Calgary Real Estate Blog

I’m often writing/bragging about how well the real estate market is doing locally, and with good reason: it’s on fire like we haven’t seen in eight years. But it’s encouraging to hear some good news coming in from around the country, especially major markets like Vancouver and Toronto.

The Conference Board of Canada predicted today that the condo market is unlikely to plummet, even in Toronto where there has recently been concern about an abundance of new multi-family dwellings being built. While things may cool a bit, especially if interest rates rise, the Conference Board concluded that banks were doing a good job of keeping construction from getting out of control by virtue of construction loans being contingent on pre-sale thresholds, and growing populations in metropolitan areas will continue to be on the lookout for condos.

And the Canadian Real Estate Association is talking about Vancouver’s market growing nearly ten percent year-over-year for July, while Toronto’s up almost thirteen percent.

So, while we’re leading the charge thanks to generous incomes and a growing population, ours isn’t the only city with busy Realtors. I love good news.

It should come as no surprise to readers of this space that 2013 is on track to set a sales record, with well over $9 billion in sales being transacted; to date, the city has seen nearly $7 billion in real estate changing hands. Resale prices are up, and people are still buying, thanks to some very solid employment numbers (we’re one of the country’s only bright points on that front), relative affordability (especially in the condo market), forced moves due to the flood, and just the general appeal of our city to people from all over. Calgary’s a place where you can get a good job and raise a family without too much fear of the bottom falling out of your lifestyle.

So, of course, there’s gotta be the end times coming, and naysayers point to a slowdown in the purchase of land for new properties to show that they’re almost here. Call me optimistic, but I just don’t buy that as proof that we’re in a bubble about to burst. Developers have bought up huge swaths of land recently to keep up with the demand in our hot seller’s market, but they still recognize that the country’s fragile economy will likely lead to some ebbs and flows. So the houses get built, they sell, then new rounds of purchasing can begin. While suggestions that land purchases have dropped more than 50 percent in Calgary year-over-year may sound alarming, the other way to look at that is there was a lot of land bought up last year that’s becoming homes sold this year.

Real estate markets cycle, they don’t generally boom and bust without outside factors manipulating them (as was the case in the US some years ago). So, as I seem to say often around here, take the alarmist news with a healthy dose of skepticism.

The Calgary Herald, whose paywall experiment seems to have gone away, reports today that there’re more houses being sold and bought than you can shake a stick at, despite July traditionally being a slower month, what with the Stampede taking everyone’s time (and speaking of Stampede: bacon-wrapped corn dog. That is all). The Herald uses the word ‘deluge’ to describe the rush of buyers looking to enter the market or move somewhere not described as a flood plain.

I’ve never been one to complain about having too much work, despite it elbowing its way into my personal life more and more (I continued negotiations on two offers during an intermission at Stage West not long ago) and leading to a highly irregular meal schedule, so this is great news for me. I’m still camping with the family (mobile Internet is a beautiful thing for telecommuting from the mountains), still enjoyed some Stampede shenanigans, and still managed to help some great families find great homes. This pace won’t continue forever, so right now I say, “bring it on!”.

With relatively low inventories – and not just because of flood damage – the Calgary real estate market is on fire right now. The Calgary Herald reports that condos, bungalows, and two-storey homes have all increased in price by 6 to 7 percent in the second quarter, year-over-year, as listings regularly receive multiple offers. The flood certainly didn’t help with the inventory crunch, but the overall trends shouldn’t be affected long-term by that mess; this isn’t a short term blip, it’s a larger trend.

And it’s not just the common-man homes that are moving: a record number of $4 million-plus homes have been sold so-far in July (and it’s only the 9th). There’s more inventory available in the luxury market, and the higher prices and low availability of mid-range homes, combined with interest rates that look like they’ll stay low for another couple of years, are all factors encouraging people looking to move up.

So, if you’re thinking about selling your present home and move into something larger, be prepared to act fast once you find that perfect place. And have a solid idea of the maximum you’re willing to spend – those susceptible to getting caught up in a bidding war could take a hit in today’s market. Smart buyers approaching transactions logically and not emotionally, however, should still be able to find the right home at the right price.

It’s nice to see that, notwithstanding the record-high prices and country-leading growth Calgary’s real estate market has been enjoying, it remains among the most affordable markets in the country.

“Well, that’s weird,” you say. “How could a highly-valued market also be an affordable one?” Easy: despite some revenue dips, Alberta’s still rocking and rolling on the economy front. Our version of a ‘tough times’ budget would be welcomed with open arms in many other provinces, especially Ontario and BC, which are the two other biggest provinces for real estate sales. In the article cited above, RBC’s Affordability Index listed bungalows in Calgary at requiring just under 39 percent of an average household’s pre-tax income; in BC, that number is 82 percent.

Many of us make good money for honest work in Alberta, and we like to put it into our homes. Fortunately a middle class family here can afford to do that without having to live on just 18 percent of our gross. That kind of Alberta Advantage helps to make up for snow in May, doesn’t it?

Yet another good news article about Calgary’s real estate market: we saw more than a 10 percent jump in sales from March to April, as opposed to the national trend going down more than three percent in the same period. And this is just the beginning.

Spring is obviously the time new home developers start churning out properties, and despite what the noisemakers might have you believe, there is plenty of land already approved for community growth. New home builds will probably be plentiful, and marketing aggressive. As housing prices continue their steady climb upwards, we can expect lots more existing properties to go on sale with some people looking to move up, and others downsizing.

If you’re thinking about making a move, it’s a good time to sell – prices going up – but also a good time to buy thanks to the copious inventory. Things usually aren’t so balanced, but so it goes in Calgary. I can help you sort it all out – contact me for more information.

The Calgary Real Estate Board monthly reviews the market to determine a benchmark price, which is the price of a typical single-family home in the city (as opposed to an average, which can be skewed when properties like Iginla’s mansion sell). The benchmark price in Calgary for April hit just under $453,000, which snatches the record high from 2007’s booming jaws. The Calgary Herald did a good job running down many of the factors influencing Calgary’s staggering market growth, but what makes me happy is how organically the growth is occurring: there’s no oil boom making people lose their minds or lax regulations letting anyone and his dog qualify for a mortgage. Instead, it’s simply our city being an attractive place to live and work, and there being more jobs to go around then elsewhere.

April was the best sales month I’ve had in my 13-year career, and while each month likely won’t be able to top the last, there are no signs of things slowing down. This is a good time to sell your home – a sellers market – so don’t be shy about giving me a call to explore what your home might be worth.

There’s been some talk lately about why Calgary’s market isn’t booming like it did in 2006-07, when our employment and population growth is similarly exceptional now. While there may be some truth to self-proclaimed experts’ notions that homebuyers are a bit more cautious than they used to be, and that stricter mortgage rules are proving to be a greater barrier to entry in the market, the fact is that I have more listings right now than I have at any one time in my career, and things show no sign of easing up; I’d better go buy some more key boxes. House prices in Calgary are growing at three times the national average (and our commercial real estate market is performing better than anywhere else in the world). This is the best place to be selling a home in the country (and not only because my dad and I work here).

Of course, enthusiasm must be tempered, both to maintain a little perspective and to add a little variety to newspaper articles. But the fact is we are in a great, enviable position right now with a market that’s growing at a healthy and sustainable pace, and that looks to continue on the same path for the foreseeable future. The bidding wars we were seeing a few years ago aren’t nearly as common, yet houses aren’t sitting on the market for months at a time either; buyers are motivated but not bloodthirsty. This is a good thing. Give me a steady upward march over boom-and-bust craziness any day of the week.

This comes as no surprise for me!  The latest CTV news article, Decrease in listings increases demand for Calgary homes, outlines some of the reasons why this year is proving to be a hot one for real estate sales.  There are nearly 20 percent less home listed compared to the same time last year, which is driving prices upwards and days on market downwards.

As our city sprawls out there is also increasing demand for inner-city property.  The Calgary Herald recent posted an article stating that inner-city neighbourhoods saw an increase of 250-260% between 2000-2012.

If you want to take advantage of this market contact me today!

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According to a just-released Harris/Decima poll, 47 percent of Albertans would take a fixed-rate mortgage if they were applying for one today, as opposed to just 26 percent preferring the variable-rate alternative. That’s pretty close to the national number – 45 percent favouring fixed – and not really that surprising. People tend to like predictability, and are often willing to spend a bit more to get it; the popularity of gas and electricity contracts, in a time when both are pretty inexpensive, is another example of this.

There are plenty of reasons to go fixed, and plenty to go variable. The Globe and Mail reported in December that variable-rate mortgages have been cheaper than their fixed counterparts some 90 percent of the time over the past 25 years, meaning those who rode out market fluctuations came out significantly ahead. On the other hand, right now fixed-rate mortgages are being offered for within one percent of variable rates, meaning the premium paid for stability is lower than it has been in the past.

Ultimately, buyers must make their own decisions based on their immediate circumstances, plans for the future, and tolerance for risk. I know some great experts that can help sort through the choices, and am happy to refer my clients to them, but a hard look at one’s own financial goals is key to setting up a mortgage that won’t lead to any lost sleep.