Monday, October 20, 2008
Are you confused about our market?? I think if you talk to 10 different people you will get 10 different answers or opinions on our real estate market. Here is my opinion on our market. Up until a month ago I was very positive about our market as many of you know, I was of the opinion that our inventory levels were going to bottom out in November and stabilize until spring. My opinion was that we would see a slight increase in pricing next year and my guess was about 5%. Over the last 3 weeks my opinion has changed drastically!! I now have huge concerns about our financial system not only here but on a global perspective and secondly on our economy both here at home and abroad. I am of the opinion that our market is still driven by the oil industry and if you agree with me then our slide in oil prices should be of a concern. In the last few days oil prices have traded in a range of $68.00 to $72.00 and many experts are suggesting we could see prices in the $50.00 to $55.00 price range. Even if the prices stay where they are currently or decrease slightly more I believe our conventional oil is still okay, but what about natural gas which is our largest percentage of production not oil. Our natural gas prices need to increase to keep drilling. But here is the big question can the junior oil companies get the financing they need to operate drilling programs this year?? If not in my opinion we have a problem. What about the heavy oil at about $85.00 a barrel my guess is you are at about break even. How long do the major oil companies wait before they moth ball the expansions. I think that our commodities and the dollar have a direct correlation and as commodities drop so will our dollar. With United States and Europe in a recession we will have trouble shipping our products to the rest of the world. If the Bank of Canada lowers it's interest rates by say another 1% will it really help I think not. I am seeing our real estate inventories increase. In the last 2 weeks our increases have been way more than I ever thought and my opinion is this is going to continue. So get you helmets on and buckle up, as I think we are in for a interesting ride over the next 18 months. I am of the opinion that we will be hit less here than the rest of Canada but will the banks pull there horns in? Did I need to ask that last question it has already happened. If I am right you will need a realtor that has a vision and ideas to see you through these turbulent times. I have a plan to help you get through these times. I believe it will be sucessfull as the way my marketing plan has been. If I am right there will be a lot of money made and a lot of money lost in real estate over the next 18 months. Where do you want to be? Give me a call to discuss your real estate needs.
Thursday, October 16, 2008
Home construction slides
By Harley Richards
There are a variety of words that could be used to describe the slowdown in Red Deer’s residential construction sector.
Regine Durand chooses “correction”.
A market analyst with Canada Mortgage and Housing Corp. In Calgary, Durand acknowledges that the decline in housing starts this year has been substantial.
The 426 single-detached and multi-family units started during the first nine months of 2008 represent a 67 per cent drop from the 1297 units started during the same period last year.
The figure is 58 per cent lower than Red Deer’s five-year average of 1004 starts and down 51 per cent from the 10 year average of 874 starts.
But Durand sees reason for optimism.
She pointed out that the inventory of new, single-detached homes in the city awaiting buyers at the end of September numbered 85 – down from 107 the preceding month.
Meanwhile, the number of listings on Red Deer’s resale market in September was 268, as compared with the 598 active listings a year earlier.
“its good news,” said Durand. ‘It means that the market is absorbing more units”.
By 2009, she continued, the surplus inventory of new and used homes on the market should disappear and demand for new construction will rise.
Encouraging this will be the moderation of house prices.
Members of the local homebuilding industry agree that business has slowed, but they also characterize the situation as a “correction”.
“It looks like things will pick up again in 2009,” said Scott Boyd, executive officer with the Canadian Home Builders’ Association, Central Alberta branch.
Gord Bontje, president of Laebon Homes, is also anticipating better times.
He notices improved sales in August and said that trand has continued.
“Two weeks ago was our best sales week in a couple of years,” Bontje said.
Thare have been cutbacks in staffing, said Boyd and Bontje, but they think this reflects the fact many companies boosted their payrolls in 2006 and 2007 to keep pace with demand.
“Thas was the abnormal piece,” said Bontje, describing how his company sent its human resources manager to the Maritimes and looked into bringing foreign workers to Canada in its efforts to add people.
“I think today is kind of the way it should be”.
Laebon’s current payroll – about 110 – is about the same as it was before the building boom hit, he said.
Jonas Neidert, president of the local branch of the Canadian Home Builders’ Association, agreed with Bontje’s assessment.
There are a variety of words that could be used to describe the slowdown in Red Deer’s residential construction sector.
Regine Durand chooses “correction”.
A market analyst with Canada Mortgage and Housing Corp. In Calgary, Durand acknowledges that the decline in housing starts this year has been substantial.
The 426 single-detached and multi-family units started during the first nine months of 2008 represent a 67 per cent drop from the 1297 units started during the same period last year.
The figure is 58 per cent lower than Red Deer’s five-year average of 1004 starts and down 51 per cent from the 10 year average of 874 starts.
But Durand sees reason for optimism.
She pointed out that the inventory of new, single-detached homes in the city awaiting buyers at the end of September numbered 85 – down from 107 the preceding month.
Meanwhile, the number of listings on Red Deer’s resale market in September was 268, as compared with the 598 active listings a year earlier.
“its good news,” said Durand. ‘It means that the market is absorbing more units”.
By 2009, she continued, the surplus inventory of new and used homes on the market should disappear and demand for new construction will rise.
Encouraging this will be the moderation of house prices.
Members of the local homebuilding industry agree that business has slowed, but they also characterize the situation as a “correction”.
“It looks like things will pick up again in 2009,” said Scott Boyd, executive officer with the Canadian Home Builders’ Association, Central Alberta branch.
Gord Bontje, president of Laebon Homes, is also anticipating better times.
He notices improved sales in August and said that trand has continued.
“Two weeks ago was our best sales week in a couple of years,” Bontje said.
Thare have been cutbacks in staffing, said Boyd and Bontje, but they think this reflects the fact many companies boosted their payrolls in 2006 and 2007 to keep pace with demand.
“Thas was the abnormal piece,” said Bontje, describing how his company sent its human resources manager to the Maritimes and looked into bringing foreign workers to Canada in its efforts to add people.
“I think today is kind of the way it should be”.
Laebon’s current payroll – about 110 – is about the same as it was before the building boom hit, he said.
Jonas Neidert, president of the local branch of the Canadian Home Builders’ Association, agreed with Bontje’s assessment.
Wednesday, October 15, 2008
Construction: Commercial sector still humming
“A lot of guys have expanded over the last year or two years. Even with layoffs, they’re probably returning a little bit more to normal”
He added that his own company, Avalon Central Alberta, has been getting a lot of phone calls from trades’ people looking for work.
But many of these people have been able to find places in the commercial construction sector, which continues to hum along.
As for the global financial meltdown, Durand downplayed its likely impact on the local housing market.
“Just looking at Red Deer, the economic fundamentals are still strong there,” she said, citing continued job creation and the migration of people to Alberta from other provinces. In fact, added Bontje, though times in other parts of the country – such as Central Canada where the manufacturing sector is struggling – could stimulate demand for housing here.
“What’s the first thing you need when you move to Alberta?
“Well, you need a place to live and then you need a job – or vice versa.”
He added that his own company, Avalon Central Alberta, has been getting a lot of phone calls from trades’ people looking for work.
But many of these people have been able to find places in the commercial construction sector, which continues to hum along.
As for the global financial meltdown, Durand downplayed its likely impact on the local housing market.
“Just looking at Red Deer, the economic fundamentals are still strong there,” she said, citing continued job creation and the migration of people to Alberta from other provinces. In fact, added Bontje, though times in other parts of the country – such as Central Canada where the manufacturing sector is struggling – could stimulate demand for housing here.
“What’s the first thing you need when you move to Alberta?
“Well, you need a place to live and then you need a job – or vice versa.”
Tuesday, October 14, 2008
Housing demand
Marty Hope, Calgary HeraldPublished: Saturday, October 11, 2008
Despite a diversified economy, net migration into Red Deer is weakening -- and that could impact the pace of new home construction, says a federal agency.
A growing agriculture, expanding retail, wholesale, distribution and manufacturing industries, booming construction and a strong oil and gas market continue to drive the economy of the central Alberta city.
In May, major construction projects proposed, completed or under construction in the region stood at $2.9 billion, up 70 per cent from May 2007.
"However, net migration, one of the key drivers of household formation and housing demand, is weakening," says Richard Corriveau, Prairie region economist for Canada Mortgage and Housing Corp. "Moving into the forecast period, the weakening net migration will likely put a brake on the demand for housing."
After dropping by 11 per cent in 2007, single-detached starts are expected to drop another 59 per cent this year to 400 units. To the end of June, single starts fell by 69 per cent as builders prudently responded to rising inventories and huge selection in the competing resale market.
After reaching their second highest level in 21 years in 2007, multi-family starts will drop 40 per cent this year.
At the end of June, year-to-date multi-family starts were down 47 per cent. To reduce inventories in the face of a well-supplied competing resale market, builders will restrain the number of multi-family starts to 350 units this year.
Following five consecutive years of increases, resale activity should fall to 4,500 units in 2008, down 11 per cent from 2007. Year-to-date transactions fell by 22 per cent to the end of June 2008. A potential up tick in demand in the spring buying season of 2009 should also draw supply levels lower, and bring it back to balanced conditions. Expect sales to rebound to 4,650 units in 2009, up 3.3 per cent from 2008.
In the wake of a 32 per cent gain in 2007, the total average resale price is expected to rise by 5.4 per cent in 2008 to $285,000. Price pressure will ease further in 2009 with price growth being strongly held back by excess inventories. Look for prices to hit $295,000 in 2009, up 3.5 per cent from 2008, the weakest gain in 13 years.
The following is a look at some other areas in Alberta:
Grande Prairie
Currently the natural gas sector is a major driver of the Grande Prairie economy, but the industry slowed as inventory levels in North America reached a five-year high, causing gas prices to decline. In addition, the new royalty framework also introduced some uncertainty in the market.
The slowdown in the natural gas industry affected the economy in Grande Prairie and would eventually put a damper on housing demand.
The natural gas industry appears poised to recover in the latter half of 2008. However, the increased activity in the economy is not expected to make any major impacts to housing demand until 2009.
The city's forestry manufacturing industry has slowed with the downturn in the United States housing market, falling lumber prices, increased costs, and the rising Canadian dollar.
Inventory of lumber is also at elevated levels.
In 2007, single-detached starts in Grande Prairie ended the year with 784 units, down 26 per cent from 2006. The demand for housing has slowed from 2007, and inventories are currently at record levels.
Builders are pulling back starts in 2008 to allow the current inventory to be drawn down. Starts in 2008 are anticipated to fall to 400 units, down 49 per cent from a year earlier.
Multi-family starts reached a new record in 2007 at 839 units, up 49 per cent from 2006. Over the forecast period, multiple starts are expected to decline in response to the growing inventory on the market.
In 2008, starts are anticipated to drop by 79 per cent to 175 units.
The economic slowdown has also dampened activity on the MLS market. Sales fell from 3,017 in 2006 to 2,550 sales in 2007, representing a 15 per cent decline. In 2008, sales are expected to decrease by nearly nine per cent to 2,325 and rise by 3.2 per cent to 2,400 in 2009.
Following price growth of over 11 per cent in 2007, gains in the average resale price are expected to be minimal over the forecast period.
In 2008, the average price is expected to remain unchanged at $265,000, while in 2009 the average price is expected to increase by four per cent to $275,000. Price growth will improve next year in the face of more balanced conditions.
Lethbridge
Housing demand in this southern Alberta city is expected to be lower throughout the forecast period due largely to weaker population growth from net migration which is expected to decline in 2008 by more than half those record levels seen in 2006. Despite this, however, employment growth and economic trends remain favourable for the Lethbridge region.
Economic growth in Lethbridge will occur in agriculture as most grain prices are up this year and producers face a promising crop yield.
Furthermore, the region will benefit from the manufacturing and commercial/retail sectors.
Following a record year in 2007, single-detached starts are forecast to decline by nearly 16 per cent to 775 in 2008. A further decline of ten per cent is expected in 2009 to 700 starts. Builders continue to pull-back production in the face of rising supply and with lower demand.
To the end of June, 422 single-detached foundations were poured, a decline of 13 per cent over the previous year. The amount of units under construction hit a record high in April of this year of 750 units.
Inventories have remained at or near record levels throughout the year, with 64 units completed and unabsorbed at the end of May 2008 up from 22 in May 2007.
In 2007, Lethbridge multi-family starts more than doubled the performance in 2006. The forecast calls for starts to weaken in 2008 to 175, and then strengthen to 225 units in 2009.
Due to a record number of single-detached starts in 2007 and continued elevated levels so far this year, sales on the existing home market are expected to decline in 2008.
New listings have increased as buyers of new homes have put their existing home up for sale.
However, with lower demand in the market, supply levels have increased over the first six months of this year. the forecast is for 2,300 sales at the end of 2008, while in 2009 sales are forecast to increase by three per cent to 2,375.
In 2007, the resale market in Lethbridge experienced record price growth. At the end of June, the average resale price reached $244,727, up nearly 11 per cent over the corresponding period last year.
The average selling price for this year calls for slower with an increase in the average resale price of eight per cent to $247,500.
In 2009, average price growth is expected to near four per cent with the average resale price ending the year at $256,500.
Despite a diversified economy, net migration into Red Deer is weakening -- and that could impact the pace of new home construction, says a federal agency.
A growing agriculture, expanding retail, wholesale, distribution and manufacturing industries, booming construction and a strong oil and gas market continue to drive the economy of the central Alberta city.
In May, major construction projects proposed, completed or under construction in the region stood at $2.9 billion, up 70 per cent from May 2007.
"However, net migration, one of the key drivers of household formation and housing demand, is weakening," says Richard Corriveau, Prairie region economist for Canada Mortgage and Housing Corp. "Moving into the forecast period, the weakening net migration will likely put a brake on the demand for housing."
After dropping by 11 per cent in 2007, single-detached starts are expected to drop another 59 per cent this year to 400 units. To the end of June, single starts fell by 69 per cent as builders prudently responded to rising inventories and huge selection in the competing resale market.
After reaching their second highest level in 21 years in 2007, multi-family starts will drop 40 per cent this year.
At the end of June, year-to-date multi-family starts were down 47 per cent. To reduce inventories in the face of a well-supplied competing resale market, builders will restrain the number of multi-family starts to 350 units this year.
Following five consecutive years of increases, resale activity should fall to 4,500 units in 2008, down 11 per cent from 2007. Year-to-date transactions fell by 22 per cent to the end of June 2008. A potential up tick in demand in the spring buying season of 2009 should also draw supply levels lower, and bring it back to balanced conditions. Expect sales to rebound to 4,650 units in 2009, up 3.3 per cent from 2008.
In the wake of a 32 per cent gain in 2007, the total average resale price is expected to rise by 5.4 per cent in 2008 to $285,000. Price pressure will ease further in 2009 with price growth being strongly held back by excess inventories. Look for prices to hit $295,000 in 2009, up 3.5 per cent from 2008, the weakest gain in 13 years.
The following is a look at some other areas in Alberta:
Grande Prairie
Currently the natural gas sector is a major driver of the Grande Prairie economy, but the industry slowed as inventory levels in North America reached a five-year high, causing gas prices to decline. In addition, the new royalty framework also introduced some uncertainty in the market.
The slowdown in the natural gas industry affected the economy in Grande Prairie and would eventually put a damper on housing demand.
The natural gas industry appears poised to recover in the latter half of 2008. However, the increased activity in the economy is not expected to make any major impacts to housing demand until 2009.
The city's forestry manufacturing industry has slowed with the downturn in the United States housing market, falling lumber prices, increased costs, and the rising Canadian dollar.
Inventory of lumber is also at elevated levels.
In 2007, single-detached starts in Grande Prairie ended the year with 784 units, down 26 per cent from 2006. The demand for housing has slowed from 2007, and inventories are currently at record levels.
Builders are pulling back starts in 2008 to allow the current inventory to be drawn down. Starts in 2008 are anticipated to fall to 400 units, down 49 per cent from a year earlier.
Multi-family starts reached a new record in 2007 at 839 units, up 49 per cent from 2006. Over the forecast period, multiple starts are expected to decline in response to the growing inventory on the market.
In 2008, starts are anticipated to drop by 79 per cent to 175 units.
The economic slowdown has also dampened activity on the MLS market. Sales fell from 3,017 in 2006 to 2,550 sales in 2007, representing a 15 per cent decline. In 2008, sales are expected to decrease by nearly nine per cent to 2,325 and rise by 3.2 per cent to 2,400 in 2009.
Following price growth of over 11 per cent in 2007, gains in the average resale price are expected to be minimal over the forecast period.
In 2008, the average price is expected to remain unchanged at $265,000, while in 2009 the average price is expected to increase by four per cent to $275,000. Price growth will improve next year in the face of more balanced conditions.
Lethbridge
Housing demand in this southern Alberta city is expected to be lower throughout the forecast period due largely to weaker population growth from net migration which is expected to decline in 2008 by more than half those record levels seen in 2006. Despite this, however, employment growth and economic trends remain favourable for the Lethbridge region.
Economic growth in Lethbridge will occur in agriculture as most grain prices are up this year and producers face a promising crop yield.
Furthermore, the region will benefit from the manufacturing and commercial/retail sectors.
Following a record year in 2007, single-detached starts are forecast to decline by nearly 16 per cent to 775 in 2008. A further decline of ten per cent is expected in 2009 to 700 starts. Builders continue to pull-back production in the face of rising supply and with lower demand.
To the end of June, 422 single-detached foundations were poured, a decline of 13 per cent over the previous year. The amount of units under construction hit a record high in April of this year of 750 units.
Inventories have remained at or near record levels throughout the year, with 64 units completed and unabsorbed at the end of May 2008 up from 22 in May 2007.
In 2007, Lethbridge multi-family starts more than doubled the performance in 2006. The forecast calls for starts to weaken in 2008 to 175, and then strengthen to 225 units in 2009.
Due to a record number of single-detached starts in 2007 and continued elevated levels so far this year, sales on the existing home market are expected to decline in 2008.
New listings have increased as buyers of new homes have put their existing home up for sale.
However, with lower demand in the market, supply levels have increased over the first six months of this year. the forecast is for 2,300 sales at the end of 2008, while in 2009 sales are forecast to increase by three per cent to 2,375.
In 2007, the resale market in Lethbridge experienced record price growth. At the end of June, the average resale price reached $244,727, up nearly 11 per cent over the corresponding period last year.
The average selling price for this year calls for slower with an increase in the average resale price of eight per cent to $247,500.
In 2009, average price growth is expected to near four per cent with the average resale price ending the year at $256,500.
Thursday, October 9, 2008
Region remains buyers’ market
By Harley Richards - Red Deer AdvocatePublished: October 03, 2008 7:49 AM
The Red Deer region remains a buyers’ market, says the president of the Central Alberta Realtors Association.
Plenty of listings, stable prices and steady mortgage rates has created a situation that’s “about as good as it gets” for home shoppers, said Randy Weins in a news release issued by the association on Thursday.
Weins’ assessment was based on Multiple Listing Service statistics for the third quarter of 2008.
It indicated that 400 single-family homes were sold in Red Deer from July to September, up from 344 during the same period in 2007.
The median price of those 400 homes was $324,000, down from $330,000 for the corresponding quarter last year.
In the case of townhomes, there were 76 sales with a median price of $233,000 during the past quarter in Red Deer.
That compares with 52 deals and a mid-point price of $239,000 for the July-to-September period of 2007.
In the case of half-duplexes, 55 sales with a median price of $266,000 were recorded in the most recent quarter. During the corresponding period in 2007, the figures were 53 and $275,000.
The news release said that Weins considers single-family sales to be the market benchmark.
Elsewhere in the region, the Central Alberta Realtors Association recorded 90 single-family home sales in Sylvan Lake during the third quarter, with the median price of these $325,000. That compares with 85 sales and a median price of $347,000 a year earlier.
In Lacombe, 38 single-family homes were sold, with the median price of these $316,000. That was down from 51 sales for the same period in 2007, when the median price was $307,000.
In Blackfalds, there were 29 single-family homes sold at a median price of $284,000 from July to September.
During those months in 2007, the figures were 31 and $296,000.
The association reported 28 MLS sales of single-family homes in Stettler in the last quarter, with these attracting a median price of $218,000.
The number of sales was unchanged from 2007, but the price a year ago was $236,000.
Ponoka had 25 sales of single-family homes during the past quarter, with $255,000 the median price. A year earlier there were 31 deals in this category, with the median price $243,000.
There were also 25 single-family homes sold in Rocky Mountain House between July 1 and Sept. 30. The median price of these was $290,000.
Last year, Rocky generated 32 sales of this home type, with the median price $291,000.
Innisfail produced 23 single-family sales with a median price of $269,000 during the same period this year. For 2007, the numbers were 33 and $302,000.
Weins suggested that sellers looking to close a deal on apartment condominiums or homes priced in the top 20 per cent of the market are probably having the toughest time.
“If your property is listed in the top end of your competitive price range then you can likely bring out the Christmas tree and put it up,” he said.
The inventory of homes are declining in most communities, added Weins. And he warned that prospective buyers should act before credit tightens and mortgage rates rise.
The Central Alberta Realtors Association has cautioned that general price information can help identify trends and provide comparisons over time, but may not reflect the actual price of a specific home.
The Red Deer region remains a buyers’ market, says the president of the Central Alberta Realtors Association.
Plenty of listings, stable prices and steady mortgage rates has created a situation that’s “about as good as it gets” for home shoppers, said Randy Weins in a news release issued by the association on Thursday.
Weins’ assessment was based on Multiple Listing Service statistics for the third quarter of 2008.
It indicated that 400 single-family homes were sold in Red Deer from July to September, up from 344 during the same period in 2007.
The median price of those 400 homes was $324,000, down from $330,000 for the corresponding quarter last year.
In the case of townhomes, there were 76 sales with a median price of $233,000 during the past quarter in Red Deer.
That compares with 52 deals and a mid-point price of $239,000 for the July-to-September period of 2007.
In the case of half-duplexes, 55 sales with a median price of $266,000 were recorded in the most recent quarter. During the corresponding period in 2007, the figures were 53 and $275,000.
The news release said that Weins considers single-family sales to be the market benchmark.
Elsewhere in the region, the Central Alberta Realtors Association recorded 90 single-family home sales in Sylvan Lake during the third quarter, with the median price of these $325,000. That compares with 85 sales and a median price of $347,000 a year earlier.
In Lacombe, 38 single-family homes were sold, with the median price of these $316,000. That was down from 51 sales for the same period in 2007, when the median price was $307,000.
In Blackfalds, there were 29 single-family homes sold at a median price of $284,000 from July to September.
During those months in 2007, the figures were 31 and $296,000.
The association reported 28 MLS sales of single-family homes in Stettler in the last quarter, with these attracting a median price of $218,000.
The number of sales was unchanged from 2007, but the price a year ago was $236,000.
Ponoka had 25 sales of single-family homes during the past quarter, with $255,000 the median price. A year earlier there were 31 deals in this category, with the median price $243,000.
There were also 25 single-family homes sold in Rocky Mountain House between July 1 and Sept. 30. The median price of these was $290,000.
Last year, Rocky generated 32 sales of this home type, with the median price $291,000.
Innisfail produced 23 single-family sales with a median price of $269,000 during the same period this year. For 2007, the numbers were 33 and $302,000.
Weins suggested that sellers looking to close a deal on apartment condominiums or homes priced in the top 20 per cent of the market are probably having the toughest time.
“If your property is listed in the top end of your competitive price range then you can likely bring out the Christmas tree and put it up,” he said.
The inventory of homes are declining in most communities, added Weins. And he warned that prospective buyers should act before credit tightens and mortgage rates rise.
The Central Alberta Realtors Association has cautioned that general price information can help identify trends and provide comparisons over time, but may not reflect the actual price of a specific home.
MLS® STATISTICS FOR THE MONTH OF SEPTEMBER 2008
MLS® STATISTICS FOR THE MONTH OF SEPTEMBER 2008
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
September 2008 185
September 2007 158
January 01, 2008 to September 30, 2008 $1,681
January 01, 2007 to September 30, 2007 $1,874
Value of City Residential Sales
September 2008 $57,131,828
September 2007 $50,490,982
January 01, 2008 to September 30, 2008 $521,081,795
January 01, 2007 to September 30, 2007 $577,939,315
Selling to Listing Ratio (CITY)
September 2008 69.03%
February 2008 55.16%
Prepared for the members of the Central Alberta Realtors® Association
City Residential Sales
September 2008 185
September 2007 158
January 01, 2008 to September 30, 2008 $1,681
January 01, 2007 to September 30, 2007 $1,874
Value of City Residential Sales
September 2008 $57,131,828
September 2007 $50,490,982
January 01, 2008 to September 30, 2008 $521,081,795
January 01, 2007 to September 30, 2007 $577,939,315
Selling to Listing Ratio (CITY)
September 2008 69.03%
February 2008 55.16%
Wednesday, October 1, 2008
Alberta leads slide in housing
Mario Toneguzzi, Calgary HeraldPublished: Wednesday, October 01, 2008
Alberta led all provinces in Canada with the biggest decrease in the average sale price for an existing home in August compared with a year ago, according to the Canadian Real Estate Association.
Statistics released Tuesday by the association show the average MLS sale price in Alberta dipped by 5.2 per cent to $343,148. The only other province experiencing a year-over-year price decline was British Columbia at 4.1 per cent to $421,685. At the national level, prices in August dropped by 4.6 per cent from a year ago to $290,347.
The association numbers also showed sales in Alberta were down 8.4 per cent from a year ago while new listings have dropped by 18.4 per cent.
Nationally, sales were down 21 per cent and new listings were off by 3.4 per cent. British Columbia saw a sales decline of 47.4 per cent.
"Slower activity in some of Canada's pricier housing markets compared to year-ago levels will continue weighing on the national average price," said Gregory Klump, the association's chief economist.
On a year-to-date basis until the end of August, Alberta MLS sales are down 22.7 per cent but new listings were up 9.9 per cent. The average sale price has increased by 0.2 per cent to $357,145.
Across the country, sales are down 14 per cent year-to-date compared with the same period in 2007 and new listings increased by 8.7 per cent. The average sale price has increased by 1.9 per cent to $309,698.
Every drop in the value of Canadian real estate elevates the level of anxiety about a U.S.-style housing meltdown in Canada, said CIBC World Markets economist Benjamin Tal in a research note.
"To be sure, house prices in Canada will continue to ease in the coming months. But the triggers that led to a free fall in Canadian real estate markets in the early 1990s and today in U.S. markets are nowhere to be found," wrote Tal.
"At this rate of growth in unit sales and new listings, by early next year the Canadian housing market will turn, for the first time since 1995, to a buyer's market."
Tal also said Calgary and Edmonton, where until recently homeowners doubled the value of their real estate "during the course of breakfast," are now seeing close to two and a half new house listings for every unit sold.
And with house prices in Alberta doubling since 2004, housing affordability has deteriorated to levels not seen since the early 1990s, added Tal.
Alberta led all provinces in Canada with the biggest decrease in the average sale price for an existing home in August compared with a year ago, according to the Canadian Real Estate Association.
Statistics released Tuesday by the association show the average MLS sale price in Alberta dipped by 5.2 per cent to $343,148. The only other province experiencing a year-over-year price decline was British Columbia at 4.1 per cent to $421,685. At the national level, prices in August dropped by 4.6 per cent from a year ago to $290,347.
The association numbers also showed sales in Alberta were down 8.4 per cent from a year ago while new listings have dropped by 18.4 per cent.
Nationally, sales were down 21 per cent and new listings were off by 3.4 per cent. British Columbia saw a sales decline of 47.4 per cent.
"Slower activity in some of Canada's pricier housing markets compared to year-ago levels will continue weighing on the national average price," said Gregory Klump, the association's chief economist.
On a year-to-date basis until the end of August, Alberta MLS sales are down 22.7 per cent but new listings were up 9.9 per cent. The average sale price has increased by 0.2 per cent to $357,145.
Across the country, sales are down 14 per cent year-to-date compared with the same period in 2007 and new listings increased by 8.7 per cent. The average sale price has increased by 1.9 per cent to $309,698.
Every drop in the value of Canadian real estate elevates the level of anxiety about a U.S.-style housing meltdown in Canada, said CIBC World Markets economist Benjamin Tal in a research note.
"To be sure, house prices in Canada will continue to ease in the coming months. But the triggers that led to a free fall in Canadian real estate markets in the early 1990s and today in U.S. markets are nowhere to be found," wrote Tal.
"At this rate of growth in unit sales and new listings, by early next year the Canadian housing market will turn, for the first time since 1995, to a buyer's market."
Tal also said Calgary and Edmonton, where until recently homeowners doubled the value of their real estate "during the course of breakfast," are now seeing close to two and a half new house listings for every unit sold.
And with house prices in Alberta doubling since 2004, housing affordability has deteriorated to levels not seen since the early 1990s, added Tal.
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