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Bob, those were great reasons you gave!  Nice to see a blogger with a sense of humour. Welcome back, man.

Just a wild guess but I bet the sales mix has something to do with the price increase. Every other stat looks terrible. Low sales, record inventory etc.

George;

Every other stat looks terrible? What did you think of the DOM? 50 in January, 40 in February.

What statistic would tell us about sales mix? I'd be happy to furnish that information if someone can tell me what the criteria is. I already do the "Over $1 Million Stats" and it's easy to see that it isn't the sales of these homes that drove the price up. Sales price/sq ft is up.

Bob

Hi Bob,

I've been a keen observer here for about a year. I thought that I would listen before speaking.

I have a more affordable property in Strathcona,a SxS between 350000.00 and 400000.00 that is rented to a very good tenant. On the one hand Don Campbell of REIN sees a 12% increase for Calgary this year and Eric Sprott, the smartest guy on Bay street, is bearish on Canadian real-estate. It's worth noting that Eric's predictions are amazingly accurate and his results prove it. Don Campbell, I don't follow enough to know. What do you think of Don Campbell?

Because prices in the city are high, how do you see my entry level property fairing in a flat to upward market? If I decided to sell, would March April be my best bet?

On another note, Eric Sprott is very bullish on the prospects for oil due to his belief in Peak Oil theory or peak commodities for that matter. On the gas side, a private gas services related company I've invested in has relayed to me that the gas turnaround is upon us with large companies like Encana signing contracts. For what it's worth, Sprott believes that commodities like oil, wheat, base metals and precious metals are moving higher because the world is awash in US dollars. With inflationary pressures mounting, countries like China are buying real assets, things they need, to get rid of their depreciating trillion US dollar reserves. This should provide a floor under oil and gas prices going forward.

Regarding discussions on the gas question, my gut is telling me that the royalty changes put out by Stelmach will be changed post election and will favour the gas business. He made the changes to get re-elected but will need to reverse his stance because the Grand Prairies are suffering.

I thought for my first comment, I would ask some questions and also share a bit of what I've been researching for the last several years. For those of you who do some investing outside of real-estate, a visit to Sprott.com to view Eric's past and present comments might be of interest to you. His predictions, both past and present are amazing and are worth a look.

Fisherman;

I can tell you that homes in Strathcona are selling faster than the overall average; 30 days compared to 40 for the city. There is very little in that price range, which should make it attractive at any time of the year. There are many other factors; you'd have to be larger and/or in better condition than the single family homes that are in the same price range. Location is a big consideration.

I don't know much about Don Campbell. I think it boils down to whether you think the long-term prospects for Alberta are good or poor. We could spend a lot of time on that one.

Bob

Yay the blog is back and I can comment again without getting beat down every time I say something remotely bullish.

That being said I am not impressed by the numbers.  The last two days of Feb saw very high avg prices (see Mike Fotiou's site).  Who knows what the reason for this could be, but it came just in time to bring avg prices for Feb stats significantly up.  Not saying it was funny business, just luck that's all.  No doubt we will see a huge headline "AVG HOME PRICES ROCKET BACK: Calgary homes still desirable" in the Herald.

The 36% sales decrease with an increase in avg prices can only mean one thing:  Higher end homes that used to go for 700,000 ish are going for lower and being snatched up by those families with the capital to stomach 500-600k homes.  The lower end (more mainstream) homes are not selling as well thus accounting for the increase with inventory/decrease in sales.  I know of two families who bought in Feb and I congratulate them as they got what seems like  a great deal (one got 60K off the original listing price months ago!).  They were both higher end neighborhoods in the SW.

Bob,

I don't follow the DOM number as I believe it's not accurate - doesn't capture the many listings that have been cancelled/ended and then put back on the market. I believe the number is skewed.

George; There was a higher percentage of re-lists, on sales, in January than in February. You're correct, the number is skewed, but exactly the opposite to what you are saying.The drop in DOM would actually be larger than 10 days.-Bob

A suggestion to better track the sales mix would be to adjust your "over $1 million" sales to "over $750k". I believe it would be more accurate and many tell more about the sales mix. Another possible way would be to track sales price as it relates to square footage - don't know if this is possible.

George; I regularly post the sales price/sq ft on my "what's new" page. You can see it every day on Mike's stats. Or have I misunderstood what you are asking?

I'll do an "Over $750" when I get a chance -Bob

Fisherman,

All you have to ask yourself is what business is Don Campbell in? Just like CMHC - you'll never hear either of them saying prices will fall. I believe Erik's opinion to be a more unbiased. And like you say his track record speaks for itself.

Sold a Calgary condo in December and most of our competition is still for sale now.  There is so much condo product in our old neighborhood with dozens of options all within a block or two. Someone explain how prices can possibly rise. Our price certainly wasn't rising!! The majority of these sales(especially the new buildings) are flippers who figured Calgary was brimming with power couples with no kids.  If money stops pumping into the bottom end, there is no equity.  Equity is someone else's future debt. It has no real value. Look at the US, wasn't that all "equity" money people were spending? Looks like there's no one left to feed $$$ into the bottom. Same thing is happening here.  Not a bull or bear, just facts.

Bob, is there a way for you to list of the price range for the inventory:

For example:

Price Range         Number of Houses on the Market

$200 -300,000        200

$300- 400,000        5000

..

...

I think that will give us a good idea of where the actions is. My take is that most buyers have been waiting for prices to drop (almost like a self-fullfilling theory) and actually prices have been dropping until end of December. I do not want to make another prediction but I think in the next 30-60 days you'll see more offers since prices are slowly moving upward again and people just do not want to miss the best window of opportunity.

Vinnie;

Here's the stats. Inventory by price range. It's impossible to go back and get inventory from the MLS data base, so we'll have to officially start this today.

Bob

Bob:

Regarding sales mix and how to represent it.  The easiest way to do so would be to take the sale prices of all properties for a given time period (month, quarter, year etc) and plot them on a scatter graph vs time.

Should just be a matter of cutting and pasting assuming that you get a report with this info at month end.

Jacob

Jacob;

I don't acually get a report, but give me some time and I'll see if we can do something.

Bob

Bob, inventory average/ median price may be a good indicator to show the seller's confidence. A lot of people argue that the mix of the average/median sale's price maybe different eventhough the price are going up. But with inventory average price available, it will be hard to say that a same 2000 sqft house is selling lower, yet only the biger house consists more of the mix, so the price increased.

I believe the inventory average price is a much better indicator than inventory percentage.

Thanks

I've never met Don Campbell, but my brother has.  I've read a lot of his wrightings, and in my opion, he's pretty sharp on the national level.  I think he knows what's happening in Alberta, and in Canada, and certainly on the national and international level.

When he speaks, I listen.  I don't bow down to him, but I sure listen to him.  He's a serious guy to listen to.

As are all of you who participate on this blogsite.

Al

Re: Item #3 in your answer to Confused

I think buyers know about it. They just aren't listening to it. People don't buy into the "sky is falling" scare tactic. Hearing month after month of imminent collapse, it wears thin.

Well, it looks like I privately sold our home to a developer. They said it's a "guaranteed sale", but I won't know till tomorrow.

Now I'm looking at buying another home... Opinions? Should I be going up in mortgage and get that $1m+ special inner-city location home or "play it safe" and buy that $500k inner-city, nothing special one?

Not sure if I want to drop $1m in any suburb, but I'd look at it.

Mike