Immediate possession
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My associates, Kendall Curle and Veronica Palin have just listed this home in Sunnyside. It's rare to find a single family home of this size(1238 sq ft) in this community for less than $500,000:
"Enjoy the friendly, small-town ambience of Sunnyside in the heart of the inner city. The delightful restaurants, coffee shops and boutiques of Kensington are two minutes from your new home. Within a few steps of your front door, you can be on the train to downtown, or better yet, walk to work. You’ll also have quick access to the Bow River pathway where you can stroll along the river or ride your bike. Dog-lovers will enjoy the nearby off-leash area. This well-located home with upgraded kitchen and bathrooms has plenty of space for a professional couple or small family. The beautiful south back yard has mature landscaping, garden, deck, and is fenced. The newer double garage could be rented if you don't have a car. Welcome home to inner city living at its best!"
* 1238 sq ft
* 4-level split
Property information
For the past three years, we've reached our peak average price for the calendar year as follows:
2008: May(followed by a decline of 9%)
2007: July( " " 6%)
2006: June(" " 2%)
On June 4, we reached our peak average price for 2009 at $443,982. Will that be it for this year? If not, when?
The median price seems to have hit a plateau at $390,000. It's been there for about three weeks.
The one big difference this year is inventory. This year it's dropping, whereas in 2006-2007, it was increasing. In 2008, it started dropping in June, but it was almost double what we have this year.
I hope that inventory starts to increase for a couple reasons:
1. I have clients who have sold their homes and can't find anything worth buying right now.
2. Prices have to stabilize or go down if the market is to remain healthy. With higher interest rates on their way, the sales will dry up if prices continue to rise. Higher inventory will put some downward presure on prices and keep the wheels turning.
Other factors this year are increasing unemployment and increasing interest rates(albeit still low). For sellers, is the window of opportunity going to disappear soon?
The May numbers are in the books(see below). Everyone underestimated the activity and the price increases this spring. The low interest rates along with prices which started out the year 10% lower than last year, has resulted in a price increase and a sales volume increase.
It was mentioned a number of times late last year that there were buyers lurking, but no one seemed ready to take the plunge. May was the month where they returned with a vengeance. We heard that the end of 0 down/40-year mortgages would put an end to the first-time buyers. Who is buying all these homes priced under $400,000?(Sales up 46% in May)
I've told every one of my buyers that I expected prices to go down this year. A young couple who bought in Scenic Acres back in February are very happy they didn't listen to me. Since they purchased their house, the median price in Calgary has gone up $15,000(or 4%). Even more importantly, the selection of homes has rapidly shrunk and deteriorated.
There was a 171 day supply of homes in Feb in Scenic Acres, today there is a 40 day supply. They bought when prices were down, selection was excellent, and they still had lots of negotiating power. They got the house with all the features they wanted.
This scenario was repeated numerous times with buyers earlier this spring, but not anymore. Inventory is approaching the danger zone now that it's under 4,000. There's not a lot of quality product available, and when an attractive listing comes on the market, it sells fast.
For the buyers who haven't yet bought, I'm still saying selection is going to get better, and the summer will bring lower prices. Will the next three months prove me correct, or will I have a lot of irate buyers who waited too long?
May 2009 stats summary:
The median price of single family homes(SFH) at $390,000 is up $10,000 or 2.6% from Apr. It's down 6.9% from May 2008 when it was $419,000.
The SFH average price at $436,427 is up $10,116 or 2.4% compared to Apr. It's down 9.0% from May 2008 when it was $479,564.
SFH sales price per sq ft at $279 was up $7, or 2.6% compared to Apr.
Sales of single family homes were up 16% compared to May 2008.
SFH Inventory on May 31 was 3860, which is 46% lower than last year.
New listings at 2236 were down 35% compared to last year.
The absorption rate of 2.4 means that we have a 2.4 month supply of homes on the market. Last year, there was a 5.2 month supply. For homes under $400,000, there is a 1.6 month supply. You can see the absorption rate by price range here.
Days on Market(DOM) decreased from 52 in Apr to 46 in May. Last year, it was 42.
36 homes sold for $1 million or more. Last year, there were 49.
Price reductions are down 63% compared to last year. We've averaged 57 price reductions per day over the past week. Last year was 153. 29% of the homes listed in May already have a sale or a conditional sale. Last year, it was 13%.
The median price of condos at $255,000 is up $4,000 or 1.6% from Apr.
The median price of condos is down 10.5% compared to last year.
Condo sales at 653 were up 13% compared to May 2008.
The previous topic and analysis gave one person's opinion. Here's another side of the coin, this time from Garth Turner(posted on his blog yesterday):
*The current real estate buzz will destroy the wealth of those now buying, especially in multi-offer situations.
* Current first-time buyers will face a double threat of rising mortgage rates and collapsing values over the next two to five years. They will truly wonder why they took such a gamble and how helicopter parents, friends and ‘experts’ could have been so wrong.
* In two years there will be virtually no move-up buyers. High-end houses will be nailed. Bye-bye Leaside.
* Houses in Canada are essentially over-valued and will correct sharply. Given our foundation of debt, the bottomless pit of US property values, unemployment, stagnant incomes and deteriorating national finances, the lunacy of paying current prices will soon be apparent.
* And as all of the above comes together in the next dozen or two months, supply will swamp demand.
http://www.greaterfool.ca/2009/05/26/the-greatest-fools/#comments
Thanks to blogger Worldclass for the following:
I've posted a few times on the bubble blog about a hyperinflation scenario and why owning a hard asset (like a house, gold, or commodity stocks) is a good idea at this uncertain time. As the governments of the world try to inflate their way out of a recession (be it right or wrong to do so), citizens who hold paper money will continue to see a devaluation of their savings. The current policies favour investment and debtors, NOT savers.
I think that the combination of super low interest rates and the magnitude of the drop from the peak, coupled with the fact that Calgary's economy can turn on a dime to the upside if commodity prices skyrocket again - means that people who NEED to buy (ie: don't have a home, want to get out of renting) have to seriously look at purchasing a home if they want to set up roots in Calgary. Let me also say that I am not yet advocating investment in real estate just yet. I am only saying that given the very real possibility of such a inflationary scenario, people who have ZERO hard assets and are just sitting in cash and renting are going to get the pain handed to them. At least if you don't believe in real estate, then put some of your money to work instead of just sitting in paper money. For the average Joe with limited money, putting that money into something that puts a roof over your head just so happens to be the best option rather than gold, oil stocks, etc.
In fall-end of 2006 I had said that those who invested in second properties in Calgary should seriously look at taking their profits and putting their homes up for sale. Sure I was early and they could have made an extra 30-50k on average. But better too early and take profits, than too late and get caught up in the post-peak market (like so many have). Now I am officially saying that 2009-2010 is THE time to buy if you NEED a home. However, be ready to see your home's value drop a bit more. What you won't be able to stomach is if you are still renting and waiting in cash, then the hyperinflationary scenario takes hold and you are left up the creek without a paddle. It is all about risk-management and scenario planning.
I've gotten opinions and ideas from bloggers on the bubble-blog. Now, just wondering what people here think.
I hope everyone is enjoying the holiday weekend. I've been busier than I expected to be this spring. So busy, I haven't even been out to the mountains for that first hike. My winter of skiing seems like a distant memory, but hey, only six months to go! Thankfully, my work is enjoyment enough!
How long are they REALLY taking to sell?
Most homes are selling much quicker than the perfunctory CREB stats will indicate. As we've discovered with prices, the median paints a truer and more revealing picture.
Average cumulative days on the market(CDOM) for sales in the past 3 days is 58. That counts all the days which a property was previously listed under a different MLS number. Of those sales, 21 were on the market for more than 100 days(eg; 713, 654, 624, 476, etc) which really skews the average. The median CDOM is only 25.
Looking only at homes which have been listed this year, for homes sold in the past 3 days,
The median CDOM is 21.
Personally, for the 5 transactions I've been involved with since May 1, the average days on the market was 11. That includes two homes which were not even on MLS, and I'm counting as a CDOM of 1.
That brings me to the next topic...
There are more sales than reported
In response to my plea "Homes Wanted Now," I'm pleased to report that two buyers found their dream home, and it wasn't even on MLS. How often does this happen? How many sales are not even reported on MLS? I'm only one of 5400 realtors.
If your realtor isn't out there beating the bushes for you, you're not likely to find the home you want right now. There are 4100 active SFH listings, but I would consider half of them to be "un-sellable" at their present price.
I am an ardent proponent of the MLS system as the preferred method of buying or selling at the best price, but there is a large hidden market out there:
Many sellers don’t want their home on MLS
Surprisingly, a lot of sellers don't want their home on MLS for a variety of reasons. Mostly, it's the inconvenience of prepping the house for showings, then leaving the home for at least an hour, especially if you have pets or kids. Another reason is the privacy. Many people prefer that the neighbours don't know.
For buyers, it's a real benefit when you can negotiate without the pressure of other buyers standing in the doorway.
Get a home inspection!
In addition to the two non-MLS transactions this past week, there would have been a third, except the deal fell through after the home inspection.
If you are a buyer, and can't find what you're looking for, give me a call or send me an email, and I'll be happy to post a "Home Wanted" for you. As well, if you are not yet set up with an Auto Notification for new MLS listings, I'll set it up for you. You'll be notified at the same time as the realtors of any new listings. bobtruman@shaw.ca
Ditto if you have a home for sale, but don't want it on MLS. My number is 403-650-2514, and I answer the phone myself. No answering service to contend with.
We need more listings. Now.
If you have a house which you're thinking of selling, this is the best market we've seen for a long time. Especially if it's in a decent location and priced under $500,000.
I have a line-up of buyers waiting for the right house to come along. We've exhausted the inventory which is out there. I can't imagine I'm the only realtor in such a situation. It's getting more difficult to find good product. When an attractive listing comes along, it sells fast. It happened again this weekend where a house was listed on Friday and was sold before my buyers even had a chance to look at it.
You may have seen my list Urgently Required
Call me if you have a home that would meet the criteria of my buyers. 403-650-2514. bobtruman@shaw.ca
Not since July 2007 have we experienced balanced market conditions in Calgary. A 1.8 - 3.5 month supply of homes on the market is considered a balanced market, favouring neither the buyer nor seller, and we crossed over into that territory in April. There is a 3.2 month supply of single family homes for sale.
The overall number doesn't paint a true picture of what's really happening, however. For homes priced under $400,000, we are approaching seller's market conditions with a 2.1 month supply. For homes priced above $600,000 it is still firmly in a buyer's market with a 7.6 month supply, and many of those listings continue to languish. You can see the absorption rate by price range here.
April 2009 stats summary:
The median price of single family homes(SFH) at $380,000 is up $5,000 or 1.3% from Mar. It's down 9.5% from Apr 2008 when it was $420,000.
The SFH average price at $426,311 is up $5,958 or 1.4% compared to Mar. It's down 10.2% from Apr 2008 when it was $474,564.
SFH sales price per sq ft at $272 was down $1, or .4% compared to Mar.
Sales of single family homes were down 5% compared to Apr 2008. Year-to-date sales are down 26%. Compared to historic levels since 2001, sales were down 25% in April.
SFH Inventory on Apr 30 was 4130, which is 40% lower than last year.
New listings at 2011 were down 40% compared to last year. Compared to historic levels, listings are down 20%.
The absorption rate of 3.2 means that we have a 3.2 month supply of homes on the market. This is considered a balanced market, favouring neither the buyer or seller. Last year, there was a 5.1 month supply. For homes under $400,000, there is a 2.1 month supply. You can see the absorption rate by price range here.
Days on Market(DOM) increased from 48 in Mar to 52 in Apr. Last year, it was 40.
23 homes sold for $1 million or more. Last year, there were 42.
Price reductions are down 61% compared to last year. We've averaged 65 price reductions per day over the past week. Last year was 166.
20% of the homes listed in April already have a sale or a conditional sale. Last year, it was 14%.
The median price of condos at $251,000 is down $9,000 or 3.5% from Mar. It's down 13.5% compared to last year.
Sales price per sq ft for condos at $274 went up $1 compared to Mar.
Condo sales at 579 were almost the same as last year in April when there were 581.
There is a 3.5 month supply of condos on the market. Last month had a 5 month supply.
Could it still happen?
The gloom and doom last fall was pervasive. On Nov 3, 2008, a blogger named Diabolo predicted the following for 2009:
“Major crash will occur in May 2009 when the expected pick up in the sales doesn't happen."
He also said SFH prices would be down 25% by October, and condos would be down 30%. That would mean an Oct 2009 median price of:
Single family homes $292,500 (today it's at $382,000, down 2% since Oct 2008)
Condos $187,600 (Today it's at $251,000, down 6% since Oct 2008)
Sales compared to historic numbers are low: April SFH sales will be 27% lower than the average for the years 2001 - 2008. Does that fit with Diabolo's forecast that a "pick up" in sales isn't happening?
Although down from last year, sales seem to be getting better:
Jan 49% lower than 2008
Feb 34% " "
Mar 23% " "
Apr 7% " "
Right now sales are just bad. In Jan, they were pathetic.
Is the housing market playing out according to Diabolo's plan, or will it be less dramatic?
What about the inventory which should be ballooning, but will actually shrink in April?
Back on March 18, I posted: "How quickly will this listing sell?"
Here are some of the comments and predictions:
CM said: “I think if you were to list at $400k, it would sell for $380k quite quickly."
Van said: “It should sell within the average time that homes are on the market, if not sooner.”
Karl said: “The property will sell within 40 days between $415,000-$420,000.”
Kathy said: “My guess would be 45 days for about 398,000.”
Optimistic One said: “No more than 380K”
Karl had it pegged pretty close. The selling price was $414,000. Thanks to everyone who was brave enough to make a prediction!
We did not have to reduce the price or re-list. That's quite a feat when you consder that 60% of sales have had at least one price reduction. There were a total of 22 showings.
Over the past 30 days, the average Cumulative Days on the Market(CDOM) is 73.
CDOM includes days on the market when a listing was under a different MLS number.
Needless to say, the sellers are thrilled with the results. If you want realistic pricing for your home and the best exposure, give me a call.
Nobody expected this
A sale of $19,000 over list price? This is just another in a long list of surprises this year. A few other notable occurrences that most of us weren't expecting:
New listings of SFH down by 46% this month. The popular consensus was for a huge number of new listings this spring.
SFH Inventory down 27%.
After starting the year with Jan SFH sales down 49%, sales have picked up considerably and March sales were down 23% compared to last year. April sales are down 12%.
Condo sales were down 50% in Jan, but are down 4% for April.
Last year, the absorption rate in April was 5.1. This year it's at 3.7 and dropping. The supply of homes for sale is considerably lower than it was last year.
Most surprising of all, condo median price went up $6,000 since Dec.
I never dreamed I'd be involved in a multiple-offer situation this year, but it occurred last weekend.
By the way, 3 condo sales were at list price or higher yesterday.
40% of yesterday's "new" listings were actually re-lists. Listings which had expired and are now back on the market.
For the spring, we are updating the Single Family Home Statistics and the Condo Statistics every day. Ours are based on the past 30 days, so it gives you a different perspective than Mike's month-to-date stats. For example, today Mike's stats would cover April 1 - 14, whereas ours will include March 16 - April 14. Neither is better, just different.
The 30-day numbers show very little change in prices since March 31. The absorption rate continues to go down, and the inventory is not growing as we would have expected in the spring.
After 14 days in April, SFH new listings down by 50% compared to last year. Condos are down 44%. The popular consensus in December was for a huge number of new listings this spring, which could still be coming, of course. I have plenty of buyers who would welcome a better selection.
Inventory for both SFH and condos is down 32%.
After starting the year down 49% in Jan, SFH sales have picked up considerably. March sales were down 23% compared to last year. Along with most people, I was expecting the 49% drop to continue throughout the year. SFH sales for the first 14 days of April are down 14%.
Condo sales were down 50% in Jan, but are only down 13% for April.
Last year, the absorption rate was trending higher. This year it's dropping. That means we have about a 4-month supply of homes which is still considered a buyers market. For homes under $400,000, it's a balanced market with a 2.4 month supply.
Pending sales volume is higher than it was last year at this time. Condo pendings are at 213 today, last year on this date they were 167. Single Family Homes(SFH) are at 373, last year 363. That bodes well for increased sales. Prices for SFH will hold steady or go up slightly over the next week. Condo prices are heading down.
Does everyone remember this pleasant and amiable fellow, "Calgary Rip Off?"
He was famous for his love of Calgary. He posted things like this:
"I personally consider this stupid city a stepping stone to somewhere else. My wife hates it here, and Im beginning to see the wisdom of what she has been telling me all along that its overrated, claustrophobic, too cold, etc, etc, not to mention having an extremely ignorant political climate. One last note, people in Calgary move slow, like cows. Maybe that is why they call it cowtown: Dumb and slow."
He also posted this last year:
"No one is holding a gun to my head telling me to rent in Hidden Valley, but Falconridge and Temple arent the type of places I want my daughter running around at. However, the attitude of people who bought their homes here when the houses were worth less than half their current value is disgusting and slimy. Total greed. All I am trying to do is get a decent house for $250-$310K. I dont think that is too much to ask knowing that houses when built in Hidden Valley were probably $180K." Well, I see a house in Hidden Valley recently sold for less than $300,000: the actual price was $288,750. I'm thinking that he might have bought it and that's why we never hear from him anymore.
His payments on a house purchased for $288,750 would be a lot less than the $1650 which he was paying for rent.
With 20% down, 4% interest over 25 years, the payment including taxes(PIT) would be $1328.
When you buy or sell a house, it's important to have all the information for the community you are interested in. The table below illustrates how the differences between areas can be quite large, from a small price decline of 5% in Wildwood to a huge decline of 30% in Bowness.
Sales in Calgary are down 34% this year, however, in Scenic Acres, sales are up 28%. There are other factors involved in the price of a house which have not been taken into account here: location, condition, finished or unfinished basement, etc. You should consult a realtor in order to get the full picture.
This is a random sampling. It's possible that other communities could have fared better or worse than these. If you want the details for a specific community, contact me.
For the 3-months ending on Mar 31, 2009, for single family homes:
(For the entire city, SFH price was down 11%. Sales volume was down 34%.) |
Area | Change in Sales Price per Sq Ft Compared to 2008* | Change in Sales Volume Compared to 2008** |
Wildwood
| -5% | -42% |
Lynwood Ogden
| -6% | -38% |
Canyon Meadows
| -7% | -20% |
Altadore (infills)
| -7% | -11% |
Haysboro
| -7% | -29% |
West Springs
| -9% | +10% |
Coventry Hills
| -9% | -40% |
McKenzie Towne
| -9% | -42% |
Evergreen
| -9% | -43% |
Cougar Ridge
| -9% | -46% |
Beddington, Sandstone, MacEwan
| -10% | -36% |
Scenic Acres
| -11% | +28% |
Glendale, Glenbrook
| -11% | -11% |
Douglasdale estates
| -11% | -26% |
Tuscany
| -11% | -31% |
Royal Oak
| -13% | -41% |
Edgemont
| -13% | -40% |
Coach Hill
| -16% | -25% |
Queensland
| -16% | -59% |
Tuxedo, Mt Pleasant
| -17% | -49% |
Collingwood, Charleswood
| -21% | +6% |
Rundle, Whitehorn, Temple, Pineridge | -21% | -42% |
Bowness
| -30% | -77% |
*Comparing same style of house; eg: bung to bung, or 2-storey to 2-storey. The predominant style for each community was used. |
**Includes sales of all styles of homes. |