Calgary Real Estate predictions?

[Claeren]

^ And that is from a group that (I believe? IIRC) thought we would be up this year (where we have lost at least 15%!).

I am guessing a solid 15% drop again for next year myself. (30% total)

It is tricky though because a lot of any drop can be hidden in the quality of home you get for the money.

At the height of the boom the average was calculated using all homes that sold, crappy homes and nice homes.

After the boom only nice homes (as judged by 'quality for the price') sell. So the average is only made up of well priced homes that people would want to live in.

Thus nice homes have lost more than they seem to have (because they used to be all above the average price where now they are the entire average price) and crappy homes just do not sell (are illiquid).

It is something a lot of people do not consider when looking at average (and even median) pricing stats that are spit out by self-serving real estate groups.




Claeren.

[Nancy]

November Home Sales Drop Significantly In Calgary
CHQR Newsroom
12/1/2008
Home sales in Calgary dropped 39 percent in November when compared to the same month one year ago.
670 homes changed handed in Calgary last month, down from 1,100 in November 2007.
It's also down 18 percent from the month before, when 820 homes were sold.condo sales were also down significantly - nearly 43 per cent from November 2007, and 29 percent from October's sales.
Calgary Real Estate Board President Ed Jensen says market activity typically slows down close to the end of the year, but that's magnified this year due to the uncertain economic situation.
Prices have also dropped, with the average price of a single family home in Calgary now sitting at $435,000 - down 5.8 percent from one year ago.

Average price in October was $449,100, FYI.

[Jason14h]

Will the Bloc fix this? From what I hear they are great

[Claeren]

Originally Posted by Nancy

November Home Sales Drop Significantly In Calgary
CHQR Newsroom
12/1/2008
Home sales in Calgary dropped 39 percent in November when compared to the same month one year ago.
670 homes changed handed in Calgary last month, down from 1,100 in November 2007.
It's also down 18 percent from the month before, when 820 homes were sold.condo sales were also down significantly - nearly 43 per cent from November 2007, and 29 percent from October's sales.
Calgary Real Estate Board President Ed Jensen says market activity typically slows down close to the end of the year, but that's magnified this year due to the uncertain economic situation.
Prices have also dropped, with the average price of a single family home in Calgary now sitting at $435,000 - down 5.8 percent from one year ago.

Average price in October was $449,100, FYI.

And as I warned earlier in this thread, Ed Jensen is more than happy to use November-2007 numbers because while year-over-year is a valid stat, it leaves out how far they actually are down from peak - about 6 months before that. SFH prices (I believe, without looking it up) peaked at $505,000. So they would be down about 15% from peak, which is more than double the 5.8% he is happy to pretend it is down.

And there will not be a spring bump -- although few people have ever lost money betting on the stupidity of consumers so maybe there are enough people out there that don't see the fundamentals of the market and that are willing to lock themselves into (soon after buying) upside down mortgages worth many hundreds of thousands of dollars?




Claeren.

[Nancy]

What they need to do is put the Calgary numbers up beside the Vancouver numbers, and they won't look so bad. The average SF home price in Vancouver for November has fallen by 10% in one month and nearly 20% just from March. (But the REBGV only publicises a made-up statistic called Benchmark Price, so I'm sure they'll obscure the November numbers somehow.)
http://paul-northvancouverhomes.blog...and-sales.html

[Dan02]

Originally Posted by Claeren

And as I warned earlier in this thread, Ed Jensen is more than happy to use November-2007 numbers because while year-over-year is a valid stat, it leaves out how far they actually are down from peak - about 6 months before that.

Given the yearly cyclical nature of the real estate market don't you think year over year is a more valid stat then peak to bottom? If it is truely down 15% then eventually that would be reflected in the year over year numbers. In fact if you believe that the current year over year numbers are hiding the true drop then eventually this is gonna have to show up in the year over year numbers, infact it would have to show up as alot more then 15% in some months if it's only showing at 5.8% in November.

[Claeren]

Originally Posted by Dan02

Given the yearly cyclical nature of the real estate market don't you think year over year is a more valid stat then peak to bottom? If it is truely down 15% then eventually that would be reflected in the year over year numbers. In fact if you believe that the current year over year numbers are hiding the true drop then eventually this is gonna have to show up in the year over year numbers, infact it would have to show up as alot more then 15% in some months if it's only showing at 5.8% in November.

Oh I agree it is a legit stat (that is why I said as much), but I just want to point out they use the numbers that look good for the home building/selling industry. Ed Jensen has said some pretty questionable things to keep sales up and anyone listening to him stands to lose a lot of money. At the peak of the market he was preaching to buy buy buy and even when the American market was tanking and our construction stats were through the roof the newspapers were still letting him spew his 'prices should moderate but still go up' lines. He can always just apologize when he is wrong though, right? Who cares if people owe a hundred thousand more on their home than it is worth?


The real problem though is that you are mistaken in your logic about this stat, it is not 'eventually reflected in year over year stats'. That is because come summer they will use 1-year year-over-year pricing when the peak was actually 2 years ago. So they will say prices are down 5% in June (2009-from-2008), when they are down 20% from the prior June (2009-2007).

Anyone not currently quoting 'prices since peak' is hiding something IMO.

Although it is pretty obvious they don't want people knowing that anyone who has bought in the last 3 years is likely underwater since they bought.




Claeren.

[Dan02]

Originally Posted by Claeren

Oh I agree it is a legit stat (that is why I said as much), but I just want to point out they use the numbers that look good for the home building/selling industry.

I don't want to suggest that the market is in good shape, however, I don't think it's too bad off just extremely overheated in mid 07, I bought pre peak though so i guess I'm not in as bad a shape as others.

But even peak vs bottom we're only down 11%, not to suggest 11% is a small number, but it's not about 15% imo anyways.

[Claeren]

Originally Posted by Dan02

I don't want to suggest that the market is in good shape, however, I don't think it's too bad off just extremely overheated in mid 07, I bought pre peak though so i guess I'm not in as bad a shape as others.

But even peak vs bottom we're only down 11%, not to suggest 11% is a small number, but it's not about 15% imo anyways.

SFH prices would have to go up 16% to get back to the peak.



Just so the numbers are all here:

Single Family Home (SFH) -- 2007peak-to-2008current (total drop)

Average Price: $505,000 to $435,000 (-$70,000)
Median Price: $435,000 to $387,000 (-$48,000)

Multi-Family -- peak-current

Average Price: $332,000 to $285,000 (-$47,000)
Median Price: $309,000 to $251,000 (-$58,000)



With prices continuing to slide, tons of construction capacity in the market and the fact that each dollar of your mortgage usually costs another dollar to pay off and that is a huge hit to a lot of young people out there who Ed Jensen and/or the like thought were best served in using a high ratio mortgage to get into the market with.




Claeren.

[Wookie]

Bump!
2009 here we come.

[Winsor_Pilates]

Gonna be an interesting year. I'm hoping for a turnaround, but not holding my breath.

Gonna start it off with a bang and a huge new project for me in BC. I've got almost 400 units to move in the next 3 months, and it won't be easy. Wish me Luck!

[Nancy]

Originally Posted by Winsor_Pilates

Gonna be an interesting year. I'm hoping for a turnaround, but not holding my breath.

Gonna start it off with a bang and a huge new project for me in BC. I've got almost 400 units to move in the next 3 months, and it won't be easy. Wish me Luck!

Good luck. It'll be a fantastic, character building exercise.

Here are Novembers months of inventory for various BC regions that I stole from a post on another forum:

Shuswap (Residential) 35.30
Central Okanagan (Residential) 29.36
South Okanagan 27.27
North Okanagan (Residential) 26.73
Fraser Valley (Residential) 23.27
Greater Vancouver (Residential) 20.99
Edmonton (Residential) 9.00
Calgary (SFH+Apartment) 7.84
Toronto (SFD) 7.43

Typical 'Balanced' Market: 5-7 Months of Inventory

[photon]

Ouch.

[pepper24]

Ouch for BC.

I have no plans of selling my home here in Calgary for at least 5-10 years so I am not worried about short term real estate but good to see a healthy inventory range though I don't think the damage is fully done yet.

I do have plans though to buy some recreational property in the short term in BC so good news there. It'll take a while to correct those inventory numbers.

[Sylvanfan]

I live in the South Okanagan and my wife is on my case about us not having a house yet . But stats that I read suggest a 15% decrease in house prices for this coming year in B.C. Those inventory numbers seem to back it up. Hence I'm not the least bit interested in even wanting to look at a house right now. Although in Osoyoos where I live people who have their house for sale are not really that motivated to sell. They sell and it's off to the nursing home. It's not a market where people have to move because they have a job elsewhere and need to make a living like cities in Alberta are. It's like that economist stat where home ownership is greater in area's where unemployment is higher.

I will add that Osoyoos is going to be supersaturated with recreation property here in the next 24 months. It's already well beyond current demand, and theres going to be more properties completed this summer. I'll be interested to watch that market and see what has to give to get some of those properties moving. It's only in the last three months that people around here have realized the market boom is done.

[Nancy]

Originally Posted by Sylvanfan

I live in the South Okanagan and my wife is on my case about us not having a house yet . But stats that I read suggest a 15% decrease in house prices for this coming year in B.C. Those inventory numbers seem to back it up. Hence I'm not the least bit interested in even wanting to look at a house right now. Although in Osoyoos where I live people who have their house for sale are not really that motivated to sell. They sell and it's off to the nursing home. It's not a market where people have to move because they have a job elsewhere and need to make a living like cities in Alberta are. It's like that economist stat where home ownership is greater in area's where unemployment is higher.

I don't live in the Okanagan, so I only spout hearsay. Here on the other forum is one of the several threads trashing Kelowna and the Okanagan in general:

http://www.realestatetalks.com/viewt...hp?f=8&t=36739

The following is linked in the above thread:
http://www.greaterfool.ca/2008/10/09...ng-in-kelowna/

[AFireInside]

Originally Posted by pepper24

Ouch for BC.

I have no plans of selling my home here in Calgary for at least 5-10 years so I am not worried about short term real estate but good to see a healthy inventory range though I don't think the damage is fully done yet.

I do have plans though to buy some recreational property in the short term in BC so good news there. It'll take a while to correct those inventory numbers.

I don't think the damage is even close to being done. From what I see and hear a lot of people are waiting until the spring to list, or re-list their properties that they could not sell this past fall. Problem is, there is already a pretty large inventory and its only going to grow in the spring, and that will likely force prices down even further. Could get messy for some.

[Slava]

Its hard to predict the next 6 months though. I understand that with rising inventory the prices should drop, but at the same time there will also be a lot more buyers into the spring and early summer. My guess is that prices decline by 5-7%, or hold relatively level.

[Bob]

Originally Posted by Nancy

I don't live in the Okanagan, so I only spout hearsay. Here on the other forum is one of the several threads trashing Kelowna and the Okanagan in general:

http://www.realestatetalks.com/viewt...hp?f=8&t=36739

The following is linked in the above thread:
http://www.greaterfool.ca/2008/10/09...ng-in-kelowna/

Wow, I had no idea Kelowna was so screwed.

[AFireInside]

Originally Posted by Slava

Its hard to predict the next 6 months though. I understand that with rising inventory the prices should drop, but at the same time there will also be a lot more buyers into the spring and early summer. My guess is that prices decline by 5-7%, or hold relatively level.

Yeah thats a possibility, I'm much more pessimistic however. My gf, and I almost bought last February, but I decided to hold off because after research etc, I figured we were heading into a crash. I was told by our realtor that prices would increase in the spring/summer because there would be so many buyers, but that didn't happen last year, and this was a time when many believe prices were still going to increase so they could make money on their purchase. I just don't see it happening, I figure at least another 10 - 15%.

Big factor is that there are layoffs, and the economy is going into the crapper. This means there will be fewer buyers, on top of that the 40 year mortgage with nothing down is now gone, that will also eliminate some buyers.

Will be interesting in the next several months.