Bob Truman, First Place Realty

Congrats on five great years Bob.  Keep up the good work!  There's nothing wrong with a little "self-admiration" now and then.  You provide a unique service that you ought to be proud of.    

has it been 5 years already?  wow.  felt like this just all started yesterday.  between all the googling and talks with my friends.  this and findcalgary.ca are the only two sites we know of and frequent.  and findcalgary really gain popularity from you sending us that way back then.  You're even getting some recognition finally from Garth!  Keep up the great work.  

Congratulations, Bob!  You definitely were the innovator of real estate transparency for the Calgary (and Edmonton!) market and still provide the most relevant and informative statistics out there.

Without you getting things started, everyone would still be waiting until Monday afternoon to see April's month-end stats ;)

Congrats Bob, your blog was also the first I found to offer transparent discussion on Calgary real estate.

I see Calgary has just surpassed the 5,000 mark for SFH inventory.  Any thoughts on whether or not we'll hit 6,000 in May ? (Last witnessed in July of '08)

6000? How can I put this without being held to account ...(yes) -Bob

Agreed - congratulations Bob.  It's great to have access to some timely, meaningful statistics.

I first arrived here searching for a sign that precedes drops in housing prices in Calgary.  There was always talk about high inventories, absorption rates and sales/listings ratios, but it seemed like prices could rise or fall any given month no matter where any of these stats were.  I was looking for a more definite sign - or an explanation for why we could see months with high inventories, low sales, low sales/listings ratios and high absorption rates and still have rising prices (February 09 springs to mind).

By browsing your site, I saw that each of the recent multi-month periods where avg and median prices were dropping (Oct-Dec 06, Aug-Dec 07, Jun 08-Jan 09 and Dec 09-Jan 10) were all preceded by an increasing 30-Day DOM.  Relative values do not seem to matter, but the change in DOM - being positive or negative - does seem to matter.

Each of these price drops also ended when this trend reversed itself.  Even though the rise was only from 43-38 days in 06, 51-50 days in 07 and 62-51 in 09.  Hence, I found my explanation for February 09 (and a few other similar months).

Who knows if this stat will hold up over time, but if someone had used this stat to determine when to sell recently, it looks like they would have managed to hit the peak.  I guess only time will tell if the next fall in DOM is the perfect time to buy.

Regardless, following the 30 Day DOM wouldn't have been possible without this site.  The analysis above also couldn't have been done in less than 30 minutes with an excel spreadsheet if the data wasn't so easy to view.

Now, I guess I'll get back to watching the DOM rise (and average prices fall).

Mabus

I believe certain types of dwellings in certain areas will hold value (as they always do). Cost of custom construction has actually gone up from last year (in most cases its the material). However, it will be interesting to see how the typical "big builder" setup performs. A lot of listings in new communities right across Calgary.

Interesting observation Mabus.  You would think that a rising DOM would be closely correlated with a higher absorption rate but that's definitely a stat to watch, thanks for sharing that.

Wow 5 years. Cogratulations from a reader who observes from the sideline.Enjoy your blog and it makes for good conversation on where the market is heading at business lunches. Keep up the great job.

Looking at SFH seasonally adjusted data, prices were way down (about $13000) from where they should usually be between March and April. I'd say the declining price trend is underway. We've probably hit the peak price for this year already but are headed for a slow decline to a plateau

Mabus the change in Sales:New Listings ratio is consistently the best leading indicator - it predicts price changes 2 or 3 months out and if you look back to times when that stat swung the most on a seasonally-adjusted basis it was late winter of 2009 and May of 2007. It swung too far down in January 2010 than it usually would hence the price changes now. Since then it's been pretty much where it should be, predicting a slowly declining market over the next few months I think.

The seasonally adjusted DOM seems to be coincident with price changes and not predictive. That makes sense since people drop their asking prices the longer their house is on the market.

As for what factors "lead" the sales:new listings data, I would guess low or declining interest rates and year-on-year income gains. Incomes are still increasing slowly in Alberta and I'd say the future outlook is improving given commodity prices and oil and gas activity. The cost of deep water drilling just shot up and when that happens, it drags the price of oil with it.

About the "unexpected" low rates:

I disagree that noone predicted low interest rates in January 2009. They were already at historic lows then.

Permabears (like Garth and many on this site) will usually focus on whichever factor is negative and thats why they ignored low rates last year and are all excited about them now, Bob. Last year the increase in unemployment was all the rage.

It's also worth mentioning that even with these slight increases recently, rates are still relatively low. US bond rates have actually declined in the last month or so, suggesting potentially lower fixed rates in the future. We went through this last fall when fixed rates went up and came down again.

I'm still thinking that many listings out there are people trying to move up the market while the rates are low and more likely to pull their listings when rates go up later this year. The "vacant listing" factor is still low as Mike F blogged last week.

CM how are your rental stats looking?

"CM how are your rental stats looking?"

Good timing, there hasn't been too much in the way of excitement other than the big inventory drop back in the early part of 2010.

But just this week the median rental price for SFH was teetering close to a $50 increase, and the median just hit $1650 today.

2 bedroom apartments haven't really changed one way or the other since October.

Here are the overall stats...

2 Bedroom Apt (median)

-------------

[2010]

05: $1098

04: $1095

03: $1095

[2009]

12 - $1099

11 - $1099

10 - $1100

09 - $1150

08 - $1150

07 - $1200

Calgary SFH (median)

-----------

[2010]

05: $1650

04: $1600

03: $1600

[2009]

12: $1550

11: $1600  

10: $1600  

09: $1600

08: $1600  

07: $1650

Price/Rent ratio is currently 253.

Overall, inventory for SFH rentals is still way down from where it was in 2009.  Nearly 30% by my estimate.

Bob can you tell me how sales prices are comparing to city assessments? Is the discrepancy between the two quite uniform(ie are most sales prices 5 - 10% higher than assessments?) or is it all over the place?

@Qualifier: As Bob shows, city assessments are pretty much useless when it comes to market values.  Even on a relative basis.

If you use a larger data set though, maybe you can draw some more meaningful conclusions.

The median assessed value of a single-family home on the last assessment issued by the city of Calgary was $374,000.

The median value of homes sold in all of April was $417,000.

So I guess if you wanted to make some sort of rule of thumb, it would be that the city assessments are around 10% lower than market value.  But using those assessments to assess an individual property would be as...inine.