I knew you'd enjoy the headline. It illustrates that very little changed in April. The only price indicator that showed any movement from March was the condo median price which went from $293,000 to $290,000.
The April SFH average price was $474,564. Average days on market was 40.
Compared to last year, the sfh average price was the same, but the median is down $12,000, from $432,000 to $420,000. Sales were down 34% from April last year and down 4% compared to March.
A higher percentage of homes sold in the lower price range compared to last year. 67% of sfh sold for under $425,000 this year. In April 2007, it was 64%. (The average price was the same in both years.)
Sales price per sq ft was the same as March at $314.
We have 139% more inventory than we had in April 2007. That should be putting some downward pressure on prices(as we've been saying for months!)
If you think environmental issues aren't going to affect us in Alberta, the lead story on the CBC, and the front page of the Herald today should give us pause. 500 birds trapped in oil. The Herald story states, "In an advertisement from a coalition of American and Canadian environmental groups, an oilsands mining operation is captured within an image of a maple leaf oozing oil like blood." People from all over the world are hearing about this.
Don Braid says in his Herald column, "What we have now, almost officially, is a worldwide campaign against Alberta. This is entirely new; other people have always been the villains, not us.We have been a protected, prosperous little backwater that loved talking about being a world player without really knowing how to do it. And our politicians are learning that this is a very tough league." See full article Dead birds make Tory rival's job duck soup.
As well, who thinks we can kill our wolf pups without worldwide consequences? Petition against proposed wolf cull. Take a look at the countries where these people are from.
I expect that Alberta is high on Greenpeace's list(eg. thebanner at Ed's dinner). The U.S. is questioning if they will buy our"dirty oil." Have you seen the campaign against the seal hunt? Everyone has. It has been very effective, and that is what's going to happen to us. I'd like to see Alberta take some responsibility for environmental stewardship while we still have an opportunity. We could become a leader in sustainable energy development. We could promote tourism; "Come to Alberta and view our wild wolves." Yellowstone has reaped millions in tourist dollars from the re-introduction of wolves. Wolves bring ecological and economic benefits.
Do you think the $25 million that is being spent on advertising abroad to help our image is a good investment? Will it have any effect on worldwide opinion?
Thank you to Warren for submitting this topic:
On March 25, Bob wrote in What's New "We're averaging 126 price reductions per day over the past week. That's as high as they were back in October when we had approximately the same inventory."
I can only assume that this trend has continued or even intensified in the month since that post (Bob would have more accurate data on this). (It's now 166/day over the past week -Bob) I've been watching the listings for a couple of months (as I'm thinking of buying this fall) and I bookmark ones that catch my eye with the list price at that time in the bookmark title. There seems to be three schools of thought on reducing the list price:
1. Full disclosure - Listing states that "Price reduced by $xx,xxx!"
2. Partial disclosure - Listing states that "Price Reduced!" but no mention of by how much.
3. No disclosure - Even though list price has went down, no mention is made in the listing.
What are people's thoughts on this? Does advertising a list price imply weakness and desperation? Or does advertising a price reduction establish a more solid floor to negotiating (ie: "I've already reduced the price by $xx,xxx - I can't go any lower).
Do price reductions even matter? If a listing is overpriced by $50,000 and the price is reduced $30,000, will buyers take notice or just disregard it as still overpriced?
During the height of the boom, I heard many people argue that sellers were intentionally listing low in order to encourage bidding wars (and ultimately get a higher price than they could have with an accurate list price). CBC National had a story last night of a flipper in Toronto who has listed his house at $1 for that exact reason - to generate interest and spark a bidding war. Has the inverse now happened, with sellers listing high and then reducing in the hopes of sparking a frenzy? "Price reduced $50,000!!" does catch the eye...
Or is it all just a gimmick? I've seen listings proudly advertise "Price Reduced!!" when it was dropped by less than 1%. Perhaps the only true price reductions are the unadvertised ones?
What are people's thoughts?
A TD Economics Special Report released today calls for a 5% increase in home prices in Alberta for 2008, and no major correction. Hi-lites of the report:
The main conclusion is that sales will moderate, leading to a sales-to-new listing ratio that is consistent with balanced markets and cause more moderate price growth. However, we still don’t see a major housing correction for a number of reasons.
· First, the parallels with the U.S. experience are limited. Much of the U.S. housing excess came from an inappropriate loosening of credit conditions that did not occur in Canada. In 2007, 32% of mortgage origination was subprime loans (i.e. to high risk borrowers) compared to an estimated 5% in Canada. Loans with no documentation for income, jobs or assets became common in the United States, while such practice was rare in Canada. Interest-only mortgages became popular in the U.S., but in Canada were less than 5% of mortgage originations.
· Second, the similarities with the last Canadian housing bubble in 1989 are also limited. Affordability in 1989 deteriorated to 39% of personal income. Much of the new home building was done without the presales of today, and this led to a significant supply overhang in 1989 that is very unlikely to occur in the current market. The pace of home price appreciation, after removing inflation, was significantly greater in the past. And, the housing fundamentals today are far superior, with lower unemployment and interest rates – although income growth was comparable.
· Third, and this is critical, both the latest U.S. housing bubble and the Canadian bubble of 1989 were pricked when the central bank tightened monetary policy significantly, causing speculators to scramble for the doors. However, the debate at the moment in Canada is how low rates will go – not how high they will climb. The weakness in the U.S. economy is coming at a time when the high-flying Canadian dollar is keeping inflation at check. This gives the Bank scope to lower rates.
Alberta plans to kill wolf pups
This is a cause that I am passionate about and I am compelled to share my feelings.
As a long-time volunteer for environmental causes, I am outraged at the provincial government’s proposal for a wolf cull.
“Researchers in the University of Alberta's department of biological sciences have proposed a cull of wolves in the Rocky Mountain House area.
This would involve shooting wolf pups and sterilizing older wolves, with the intention of boosting the elk population in the area.
One reason given for the wolf cull is that it would provide more elk for human hunters to kill.”
The Red Deer Advocate has an insightful editorial Wolf Cull Defies Logic
I invite and encourage everyone to tell the government how you feel about this issue. The best way to do this is to write a letter to your MLA. If you don’t have time for that, then please go to this website and sign the petition:
http://www.gopetition.com/petitions/against-proposed-alberta-wolf-cull.html
Once you have signed the petition, you can log in and see the comments which people have made, such as this one:
“Not only is the research questionable, the government policies that led to it need to be re-examined as well. The current government wolf culls only mask the high level of destruction of Alberta's wilderness due to forestry and the oil industry. We need creative solutions, not another way to kill wolves.”
Here’s the comment which I made:
”Let's exploit the tourism factor of our wildlife rather than the killing of our wildlife. You can shoot a wolf a thousand times with a camera, but only once with a gun.”
Five years ago, I organized a large and well-publicized protest over the killing, by trappers, of two wolves from Banff’s Bow Valley pack. We received huge media coverage and informed many people about the situation. I am pleased to say that wolves have returned to the Bow Valley and they were successful in raising a large litter of pups last year. Elk are proliferating in Banff, and there is concern by park officials that there will soon be Elk/human conflict in the townsite. They've put up fences in strategic areas of the park, trying to make the elk more susceptible to wolf predation.
The town council of Canmore feels strongly about this and has written a
letter to the provincial government. “The policy runs contrary philosophically to where we are as a town, this is contrary to who we are as a community.”
I had buyers come to town on Feb 18. We looked at 12 properties in one particular area of Calgary. They found their perfect house but were unsure of how to proceed because they needed to sell their own house. My advice was to sell their own house first, before putting in an offer, because they would have better bargaining power by not putting that in as a condition. I advised that in the present market, there was a good chance that their dream house would still be available in 30 days. It's also important to note that the house they desired had only been on the market for 8 days.
Fast forward 30 days. Dream house is still available. Offer is submitted and negotiated. Bottom line: In the past 30 days, the average sold price was $7,000 under the list price in this area. My clients got their home for $15,000 under the list price.
Back on Feb 18, chances were good that we would not have got the house for $15,000 under, especially considering that it had been on the market for only 8 days, and having to put "sale of buyers home" in as a condition.
The average Sale Price per sq ft for a similar style home(2-storey, unfin bsmt) in this community in March was $229. My clients obtained their dream home for $221/sq ft.
I did an interview with one of the radio stations today who wanted a summary of the March month-end. That's not news, but someone who heard the interview actually looked me up and called me. He gave his name and said he was a stockbroker and that he'd seen my signs around his neighbourhhod on occasion. He then proceeded to say that he was relieved to finally hear a realtor tell it like it is. I don't remember exactly what I said in the interview, but the gist of it was "Lots of inventory, slow sales, and six months of uncertainty in store."
It seems that around the water cooler in his office, most of his colleagues thought we were in for continued rising prices. He had not heard any realtors mention the "uncertainty" issue before. His opinion was that prices were going to go down and the next two years would present fabulous buying opportunities for Calgary real estate, but his long-term prognosis for Calgary was very upbeat.
Does this gent have it correct?
We've been sailing in uncharted territory for the past two-and-a-half years in the Calgary housing market and nobody has predicted with any accuracy the events that have transpired. Forecasts are all over the place now. There are extremists on both ends of the spectrum, forecasting everything from a crash to a continued escalation in prices.
March or April will be the first month since 1996 when we will experience year-over-year price losses. Will this affect anything significantly? I don't believe it will, considering that prices have risen significantly since December. It should make for good headlines, but not much else.
Confidence will be restored when Albertans see that this province will be the least affected by the global economic uncertainties. While we may see small price fluctuations, the present stability will continue and we'll get on with buying and selling homes without having to wonder if it's the right decision. I think that's the best thing that could happen after all the mayhem, turmoil, and upheaval of the recent past. Calmness and balance will be welcomed by all of us.
Calgary will definitely be the standout performer in North America. We repeatedly see and hear that the long-term prospects for Calgary and western Canada are bright. This front page story in the Herald today says that 3 million newcomers are expected over the next 25 years: Surging west leaves rural image behind
The Canada West Foundation says “The West -- powered by a robust demand for commodities -- has become Canada's engine, with the region leading the country in economic growth in recent years. And Alberta is leading the charge, accounting for nearly half of the region's economic output. Branding the province as a "standout performer" in the region, it shows Alberta created one quarter of all new jobs in Canada in 2006 and 2007. See full story Alberta leads western charge
P.S. It's been very busy since I returned to work. If you don't hear from me immediately, please be patient.
Spring is here, and what better time to present a new idea. This concept is still in the embryo, but I wanted to get some feedback on it:
DailyStats.ca was a cutting-edge idea when it started. Can you imagine going without it now? Something that didn't exist two years ago is now a part of so many Calgarian's daily lives. Now I want to try something even more revolutionary. I'd like to get all my bloggers involved in the evaluation process of a new listing, then follow the entire process through to its conclusion. I am confident the response from you would be good. What I require is a seller who is willing to go through this exercise and make the process public.
What are the benefits to the seller? An incredible amount of exposure and publicity for your property. I think it would be an excellent feedback forum for the seller, and perhaps it would reveal some factors which they may not have considered, both positive and negative.
If you have a house which you are just about ready to put on the market, give this some consideration. In the mean time, I'd like all of you to give me your ideas. What are your thoughts? If I give you the details of a prospective listing, including comparable sales, will you tell me what you think it's worth? The pros and cons of the property? Poke holes in my evaluation?
My wish list would be for a home in the inner city, or not too far out. Perhaps it could evolve into a monthly feature on here. It's one thing to think you know the market, but another when you see the final sales price.
There was no rush to buy last fall. Prices were going down and inventory was building. If you picked out a property that you desired, you could take your time, wait for more new listings to view, go for a holiday, do some Christmas shopping, and there was a good liklihood that the house was still there.
Now that the Days on Market is down to 40, from 51 in December, and prices are creeping up, does it create any sense of urgency? If you are a buyer, does it motivate you to get more serious? Do you continue to wait because you know March and April brings lots of new listings onto the market?
***
I came across this very unusual item from my colleague Norm Fisher's Saskaton blog, and I thought it was worth reading. When most people see something like this, their first thought is what is the hidden agenda, but this seems to be the genuine thing:
Murray Prokosh, owner of CCL Classic Communities, a home builder operating out of Medicine Hat Alberta believes that prosperity shouldn’t always be measured by the bottom line. Addressing a crowd of locals at a National Affordable Housing Conference in Saskatoon this week, Prokosh promoted the ideas a quality build, at an affordable price, with the ultimate reward of helping those who might not otherwise find a way to home ownership.
Since 2002, CCL Communities has built over 1,000 homes in Medicine Hat and High River, Alberta. In a Star Phoenix article published on February 28, the builder claims to have sold those units from $23,000 to $67,000 below market value. Their corporate website states that over $8,000,000 in profits have been given back to home buyers through reduced sale prices and incentives.
I wish this story wasn't the exception. When you're old and frail and looking back on your life, it's the things we've done to help others that will be the most meaningful.
Feb median price for single family homes is up 4.4%($18,000) over January. Average price is up 3.6%($16,399). Since Dec 31, the median price has risen 5.2%($21,212), and the average price has risen 6.1%(26,927).
Feb sales are down 36% from last year. 2007 was not exactly a balanced market in Feb. Insane and frenzied might be too mild to describe it. A fairer comparison to the 7-year average still puts sales down 13%.
Days on the market decreased to 39 from 50(January). C'mon now, with the huge inventory and low sales, who out there can tell me with a straight face that prices would be up 6.1%??????????? (I mean anybody except Al Bundy).
Hi everybody! I still have a few kilometres* to go, but I'm opening the blog after a three-and-a-half month hiatus. Where do we start? There's so much to discuss.
When we shut down in November, prices were falling, sales were down, and inventory was high. There was lots of trepidation about the future of the Calgary housing market. Was there going to be a crash, or the usual spring price increases? Are you surprised by anything that's happening? Did you really expect the price increases that we're presently experiencing? I certainly am surprised that the price could go up with all the inventory we have. Sales are down dramatically compared to last year, around 40%. Affordability is keeping a lot of first-time buyers from being able to own a home.
There was an article in the Herald today that says we are not in the same situation as the United States. Western Property Market Bouyant.
On my last topic posted Nov 15, Chopper made this prediction: "I predict the price bottoms out by Dec 31." Chopper, congratulations.
I look forward to hearing from everyone again.
Just a quick note of thanks to Mike Fotiou who has done an excellent job with the daily stats.
You'll have to give some credit for my early return to Sheldon Johnston and Sara MacLennan from the Edmonton Real Estate blog. I had the pleasure of meeting them in person last week, and they reminded me how much fun it was to host a blog! Sheldon posted a blog entry and photo from our get-together here.
*When I left you in November, my goal was to cross country ski 1000K this winter. I'm almost there(910K). I can already say this winter was a huge success, but if I can sneak away four or five more times, I'll have achieved my goal. I picked a good year; the snow and the trails have been the best I've seen in a long time.
I'd first like to say that it's so nice to be able to log in and see the daily stats every day. Mike Fotiou is doing an excellent job at keeping us updated. I like his format and layout a lot better than the one I was using. Keep up the good work, Mike!
The item that really jumps out on my weekly stats update today is the sales/new listings ratio for single family homes at 62%. That number was 36% last week. October, it was 43%.
Some numbers that are not published, but interesting nevertheless: Pending sales for SFH are at $477,666. These are sales that are in the pipeline but not yet finalized. Also, 8% of the SFH listed this month already have a sale or pending sale(condos 7%).
I have just a few minutes before I head out for the Great Divide to do another 20 K. Tuesday was my first day on skis after a 7 month layoff and it was glorious. Yes, the sking is fabulous out here in Lake Louise. We couldn't have timed the ski season any better. As we pulled up to Moraine Lake Road on Tuesday, the tracksetter had just finished laying down two new tracks in excellent snow for the first time this year. Not expecting such good conditions, I only brought my rock skis. I could have been using my faster racing skis without fear of any damage. For any other cross country skiers out there, I see that the trails at mount Shark are groomed(not trackset) and Ribbon Creek is packed. I don't expect Ribbon Creek will last long with the warm weather that's coming in.
When I have my 1000 kilometres in, I'll be back in full force, regardless of the direction that prices are going.
There must be something very special happening in order for me to post two topics on the same day. I am pleased(thrilled, actually) to announce that my colleague, Mike Fotiou, will be posting Daily Stats on his website.
Mike says:
Hello everyone! My name is Mike Fotiou with First Place Realty. While Bob is taking some well deserved rest this winter, you'll be able to view your favourite daily stats on my website at www.FindCalgary.ca I'll be updating the MLS stats daily as well as compiling Calgary real estate news links from various sources to provide a broad view of the ever changing market.
Thanks for your time, and I hope everyone enjoys the daily MLS stats! (a big thanks goes to Bob for starting this informative service!)
Mike has some excellent search features on his site that you will find useful, too. Here's a link to Mike's Blog which will be taking over for this one in the near future.
The first Weekly Stats Update has now been posted. The average price of condos over the past week is down $25,000 compared to the October 31 monthly price(331,617 - 306,594). Yet the median price is exactly the same at $289,000.
Once again we see how a few million dollar sales skews the averages. The average condo price in October would have been $309,432 without the 7 sales that were over one million dollars. There are no condo sales this month for over $1 million.
I don't have a table for the number of sales, but these are very interesting. Single family home sales, 221, are down considerably compared to last year's 319.
Condo sales this year are 114. Last year 135.
Combined, that's a 26% drop in the number of sales for the first week of November compared to 2006.