased supply in the competing new home sector and rental markets,” said CREB® chief economist Ann-Marie Lurie. “This is one of the contributing factors to the steeper price declines recorded in the apartment sector.”

Since the start of the price declines, monthly unadjusted benchmark apartment prices have declined by 7.6 per cent, while semi, row and detached have declined by a respective 5.9, 4.6 and 4.1 per cent.

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CREB Statistics – March 2016

Home prices declined further in March as economic conditions weigh on Calgary’s housing market.

Calgary’s benchmark price totaled $442,800 in March, a 0.49 per cent decline over February and 3.51 per cent lower than levels recorded last year.

“With no improvement in the labour market, it’s no surprise that we continue to face downward pressure on housing sales activity and prices,” said CREB® chief economist Ann-Marie Lurie.

“Provincial unemployment rates are at the highest level recorded since the early ‘90s,” said Lurie, adding that Calgary’s unemployment rate in February rose to 8.4 per cent, which is higher than the provincial average of 7.9 per cent.

March home sales in Calgary totaled 1,588 units, 11 per cent below the same time last year and 28 per cent lower than long-term averages for the month.

Calgary also saw housing supply gains in most price ranges. Inventory levels rose by seven per cent to 6,084 units in March. Overall, months of supply has averaged five months in the first quarter of 2016.

“As we move into spring, we are starting to see more foot traffic at open houses and showings from potential buyers,” said CREB® president Cliff Stevenson. “For now, this activity hasn’t translated into improved sales in most segments of the market.”

The apartment sector has been the hardest hit by the recent downturn. After the first quarter of the year, apartment sales totaled 554 units, a 17 per cent decline over the same period last year.

Apartment benchmark prices have been trending down since late 2014. In March, benchmark apartment prices totaled $281,300, seven per cent lower than levels recorded prior to the slide and 4.93 per cent lower than levels recorded last year.

The detached and attached sector has also felt the brunt of Calgary’s weakening economy. Detached and attached home prices have dropped by four per cent from the recent peak.

“Homebuyers continue to wait and see if there are going to be further declines in home prices before making an offer,” said Stevenson. “Timing the bottom of the market is proving to be quite a challenge in the housing market we are faced with now.

CREB Statistics February 2016

February sales totaled 1,127 units in Calgary, a 6.63 per cent drop over last year and 37 per cent lower than long-term averages for the month.

City wide unadjusted benchmark prices totaled $445,000 in February, a 0.63 per cent decline over January and 3.45 per cent lower than levels recorded last year.

“Slow sales and elevated housing inventory has resulted in further price declines,” said CREB® chief economist Ann-Marie Lurie. “Given the current economic environment, it is no surprise that consumer confidence and housing demand is being impacted.”

Calgary has seen employment fall for eight consecutive months, while unemployment rates have reached levels higher than the previous recession, said Lurie, adding that these conditions are expected to persist over the next several months.

While the number of new listings in Calgary continues to fall, inventory levels have remained elevated at 5,681 units. Overall, market conditions continue to favour the buyer with five months of supply.

“The high volume of inventory that we’re seeing has pushed sellers to be more realistic about their pricing expectations and the amount of time their properties may be on the market,” said CREB® president Cliff Stevenson. “Buyers are less likely to submit an offer if there’s a big gap between the listing price and what they are willing to pay. A solid selling strategy can really make the difference in this market.”

In February, there was a noticeable shift in the share of sales in the apartment and attached sectors. The apartment segment dropped to 15 per cent, while the attached market rose to 24 per cent. Overall, the apartment and attached sectors typically represent 17 and 22 per cent of the market respectively.

“Some of the shifting sales from the apartment to attached sectors are likely related to more options in the lower price range of the attached market,” said Stevenson.

The attached market is the only segment that recorded a year-over-year rise in sales activity. While this is partially related to the extra day in February this year, overall activity remained higher than the February lows recorded in 2009.

Meanwhile, both detached and apartment sales declined over last year’s activity and fell to the lowest February level recorded in over a decade.

The detached market recorded a fall in new listings, which prevented inventory levels from rising to new February highs. In fact, detached inventories remain 32 per cent below peak levels recorded in 2008.

While buyers have lots of choices, the detached market continues to show varying trends based on price range. Most notably, there is some evidence of imbalance starting to impact the $500,000 – $599,999 range of the market.

The detached benchmark price totaled 504,400 in February, a 0.71 per cent decline over the previous month and 3.19 per cent below February 2015 levels.

Ray of Sunshine

From the Calgary Real Estate Board (CREB)

Residential homeowners left in the dark as province rolls out solar energy incentives

While the sun is set to shine a little brighter on some Albertans with news the provincial government will be offering increased incentives for solar power, others in the province are saying they’re being left in the dark.

The Alberta government recently announced a $5-million Municipal Solar Program as part of its Climate Leadership Plan. Included in the plan are rebates of up to $0.75 per watt, to a maximum of $300,000 per project, to communities that install solar panels or set up solar panels in fire halls, community centres and offices.

Another $500,000 will go toward Alberta farmers who wish to generate their own electricity.

However, with the program largely ignoring the vast majority of residences, critics of the new incentives say they don’t do enough to encourage more Albertans to go green.
“It’s a good start, but they’re not doing anything for residential houses. It’s all commercial and rural,” said Greenenergy Renewable Energy Ltd. president Geoff McArthur

Founded in 2007, the Calgary-based company offers renewable energy equipment and systems to residential and commercial customers primarily in the Calgarian area, as well as in B.C.’s Shuswap region.

McArthur said while he’s already seen an uptick in the number of rural Albertans looking to add solar energy to their farms, many would-be residential customers could end up waiting for wider-reaching incentives.

“It is triggering things,” he said. “A lot of people were sitting and waiting on the fence, waiting for incentives to come, and we still have many customers that are waiting for incentives to come for residential.”

With the funding expected to account for about 160 projects and reduce carbon emissions by up to 8,400 tonnes over the next 25 years, Environment Minister Shannon Phillips has said the program is “just the beginning.”

“The trouble is when you put out these carrots, it makes people sit and wait,” said McArthur. “So the residential homeowners are going to wait now, which means it’s going to be difficult for our business.

“You either have to do it, or don’t talk about it. It’s good that they’re doing it, but I would rather it went to the actual homeowner or farm owner, rather than companies or municipalities.”

The agricultural solar program builds on a pilot project that saw 61 projects reduce greenhouse gases by more than 360 tonnes and add almost 500 kW of capacity to Alberta’s electricity grid.

Under the new program, farmers with a minimum of $10,000 farm commodity or livestock production income can receive 35 per cent of eligible costs (up to $50,000) for construction projects that install “high-efficiency equipment” or retrofit projects that improve the operation’s energy usage.

“Agricultural producers embrace innovation and are good stewards of the land. The solar installation program will help increase farming efficiencies, reduce power bills and greenhouse gas emissions and add to Alberta’s power grid,” said Agriculture and Forestry Minister Oneil Carlier.

Asked whether the province had any plans to widen the current incentive to urban residences, the premier’s office said there is no timeline for expansion.

Currently, homeowners looking at installing their own solar energy system can expect to recoup their investment in 10 to 12 years.

Asked what sort of interest level he’d expect from Albertans should the government move to make the same incentives available to those in more urban centres, McArthur said “the uptake would be considerable.”

According to critics, the newly announced incentives will account for just six mW of the province’s 17,000 mW power grid – a small
percentage of the targeted 30 per cent of electricity generation from renewable energy by 2030 in the province’s climate change plan.

Examples of buildings under the program include arenas, administration buildings, police stations, fire halls, recreation centres, libraries, public works shops, and community centres. Community organizations are also eligible to participate. However, they must occupy municipally owned buildings and municipalities must apply on their behalf.

The program provides a rebate ($/watt) based on installed solar capacity to a maximum of 20 per cent of capital costs or $300,000. To receive funding, participants must install solar PV and conduct public outreach following completion of the installation. The rebate will be issued to municipalities after project completion is verified.

Funding is available on a first-come, first-served basis.

Applications for the Municipal Solar Program open March 1. Applications for the On-Farm Solar Management program open Feb. 8.

CREB January 2016 Statistics

Slow sales activity and inventory gains place downward pressure on prices

Calgary, Feb. 1, 2016 – Calgary’s housing market is starting 2016 firmly in buyers’ market territory, much the same as last year ended.

“The recent slide in energy prices has raised concerns about near- term recovery prospects for the city,” said CREB® chief economist Ann-Marie Lurie. “Energy market uncertainty and a soft labour market are weighing on many aspects of our economy, including the housing sector.”

City wide, January sales totaled 763 units, 13 per cent below last year and 43 per cent below long-term averages. While new listings declined by 16 per cent compared to January 2015, the number of new listings far outpaced the sales, causing inventory gains. January’s city wide months of supply levels rose above six months.

“Selection for buyers in all product types and price ranges has improved,” said CREB® president Cliff Stevenson. “More choice and

low interest rates have encouraged some potential buyers to start window shopping. So far, this hasn’t translated into sales activity as many are waiting for steeper price declines from motivated sellers.”

The aggregate benchmark price of $447,300 in January was 1.21 per cent lower than the previous month and 3.27 per cent below the January 2015 price of $462,400.

“As expected, the imbalance between housing supply and demand is continuing to place downward pressure on prices,” said Lurie. “However, the recent price retraction has not erased all the gains recorded in recent years, as the benchmark price remains 4.41 per cent above the January 2014 price of $428,400.”

While all property types have recorded price contractions from recent highs, the largest price declines have occurred in the apartment sector as this segment has had elevated months of supply since the second quarter of 2015.

The apartment benchmark price totaled $281,900 in January, a year- over-year decrease of 6.35 per cent and 2.12 per cent lower than the previous month’s price. In fact, apartment sector prices have once again fallen below the 2007 monthly high of $301,500.

The detached segment of the market continues to show variations depending on price range. The under $500,000 segment remains relatively balanced. However, recent trends are pointing to weaker sales- to-new listings ratios in the $500,000 to $600,000 range of the market.

“Calgary’s housing market continues to face a wide range of challenges,” said Stevenson. “Sellers are reflecting on their expectations and considering all options available to them, given the dynamics of their specific market. In this environment, buyers have the opportunity to carefully consider their housing needs and make a decision based on their lifestyle and future goals.”

January 2016 Newsletter

Monthly E-Newsletter_Jan2016

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Alberta’s All-Time Most Expensive Listing

A working cattle ranch south of Calgary has been listed at $54 million, the most expensive residential listing in Alberta ever.

CBC News reports that the Bar-N Ghost Ranch in Willow Creek is set in more than 14,000 acres and comprises six properties; the main house of 5,200 square feet, a guesthouse and four for staff.

Sotheby’s International is handling the listing and notes that the ranch also includes a trout pond, water springs and hunting. The massive price tag also includes all the furniture and art collection.A

Market moves toward balanced conditions

by CREB JUN 5, 2015

For the first time since December 2014, Calgary’s residential unadjusted benchmark prices improved over the previous month. Within the city of Calgary, housing prices totaled $454,100 in May, a monthly and year-over-year increase of 0.55 and 0.96 per cent.
For the third month in the row, new listings have eased compared to last year, helping push the market toward more balanced conditions, despite the current environment of slower sales activity,” said CREB® chief economist Ann-Marie Lurie. “This has helped prevent further declines in the unadjusted benchmark price.”

New listings in the city of Calgary totaled 3,161 units in May, a 27 per cent decrease over last year. Meanwhile, total inventory levels for the month were 5,342 units, 16 per cent higher than last year, but eight per cent lower than May levels recorded over the past five years and three per cent lower than average levels over the past 10 years.

Two measures of balance are the months of supply and the sales to new listings ratio. In May, the months of supply decreased to 2.43, while the sales to new listings ratio was 69 per cent, both within the norms for balanced conditions.

“Back in January, higher inventory levels relative to sales activity caused months of supply to rise above five months,” said CREB® president Corinne Lyall. “While some challenges continue to exist for sellers, depending on the property type, price and location, the decline in the months of supply points toward more stability for both buyers and sellers.”

Year-to-date the detached sector recorded the largest decline in new listings at eight per cent. While overall inventory levels are 12 per cent higher than last year’s levels, they remain well below the five and 10 year averages for May.

Detached sales activity in May totaled 1,366 units, with the majority of transactions occurring below $500,000. While conditions are not as tight as last year’s market conditions, which favoured the seller, over the first five months of this year activity in this price range has remained relatively balanced.

“This segment of the detached market continues to have a good amount of consumer activity, as many have taken advantage of the improved selection compared to last year,” said Lyall. “While some have waited for steeper price declines, to this point it just hasn’t happened across all areas of the market. This is partly related to activity in the under $500,000 segment.”

Meanwhile, year-to-date apartment sales and new listings totaled 1,383 and 3,229 units respectively. The May apartment benchmark price of $294,800 increased by 1.20 per cent compared to last month, but remains 0.2 per cent below May 2014 figures.

The apartment sector continues to remain the only sector where prices have contracted relative to last year’s figures.

“While the resale market has recorded an easing of upward inventory pressures, the new home sector has started to record some gains in inventory,” said Lurie. “Current new home inventories remain relatively low. However, the overall impact on Calgary’s housing prices will ultimately depend on the duration of the economic slowdown and the amount of inventory build-up in the new home sector.