Calgary Real Estate Blog

As is pretty common in real estate news articles lately, the Herald kind of buried the lede in its latest survey of Calgary’s market. Yes, it’s true that year-over-year sales were predictably down once again, as sectors of our economy continue to suffer. More interesting, though, at least from my perspective, is the fact that detached home sales were down a mere 1.4 percent from last year. Think about that: despite unemployment in the province hitting a 20-year high, houses are still being bought at a rate very close to last year’s. Add in the fact that average sale prices are actually up in some segments, despite a substantial increase in supply, and you have just one more example of the strong fundamentals underlying our real estate market.

The weaknesses in the market right now, rightly noted by the Herald, are the apartment, and attached home (including townhouses and duplexes) sectors, which have seen sharper declines in both sales and selling prices. Still, the drops have been nowhere near as precipitous as you might have expected if the market had been overheated.

The fact of the matter is, real estate in Calgary offers good value for money. We’re a resilient, optimistic city, and a great place to live.

So when you notice a particularly dire headline about the state of our real estate market, consider the purpose of that headline (to encourage clicks and sell papers), and read the entire article before forming an opinion. That’s solid advice for any article you might come across these days, actually.

As always, I’m available to consult on your property, or just to chat, through my contact form.

Even as Calgary’s home market continues to slow, bit by bit, we’re seeing a remarkable increase in the number of homes on the market – supply is up nearly 24 percent from a year ago. This completely makes sense: there’s a wide variety of homes in styles and price ranges to suit nearly every potential buyer in neighbourhoods across the city, and that’s making homeowners who maybe weren’t even planning to move get the upgrade bug, so they put their own property on the market to see if it’ll sell. Add in our economic troubles forcing some to downsize, and you’ve got an abundance of supply.

This can, and is, leading to an expectation gap between some buyers and sellers. While some sellers are still hoping to get prices in the range they might’ve seen a year or two ago, thrifty buyers are using the current situation to pressure for deep discounts. It’s a bit of an impasse that may take some time to smooth out.

So what’s a person to do? My advice is this: if you’re looking to sell, you may need to, as Calgary Real Estate Board president Cliff Stephenson put it recently, “lower your expectations on price.” Calgary’s real estate market remains very healthy and sustainable, but you can’t grow the inventory the way ours has in the past several months without putting downward pressure on asking prices. Consider how quickly you’d like your property to sell, as attractive pricing can help a home stand out in today’s market. There’s no need to drastically undervalue your listing, but you’re not going to get 2014 prices today.

For buyers, don’t expect a fire sale mentality amongst sellers, as our market’s just not there. While there’s a lot to choose from, benchmark prices really haven’t dropped that much, and mid-range homes are still changing hands in a couple of weeks. While there may be a bit more wiggle room than there would’ve been last year, appealing properties are still highly sought after, and bidding wars are not out of the question.

Overall, our market continues to adjust to the new reality, but the fact that it remains relatively stable is a testament to how healthy and realistic it has remained over the past several years. As our economy improves over the rest of the year, we may see some of the downward pressure let up, but really what happens next remains to be seen.

Contact me today for a comparative market analysis today!

Spring is traditionally the time to clean out your house, and for good reason: after a long, cold Calgary winter, you’ve built up a fair amount of clutter from simply being forced indoors for months on end. But what if you were to take some time to organize and clean out your home before the snow flies, making the winter seclusion a little more enjoyable?

Now’s the time to do it, as relatively warm temperatures and (hopefully) dry weather means you can use your lawn as a staging ground. In my experience, the ‘clean sweep’ method is the most effective in getting rid of all that stuff collecting, untouched, in the corners of rooms and basements. Go one room at a time, pulling absolutely everything out and sorting into three piles outside: keep, trash, and sell (or give away). Then, look at your empty room and decide what activities you’d like to see go on there. Write these down, then look at your keep pile and decide what items would be used for those activities; return just the appropriate items to the room. Carry on with the same method throughout the rest of the house, giving due consideration to the purpose of each room. At the end of the process, whatever’s left in the keep pile is stuff you don’t really need or use, so give it away too. At the end of all this admittedly hard work, you’ll have a home made for living, and you’ll be no longer using square footage for which you pay a mortgage to store things you don’t use.

Easier said than done, I know, especially in a big house. The satisfaction when it’s done, though, is unbelievable. Even if it’s just for a couple rooms, consider clean sweeping before the winter and you may just find -30 a little more bearable.

Thinking a move might be the solution?  Contact me today!

You may have read recently that an increase in listings has started to soften Calgary’s market a bit. This is true – there are nearly 20 percent more homes currently for sale than there were a year ago. This is a good thing, as single-family home prices were up more than ten percent, year-over-year, in August, and that kind of increase is obviously not sustainable. Eventually we’ll move away from current market conditions, heavily favouring sellers, to a more balanced situation.

This is a good thing. More families are moving toward condos than detached homes right now because of the affordability factor. As those families grow and start looking for larger residences, a balanced market means they’re more likely to find them at a price they can afford. This doesn’t mean your home’s value will necessarily start dropping, just that its valuation won’t continue to jump at the same speed. You’ll be thankful for this when your property tax bill shows up.

I like a balanced market. Sure, when things are hot, homes move quickly and for high prices, and there’s a certain excitement to the industry. The downside shows up when a family I’m working with loses out on the property of their dreams because of a bidding war, or when a seller must scramble to find a new home after his current place sold quicker than expected. In slightly slower – but not slow – times, buyers can take a breath and really evaluate the home they’ll be paying for over the next 25 years, sellers can start shopping while their home’s on the market, and I get to eat dinner with my kids more often. Wins all around.

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As of May 1, CMHC – the Crown Corporation that insures homes purchased with less than a 20 percent down payment – will be raising its rates; a chart breaking down the new premiums is available here. This is a not-particularly surprising move, as the rising average home prices in Canada are increasing CMHC’s exposure to risk, which is not something an insurer likes to see happen.

And now a new announcement: self-employed workers without a means for third-party validation of their income will no longer be eligible for CMHC coverage.

While some first-time homebuyers, the group traditionally unable to come up with a 20 percent down-payment, may be discouraged by this news, it’s not at all a bad thing for the real estate market; indeed, it’s a step to help things stay healthy. As interest rates look to remain low for at least the next couple of years, it can be tempting for people to over-extend themselves financially with the hope that their property’s equity will grow fast enough to make the stretch worthwhile. CMHC’s job is to make sure mortgage lenders don’t end up on the hook for a bunch of homes their owners couldn’t actually afford, and it doesn’t have an endless pool of cash from which to draw to do this. Tightening up the rules a bit can help gently nudge potential homebuyers toward gaining a little more financial security prior to signing on the dotted line, which means a healthier market all around. Foreclosures aren’t good for anyone, and neither is CMHC having to drastically increase its premiums to cover a large amount of losses. Mild corrections like this one are just a way to keep people living relatively within their means, and I’m for it.

There’s something special about the couple of weeks immediately following New Year’s Day: the Christmas season is over, company has returned from whence they came, and your home is starting to look like it did last fall. Opportunity and renewal is in the air; anything is possible. As you tidy up the decorations you might find a few bits of maintenance that need doing, or improvements that can be made. Rather than overwhelming, though, this list is inspiring, because it’s a new year, baby!

The trick, then, is to capitalize on this newfound optimism and actually accomplish something. If you’re thinking about putting your home on the market this year – and judging by early indicators, this’ll be a great time to do so – make your New Year’s resolution to get your property market ready.

First and foremost, start decluttering your home. Haven’t used something in more than a year? Donate, sell, or toss it. Clear off the flat surfaces like desks and countertops, and resolve to keep them clear. Those who are really ambitious can use the ‘clean sweep’ method, taking absolutely everything out of a room, then only putting back those things that truly belong in that space; the rest has got to go.

Decluttering doesn’t have to mean getting rid of things, though: packing rarely-used but still useful things in preparation for your move will both improve the roominess of your home and save you some time later.

Next, really put some effort into identifying all the areas where your home could use some maintenance, and make a plan for how and when you’ll get it all done. Then start looking at inexpensive improvements you could make to freshen up the place: maybe get all the supplies you need to paint your main floor, and the next time a chinook hits crack open the windows and get to it.

Now’s also a useful time to do some research, both of the types of neighbourhoods in which you might like to live, and on Realtors in your area who might be a good fit for you. January’s not generally the busiest month for Realtors, so call a few up to go for coffee in an informal interview (I’m available). The right agent can make your selling – and buying – experience a lot easier.

So those are a few tips to get you started. And because I’m still in the giving mood, how would you like 2-for-1 tickets to the Calgary Home and Garden Show, taking place at the end of next month? Just click here, and make sure to use the promo code NEWYEAR.

City council has been debating what I expect will be a hot topic in upcoming civic elections: secondary suites, where they can be, and how easy they should be to add to the market. Mayor Nenshi was pushing for major revisions to laws around the suites, but the majority of council preferred small, incremental changes: secondary suites damaged in the flood that had been grandfathered in, for example, can be rebuilt without rezoning, for example, much to the relief of the overwhelmed rental market. And a pilot project has been launched to inspect secondary suites for safety and adherence to code, which should come as a relief to tenants looking at their single window and wondering if they could actually crawl out of it in a fire.

So, good stuff, if perhaps not particularly groundbreaking. With the sales market in Calgary as hot as it is, with prices up more than eleven percent over last year, though, there are bound to be more residents looking to rental properties as a stopgap until deposits can be saved up – and plenty of investors will want to be capitalizing on their property holdings by adding basement suites for additional income. Surely once debates begin in the aldermanic races, lines are going to be drawn showing where each candidate stands on increasing our city’s stock of secondary sites, and that could seriously affect outcomes in ridings popular with, say, university students. This is a topic to watch.

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.

Thanks to the busier than expected real estate market this year, CMHC – the government-backed outfit that offers insurance against mortgages when down payments of less than 20 percent are made – has already reached three-quarters of its cap for the year. The government had allowed for up to $85 billion in mortgage-backed securities to be issued in 2013, and we’ve already hit nearly $64 billion.

What does this mean? Well, the government will want to cool down the market a bit by implementing new rules that make it more difficult to qualify for a mortgage. Further, fixed rates on mortgages will likely be going up, with jumps of between 0.2 percent and 0.65 percent by the fall.

It’s going to become harder to be a pre-approved buyer, which means those who have pre-approval will become highly valued by sellers. Really, that’s one of the first things you should do if you’re entering the real estate market: get pre-approved, so you know what you’re working with and the seller knows you’re serious.

None of this is especially surprising or dire, but it’s well worth being aware of. As more develops, I’ll keep you posted