Calgary, February 1, 2012 – Home sales in the City of Calgary are off to a slow start as buyers show continuing caution, according to figures released today by CREB®.

“Overall, the market is behaving as expected for the winter season,” says Bob Jablonski, president of CREB®.

The year-over-year volume of residential sales in the City of Calgary dropped, but the inventory of available homes declined even faster in January 2012.

The City of Calgary residential market recorded 1,078 sales in January, nearly one per cent below the same month in 2011. This is in part related to the drop in new listings, which declined by 8 per cent over January 2011, causing inventory levels to continue to contract over 2011.

“A lower number of sales is not uncommon for the month of January,” says Jablonski. “The number of sales is offset by the number of listings, ultimately pushing the housing market towards a balanced market territory.”

The single-family market recorded a one-per-cent drop in sales over last year levels, while the condominium market recorded a one-per-cent gain.  However, the decline in new listings in the single-family market was much higher than the condominium market, with a year-over-year decline of 11 per cent and 6 per cent, respectively. 

“As presented in our housing forecast report, a slow start to the year is anticipated, as consumers continue to be cautiously optimistic regarding purchasing and/or listing their home,” says Jablonski.

The average price of single-family homes in January 2012 was $438,683, a 3-per-cent drop over last year, and over December 2011.  Meanwhile, median prices in the single-family market remain relatively stable over last month at $395,000, while posting a 1-per-cent gain over the previous year. 

“The price changes are related to the composition of what was sold.  The rise in the median price was likely due to the increase in the number of homes sold in the $450,000-$549,999 category, as this category recorded a significant jump in activity in January.  The decline in average price is due to the rise in sales in the under-$300,000 category, as well as the decline in the number of homes sold in the upper-price ranges,” Jablonski explains. 

The condominium market continues to favor the buyer; however, this market is trending towards balance.  The average and median price of condominiums for the month of January 2012 were $268,526 and $245,000, respectively.  This corresponds to a 7-per-cent decline in average prices and a 4-per-cent decline in median prices.

“Last January, there was a significant jump in sales in both the $600,000+ price range and the under-$200,000 price range in condominiums.   For January 2012, while sales under $200,000 remain strong, there has been an increase in activity in the $200,000-$299,999 price range, mostly at the expense of the condominiums priced above $400,000. This explains the significant decline in condominium prices,” Jablonski concludes.

Please note! CREB® will change the way it reports statistics with the February 6 release of the first MLS® Home Price Index (HPI). The HPI, years in development, provides a more accurate picture of the real estate market and how prices are affected by market factors. Average and median prices often misrepresent true price trends because they are affected by factors such as the change in the mix of homes sold, and the number of sales in different price categories. 

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Meanwhile, other centres outside the city limits had one of the highest vacancy rates at 3.6 per cent.

For all bedroom types, the vacancy rate in 2011 declined from the previous year. Vacancies in October ranged from 1.8 per cent for one bedroom units to 3.3 per cent for units with three or more bedrooms.

Despite the reduction in vacancies, the average rent in Calgary remained relatively stable.

These two zones also had among the lowest average two-bedroom rent in the October 2010 survey.

The average condo rent in CMHC's October survey was $1,378 per month, up from $1,355 in 2010.

In the other secondary rental market, the number of renter households reached 54,878 in October compared to 53,312 in the same month in 2010.

Tim Logel, president and partner of Cardel Lifestyles in Calgary, said there was a pent-up demand of buyers in the local market at the end of the year and more buyers are now coming forward.

Multi-family permits over the past five years have reached 850 for the local builder, tops in the city.

In the existing home sales market, the TD Economics report forecasts sales to increase by 0.5 per cent in Alberta in 2012 to 53,300 transactions and then dip by 2.7 per cent in 2013 to 51,900.

This after a 6.6 per cent hike in sales in 2011 to 53,000 transactions.

TD Economics forecasts the average existing home price to remain unchanged in Alberta in 2012 at $355,900 after increasing by 1.1 per cent in 2011 to $356,100. But the average is expected to fall by 2.5 per cent in 2013 to $347,200.

Across Canada, the report said the average existing home price would fall by 1.9 per cent in 2012 to $357,100 and decline by 3.6 per cent in 2013 to $344,200. In 2011, it rose by 7.5 per cent to $364,100.

“People are being heavily compelled to lock in,” says Doug Porter, deputy chief economist with the Bank of Montreal, in talking about the negligible spread between short and long-term money. Will Dunning, an economist CAAMP, said his group was not surveying consumers the last time short-term rates climbed like this so he can’t be sure what the reaction will be this time around.

While Benjamin Tal, deputy chief economist with CIBC World Markets, doesn’t think variable rates premiums will rise above prime, the drop in the discount we’ve seen in the last few months could impact on the housing market.

Calgary Housing Sales Trending Up

Stable Pricing Providing Opportunities for Buyers

Calgary, December 1, 2011 – According to figures released today by CREB® (Calgary Real Estate Board), Calgary residential sales in November increased eight per cent over last year, at 17,538 after the first 11 months of the year. 

While sales activity tends to taper off in the winter months, so far this year Calgary area sales remain significantly stronger than levels recorded last year. Single family home sales totaled 962 for the month, an increase of eight per cent from November 2010. Meanwhile, year-to-date sales totaled 12,464, a 10 per cent increase over last year. Over the long term, however, sales remained a tepid 17 per cent below the 10 year average. 

“Despite any global economic cautions, consumers are actively seeking well priced listings in the market, a reflection of their positive long term outlook for the city,” says Sano Stante, president of CREB®. “Following two years of employment losses, the current growth in jobs is translating into improvements in the housing sector and a more optimistic consumer.”

November listings have edged down over last year’s levels, decreasing by two per cent. Lower listings combined with the increase in sales helped reduce the months of inventory to less than four months. 

The year-to-date average and median price of single family homes were a respective $467,140 and $406,500. Overall, prices remain relatively flat compared to last year. 

“This stable pricing provides an opportunity for buyers in our market. The addition of historically low interest rates, combined with a good selection of inventory, makes it a trifecta,” Stante says. “With positive wage growth in the wind, this is a signal, and a reminder, that this market opportunity will not remain forever.”

Condominium sales for the first 11 months of the year totaled 5,074, a five per cent rise over the same period last year. Inventory levels declined to 1,676 units, helping push down the months of supply. 

“The rise in condominium sales can be attributed to the confidence in the market, and is typical of this phase of a normal market recovery,” says Stante.

Condominium year-to-date average and median prices in 2011 were $287,545 and $261,500, respectively, a decline over the first 11 months of 2010, mostly due to increased sales in units priced under $200,000. 

The reason is a growing economy that is quickly adding jobs, leading to population growth.

Most other provinces will see a double-digit drop in starts, with only Manitoba seeing a more moderate drop of 5.3% next year.

Alberta will see housing starts in 2012 increase to 27,800 units from the 24,881 this year. In 2010, there were 27,088 housing starts in the province.

Nationally, housing starts will drop 5.4% from 192,000 units this year to 181,600 units in 2012. There were 189,930 starts in 2010.

"With interest rates no longer expected to increase over the next year, home buying intentions have improved modestly,” said the Altus Group in its forecast. “However, deteriorating economic conditions internationally are affecting the outlook for Canada’s economy and leading to lower forecasts of GDP growth in 2012, which will act as a constraint to housing demand.”

Peter Norman, chief economist for Altus Group, said the declines were not overly concerning, however.

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It also forecast Calgary’s economic growth rate to average 4.1 per cent between 2012-2015.

"Canadians believe in the long-term benefits of owning a home, including the value it can provide, both personally and as a long-term investment," said Marcia Moffat, RBC's head of home-equity financing.

However, in the Calgary census metropolitan area, the unemployment rate rose to 6.3 per cent in February from 6.0 per cent in January as 4,400 new jobs were created in the month. From February 2010 to February 2011, employment in the Calgary CMA has increased by only 1,400 jobs.

"With a few more months of even reasonably strong growth, we will definitely be back to record levels of employment in the province and that's what we've been expecting to see in 2011."

Elsbeth Mehrer, director of research, workforce and strategy at Calgary Economic Development, said the jobless rate in Calgary rose in February because the labour force number is growing. According to Statistics Canada, the labour force in the Calgary region grew by 6,200 people on a monthly basis.

Nationally, employment edged up in February by 15,100, bringing total gains over the past three months to 115,000. The unemployment rate remained unchanged at 7.8 per cent. The federal agency said that over the past 12 months, employment has risen by 1.9 per cent (321,700).

"Compared with February 2010, when Alberta was near its employment-low following the labour market downturn, employment has grown by 3.4 per cent, well above the national rate of 1.9 per cent," the federal agency said.

mtoneguzzi@calgaryherald.com

In his Canadian Housing Outlook 2011, Sal Guatieri said the price growth in the province could result in response to "solid economic growth, high oil prices and in-migration."

"The ratio of average resale prices to personal incomes is currently 14 per cent above its long-run mean, suggesting the national market is moderately overvalued. That's up modestly from the summer but still well below the 21 per cent all-time high in 1989 or the 26 per cent U.S. peak in 2005."

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The report examined the ratio between sales and new listings — a rough metric of gauging supply. Increased supply tends to lead to lower prices, and vice versa. Regina saw the highest price increases in the country between January 2000 and December 2010. Average price increases there had an annually compounded rate of return of 9.56 per cent. London-St. Thomas, Ont. saw the lowest increases at 4.82 per cent.

"There’s no question that price growth has been solid over the past decade, but history tells us that exceptional growth supported by sound fundamentals is healthy," the report said.  "Concern is only raised when the underpinnings are insufficient to justify the trajectory. By all accounts, Canada’s real estate market measures up to conventional wisdom and the faith in homeownership has not been misplaced."

Our International Trade Minister Peter Van Loan is on a tour to Promote our awesome Country. Sounds GREAT to me: See this Financial Post Story

Come to Canada!: Van Loan

Peter Van Loan says dispelling long-held myths about Canada is a top priority as the country seeks to capitalize on its newfound economic might and low corporate taxes to woo investors north.

“In the ’70s, Canada was a country of big government, big social programs, big debt and high taxes,” Mr. Van Loan said. Free trade “exposed Canadians to competition...and significant tax reforms followed.”

“Canada is open for business,” said Mr. Van Loan, who using his private-sector skills as a deal negotiator to encourage investment as he meets with potential investors. “We want investment. We’ve put together a package that makes [the country] an ideal place to invest and do business.”

Financial Post