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COVID-19 is boosting home sales in Calgary suburbs, surrounding areas – will that momentum last?

With many people trading in their downtown commute for a home office due to the COVID-19 pandemic, proximity to the city centre has been less of a priority for house hunters this year.


In fact, a new emphasis on creating comfortable, productive workspaces within the home and the reduced importance of living anywhere near the office have increased buyer interest in areas just outside Calgary’s city limits – where prices are lower and space is plentiful.


While overall year-to-date home sales in Calgary are down compared to the same time in 2019, Airdrie, Cochrane and Okotoks have all recorded an uptick.


Resale activity grew by 12.5 per cent in Airdrie and 10 per cent in Cochrane, while Okotoks followed with a one per cent gain, according to data from CREB®.


Sales in these areas have been paced by the single-family segment, says Ann-Marie Lurie, CREB®’s chief economist.


In Airdrie, sales of detached homes, specifically, saw a 16 per cent increase during this time, while sales of detached homes in Cochrane grew by nine per cent.


Detached homes tend to have more square footage than other styles, a factor that has been top of mind for many recent homebuyers, says Tara Molina, a REALTOR® with RE/MAX Real Estate (Central).


“I’ve had clients where … the motivation was, ‘Now we are working from home, so we need a space where we can actually work from home,’” she said. “What I am finding from my buyers and sellers is they are looking to have a home that has multiple functions to it.”


Due to the government-mandated shutdown earlier this year, as well as the ongoing efforts many are making to keep their distance from others, homeowners are spending more time in their homes than ever before.

“Now your home is not just where you live, but also operates as your gym, office, school, restaurant and entertainment space,” said Molina.

“I think people are reacquainting themselves with the two-storey or bigger homes because you need to supplement the lack of space that we are able to get in the public now, with shutdowns and this new lifestyle that we are having to adjust to.”

“I feel there will be a bit of a shift in demand sometime down the road back to inner-city communities, once office spaces are back up and running and there’s a working vaccine that’s easily attainable and things like that.” – Jackson Cornelius, Urban Analytics

The quest for more living space without a higher price tag has made communities on Calgary’s edge a natural draw.

The year-to-date median price for homes of all types within the City of Calgary is $407,082. In comparison, the median price is $365,000 in Airdrie, $388,000 in Cochrane and $380,000 in Okotoks.


Looking at detached homes, specifically, the year-to-date median price in the City of Calgary is 17 per cent higher than in Airdrie for homes in this segment.


“Both Airdrie and Cochrane are more affordable, relative to what you can get in the city,” said Lurie. “And all of a sudden, if the concern over the commute isn’t as big anymore, because people aren’t commuting to downtown Calgary every day or that work schedule has changed, that also can influence how far people are willing to live from the (city) centre.”


Multi-family sales in the new-home market reflect elevated interest outside the city, as well.


There were 29 sales of multi-family units in Cochrane in the third quarter of this year, up 480 per cent from the previous quarter, according to Urban Analytics, a market research and advisory firm.


Airdrie, however, saw less traction in this segment, with its 19 multi-family sales last quarter marking a 49 per cent quarter-over-quarter decline.


“I think the attractiveness of a destination location has definitely picked up in response to COVID-19,” said Jackson Cornelius, consulting and advisory lead for Urban Analytics in Alberta.


“You see it a lot in Kelowna, (B.C.), and that’s why prices are increasing there. People are taking the stance that if they are going to be working from home, downsizing their office space, that they won’t need to be so close to the city centre.”


However, this is a pivot in consumer preference that might be short-lived.


“I feel like the office space will make a comeback,” said Cornelius. “I feel there will be a bit of a shift in demand sometime down the road back to inner-city communities, once office spaces are back up and running and there’s a working vaccine that’s easily attainable and things like that.” The strongest increase in activity Urban Analytics has seen this year has been in suburban communities on Calgary’s northern and southern edges, such as Seton and Evanston, he adds.


This reflects a broader trend of increased demand for resale homes in Calgary’s newer suburbs, located far from the inner-city and downtown core.


Leading the city in overall resale activity between Jan. 1 and the end of October were the southeast master-planned communities of Cranston (329 sales), Auburn Bay (282 sales) and McKenzie Towne (262 sales), according to CREB®.


Sales in Cranston represented a year-over-year increase of nine per cent, while the lake community of Auburn Bay posted a 17 per cent gain.

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For the sixth month in a row, sales in the Calgary market recorded a year-over-year gain.

Sales growth over the past several months has been the strongest seen in the past five years, but the activity has not been strong enough to offset the pullbacks from the spring. Year-to-date sales remain over three per cent lower than last year’s levels.

New listings continue to slow, reducing inventory in the market. On a year-to-date basis, new listings have eased by nearly ten per cent and are at the lowest level recorded since 2001. This has reduced the oversupply that has been impacting the market for nearly five years.

“The gains in sales in the latter part of this year have been a bit surprising considering the job losses and unemployment rate in our city,” said CREB® chief economist Ann-Marie Lurie.

“However, it is important to note that the shift to more balanced conditions has been mostly driven by the reduction of supply.”

Tighter conditions in the housing market have contributed to some of the recent gains in benchmark prices. As of November, the benchmark price was $423,600. This is nearly two per cent higher than last year’s levels.

However, conditions vary depending on price range. There is not a lot of supply for affordable homes in each product type because of high demand. This is likely causing differing price trends in the lower end of the market versus the higher end.


HOUSING MARKET FACTS

Detached

November sales activity improved across every district, contributing to a year-over-year citywide increase of 26 per cent. Improving sales over the past six months have helped offset some of the pullbacks from earlier in the year, as year-to-date sales were only two per cent lower than last year’s levels.

Like other sectors, inventory in the detached market has also eased due to the sharp decline in new listings. This has kept the months of supply below three months for the past three months. The tighter market conditions are supporting price gains. As of November, the detached benchmark price improved by nearly three per cent compared to last year for a total of $492,000. However, prices did not improve across all districts, as the City Centre continues to record prices that are one per cent lower than last year’s levels.

Activity for this product type does vary significantly depending on location and price range. The pullback in new listings relative to sales has caused significant reductions in inventory for homes priced below $500,000. Higher price ranges have also seen some declining inventory, but the degree of decline has not been as significant. In fact, the market is exhibiting sellers’ market conditions for homes priced below $500,000, while still favouring the buyer for homes priced above $700,000.


Semi-Detached

Year-over-year gains in sales were met with slower new listings, resulting in inventory reductions and a month of supply of three months. While conditions are not as tight in the semi-detached market as they are in the detached market, the reductions in supply relative to demand were enough to support further monthly gains in the benchmark price.

As of November, the benchmark price was $395,100, which is one per cent higher than last year’s levels. Activity did vary depending on location, as price gains were the highest in the South East district, while prices remained just below last year’s levels in the City Centre.

There have also been notable differences within this market depending on price range. The months of supply has declined significantly for product priced below $400,000. This decline is likely contributing to some of the differing price trends throughout the districts of the city.


Row

Year-over-year gains in the row sector continued in November and were enough to cause year-to-date sales to remain at levels similar to last year. Bucking the trend from other sectors, new listings rose compared to last year, easing some of the downward pressure on inventory levels. The months of supply stayed above four months, higher than levels seen in both the detached and semi-detached sectors, but a significant improvement from the nearly six months of supply recorded last November.

Row prices also showed signs of stabilizing, as November prices remained comparable to last year’s levels. Despite some of the monthly gains, on a year-to-date basis, prices remain nearly two per cent lower than last year’s levels and have eased across all districts except the City Centre, West and East.


Apartment Condominium

Following seven months of year-over-year declines, apartment condo sales improved over last year’s levels. However, last November was an exceptionally weak month for apartment sales. Year-to-date apartment sales totalled 2,209, a 13 per cent decline from last year and nearly 30 per cent lower than longer-term averages.

New listings did ease slightly this month, placing some downward pressure on inventory that was missing earlier in the year. However, inventory remains higher than last year’s levels and the months of supply is still elevated at nearly eight months. The oversupply in this market continues to place downward pressure on prices, which not only eased relative to last month, but remain one per cent lower than last year’s prices. The only district to see some positive momentum is the North, where prices rose slightly compared to last year.


REGIONAL MARKET FACTS

Airdrie

Sales continue to record strong gains in November as year to date sales reached 1,318 a 15 per cent increase over last year. The rise in sales was also met with a pullback in new listings causing further declines in inventory levels and keeping the months of supply just over two months. This is the tightest months of supply figure recorded for November since 2014 where the months of supply was below two months.

Persistently low months of supply, especially in the detached sector of the market continue to place upward pressure on prices. In November the benchmark price was $342,900, trending up over last month and over two per cent above last year’s levels.


Cochrane

For the sixth consecutive month sales active rose over last year’s levels causing year-to-date sales to total 651, a 12 per cent increase over last year. However, unlike other areas the level of new listings in Cochrane also rose. The months of supply rose to nearly four months. However, this is still relatively low for November as the town has typically averaged seven months over the past five years.

With generally tighter market conditions in the town prices have trended up for the past six months. As of November, the benchmark price was $417,800, four per cent higher than last year.  Despite the recent gains year-to-date figures remain nearly one per cent below last year’s levels.


Okotoks

Despite the decline in new listings, sales continued to improve causing further inventory declines.  Inventory in November dropped to 95 units, nearly half the levels we typically see this time of year.  With a sale to new listings ratio above 100 per cent and a months of supply of just over two months, this is one of the tightest Novembers recorded since 2014.

The general tightness in the market has been driven by the detached sector. This is the only category that has seen year-over-year gains in prices. As of November, the detached benchmark price was $441,100, nearly two per cent higher than last November.

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Avoiding Mortgage Payout Penalties

How Mortgage Payment Penalties Work

What we find most surprising when dealing with Sellers is that they rarely know how a mortgage prepayment penalty works. Either it was never explained to them. By either the mortgage broker, their bank, or their lawyer. Or, they never took the time to understand this important factor of mortgage payout penalties, when they first mortgaged their property.


In today’s interest rate environment, our clients are seeing some very severe penalties. This is due to a little-known clause on prepayments. The mortgage penalty is  applied on the basis of the greater, of the payment of 3 months of mortgage interest. Or applied as the interest rate differential – the IRD.

Closed Mortgage

When you elect to have a closed mortgage there are limited prepayment privileges. Which range anywhere from 5% to 25% of the principal of the mortgage on an annual basis. Typically there is also the option to increase your mortgage payment by a maximum amount each year. If you go above these limits you will likely incur a mortgage penalty. We typically see mortgage penalties being incurred either from a sale or a refinancing of the property.

Interest Differential

Understanding 3 month interest is simple enough to do. However, the interest differential is a little more difficult and of greater concern. Essentially, this is the difference in the amount of interest you would be paying for between the balance of the term of your mortgage and the amount of interest you would be paying if the interest rate were equal to the bank’s current posted rate for the balance of that term.


Seems innocent enough, except for the fact that we have seen interest differential penalties in the tens of thousands of dollars. This can and will potentially affect your return on your property. In some cases has resulted in Sellers having to pay money in order to sell their properties.

What Can Be Done About Mortgage Penalties?

What can you do about mortgage penalties? First, understand what the mortgage penalties are for the mortgage product you are contemplating. Second, understand what your purpose of buying a property is. Are you intending to sell the property relatively soon or hold on to it for longer? Match your term and mortgage product to your intentions. Third, engage your banker or mortgage broker in a full and frank discussion of what your needs are and how prepayment costs can be minimized.


Maybe the best advice of all is to understand what your penalty might be BEFORE you decide to sell or refinance your home.


If you need advice about your mortgage please contact me and I will put you in touch with our amazing mortgage broker who is a wealth of knowledge and will provide guidance on your path forward.


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With strong gains in the detached sector, October sales in the city reached 1,764 units. This is a 23 per cent increase over last year and well above longer-term averages.

The gain in citywide residential sales outpaced the growth in new listings, supporting tighter market conditions and improving prices.

“Over the past several years, higher lending rates and the stress test pushed many out of the detached housing market. However, recent declines in rates, combined with prices that are lower than several years ago, have brought back some of that demand,” said CREB® chief economist Ann-Marie Lurie.

“This is helping support more balanced conditions and price improvements in the market. However, price improvements are not occurring across all product type and price ranges and downside risk still hangs over future conditions.”

Improving sales over the past four months were not enough to offset the pullbacks in the second quarter, leaving year-to-date sales nearly six per cent below last year’s levels.

The same is also true for prices. Benchmark prices have trended up over the past four months and October prices were slightly higher than 2019. On a year-to-date basis, prices are one per cent lower than last year’s levels and nearly 10 per cent below previous highs.


HOUSING MARKET FACTS

Detached

Detached sales totalled 1,139 in October, a year-over-year gain of 35 per cent. Unlike earlier this year, October’s largest gains in sales occurred for homes priced above $600,000. Easing prices for more expensive homes could be supporting this rise in sales.
There were more new listings this month than levels recorded last year, but inventories still eased, causing the months of supply to drop below three months. This is a significant improvement from the four-plus months recorded over the past several years.
There is, however, significant variation by location and price range. Detached homes priced under $500,000 are reporting less than two months of supply, supporting some price gains depending on location.
When looking at price movements by district, the only city district to record further price declines was the City Centre. The South and South East districts recorded year-over-year price gains of around four per cent. Despite recent price movements, prices in all districts remain far from recovery and are well below previous highs.

Semi-Detached

Sales activity trended up over the last month and new listings eased. This is causing inventories to decline and the months of supply to fall to just above three months.

The tighter market conditions continued to support some monthly gains in prices. Despite these gains, the October benchmark price remained nearly one per cent below last year’s levels. However, activity varies significantly based on location. Year-over-year prices eased in the City Centre, North West and West districts, offsetting the price gains in the other districts.

Despite improvements over the past several months, year-to-date sales remain over six per cent below last year’s levels and over seven per cent below long-term averages. Slower sales activity has been mostly driven by pullbacks in the City Centre, North West, South, West and East districts of the city.

Row

There were significant year-over-year declines in the City Centre and West districts, but citywide row sales improved over last year’s levels and year-to-date activity sits only two per cent below last year.

Inventory remained relatively stable this month, keeping the months of supply around four months.

Citywide benchmark prices were $274,400 in October. This is a slight improvement over last month, but nearly six per cent below last year’s levels. The price decline was mostly caused by the significant drop in row prices in the West district of the city.

Apartment Condominium

For the seventh consecutive month, apartment condominium sales eased compared to last year’s levels, resulting in year-to-date sales of 1,999 units.

This represents a 15 per cent decline from last year and is nearly 30 per cent below longer-term averages. The only sector of this market showing signs of improvement is the under-$200,000 segment. Sales have improved in this segment, but it has not been enough to offset declines in all other price ranges.

Citywide sales have been easing, but new listings have been on the rise. This is causing year-over-year inventory gains and is halting positive momentum in prices. As of October, the benchmark price totalled $248,600, similar to last month and over one per cent below last year’s levels.

Overall, apartment condominium prices remain over 17 per cent below previous highs.

Airdrie

With significant gains in the detached sector, sales once again improved this month compared to last year. The increased activity contributed to the year-to-date sales of 1,199 units. This is a 13 per cent increase over last year’s levels.

The year-over-year gain in new listings was not enough to outpace the sales gains. As a result, inventories continue to trend down compared to the previous month and remain well below last year’s levels. This caused the months of supply to remain just above two months.

Citywide year-to-date benchmark prices remained relatively stable compared to last year. However, activity does vary by product type. Detached year-to-date benchmark prices have increased by one per cent, while prices in all the other sectors remain below the previous year’s levels.

Cochrane

Sales activity this month rose compared to last year’s levels, contributing to a year-to-date increase of nearly ten per cent. Meanwhile, new listings have not kept pace with sales, causing reductions in inventory and the months of supply, which dropped to three months.

Tighter housing market conditions are supporting price gains. Benchmark prices trended up for the fourth consecutive month and, as of October, were over two per cent higher than last year’s levels. Despite the recent gains, year-to-date prices remain one per cent below last year’s levels.

Okotoks

Improving sales in October were enough to push year-to-date sales up by one per cent. However, new listings contracted by a significant amount, causing inventory levels to ease and the months of supply to fall below two months.

Persistent tightness in this market is supporting further monthly gains in prices. After five consecutive months of rising prices, October benchmark prices rose above last year’s levels. However, price gains have been driven by improvements in the detached market.

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August Market Update

Total residential sales in August were relatively stable compared to last year with year-over-year gains in the detached and row sectors.These gains offset declines in the apartment and semi-detached sectors. The 1,573 sales recorded in August are consistent with levels over the past five years. Year-to-date sales activity remains nearly 13 per cent below last year.

“Recent national reports have shown a bounceback to new record levels over the past several months. Calgary has seen improvements over the lows recorded during the lockdowns, but is far from record levels,” said CREB® chief economist Ann-Marie Lurie. “We have started to see improvements in the job market compared to previous months, as some jobs start to return. The situation in Calgary has been slightly different, as the job losses were not isolated to sectors that are typically associated with rental demand. We have started to see improvements in the job market compared to previous months, as some jobs start to return.”

However, the impact of COVID-19 on the economy is not over.

“There have been more than 100,000 jobs lost since last year and Calgary’s unemployment rate sits at 15 per cent. This is well above the national average of 11 per cent,” said Lurie.

New listings are easing, which is helping to chip away at existing inventory compared to the higher levels recorded last year. However, the pace of year-over-year decline has eased, as inventory levels have trended up relative to levels recorded a few months ago.

The months of supply has also risen compared to the past few months and now sits at four months. This gain has slowed some of the monthly gains on prices. The residential benchmark price in August was $420,800, nearly one per cent lower than last year’s levels.

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1) INJECT SOME COLOUR


If you’re going to be spending a lot of time in your yard, some visual interest is key. Bold colours are great for the outdoors and there are many ways to incorporate them into your space. Flowers are one of the cheapest and most popular ways to add colour, whether in the form of annuals in pots or perennials in your garden beds that will come back year after year. You can also add colour through your furniture and accent choices, including seat cushions, throw pillows, outdoor rugs, and painted pergolas or trellises.


2) UP-GRADE YOUR FURNITURE

If your patio set is a couple decades old, it might be time for an upgrade. Opt for new patio furniture with weather-resistant cushions, whether you’re looking for a dining set or bench seats for lounging. Brightly coloured Adirondack chairs are a popular option that deliver big cottage-vacation vibes in either wood or plastic. If you want to take your backyard relaxation to the next level, a hammock, secured between two trees or on a stand, is the perfect place to read a book or nap in the shade.


3) BUILD WALKWAYS


A new stone or wood walking path has several benefits, from the practical to the aesthetic. It will look good, blend in with the natural feel of the space and tie everything together, all while helping people to get around without trampling grass and garden beds. Here’s how to get started on a walkway of your own.


4) UP YOUR LIGHTING GAME


If you’re planning to enjoy your backyard well into the evening, lighting is a must. String lights can be attached to existing structures, such as pergolas, walls or railings, while rope lights can be used to illuminate pathways. Lanterns are also a popular option – there are lots of DIY ideas out there if you’re looking for inspiration.


5) STORAGE SOLUTIONS


From gardening tools to yard games, there is plenty of “stuff” in the average yard that often ends up strewn all over the place without dedicated storage. That’s where a small shed or storage bench comes in. The latter can even serve as additional seating if not in use, either as is or with a couple cushions thrown on top for added comfort.


6) FIRE IT UP


For many people, a fire pit is a backyard essential for the summer months. If you don’t have one already, don’t fret. There are relatively inexpensive store-bought options and it’s also easy to build your own with minimal materials and knowhow. You’ll be ready to roast some marshmallows in no time.

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After three months where COVID-19 weighed heavily on the housing market, sales activity in June continued to trend up from the previous month, totalling 1,747 units.


Caution remains necessary, as monthly sales are nearly two per cent lower than activity recorded last year. However, this represents a significant improvement compared to the past several months, where year-over-year declines exceeded 40 per cent.


“Recent price declines, easing mortgage rates and early easing of social restrictions are likely contributing to the better-than-expected sales this month,” said CREB® chief economist Ann-Marie Lurie.

“However, the market remains far from normal. Challenges, such as double-digit unemployment rates, will continue to weigh on the market for months to come.”


New listings in June totalled 3,335 units, a six per cent increase over last year. The recent rise in new listings caused inventories to trend up, but they remain well below last year’s levels.


Despite some recent monthly gains in supply, sales activity was high enough to cause the months of supply to dip below four months for the first time since May 2019. If this trend continues, it should help to ease the downward pressure on prices.


Residential benchmark prices are comparable to last month, but they remain nearly three per cent lower than last year’s levels.


HOUSING MARKET FACTS

Detached

  • Sales activity in June totalled 1,092 units. This is an improvement over the past few months and only slightly lower than last year’s levels.
  • Despite citywide declines, year-over-year sales activity improved in the City Centre, North East, North, South East and East districts.
  • June also saw an increase in new listings, which is causing some monthly gains in inventory. However, increased sales offset the rise in new listings, causing the months of supply to trend toward more balanced conditions.
  • Detached benchmark prices remained relatively stable compared to last month but were two per cent lower than last year’s levels. Year-over-year price declines were recorded across most districts, with the largest declines in the North West, North East and City Centre districts.

Apartment

  • Apartment sales totalled 227 units in June. This is an improvement from the 136 units last month, but it is still nearly 13 per cent lower than last year’s levels and over 30 per cent lower than longer-term averages.
  • New listings rose compared to last month and last year. This did translate into some monthly inventory gains, but overall inventory levels remain lower than last year’s levels.
  • The months of supply has come down from the high levels recorded over the past few months.
  • Benchmark prices continued to trend down this month, totalling $240,900. This is a year-over-year decline of nearly four per cent.
  • The resale apartment sector continues to be one of the hardest hit in terms of relative declines in both sales and prices.

Attached

  • The attached sector has faced the smallest impact from the pandemic. June sales were nearly three per cent higher than last year’s levels and remain comparable to longer-term averages. The attached sector has generally benefited from its status as a more affordable alternative to the detached sector.
  • Like the detached sector, the attached sector saw new listings rise compared to both last year and last month. However, the months of supply trended toward more balanced conditions and improved over last year’s levels.
  • Benchmark prices remained relatively stable compared to the previous month, but fell by nearly four per cent compared to last year. The higher price decline in this sector could be a contributing factor to the improving sales activity.

REGIONAL MARKET FACTS

Airdrie

  • Following declines over the past three months, June sales rose above last year’s levels. While the monthly gain was significant, it was not enough to offset previous pullback, as year-to-date sales remained nearly eight per cent below last year’s levels.
  • Airdrie also saw new listings rise, but inventory levels remain well below last year’s levels. The months of supply dropped below three months and is lower than pre-COVID-19 levels. If the supply/demand balance stays in this range, we could start to see some of the downward price pressure ease.
  • Airdrie’s benchmark price was $327,400 in June. This is down compared to the previous month and over two per cent lower than last year’s levels. Year-to-date prices remain just below last year’s levels.

Cochrane

  • Sales in Cochrane this month improved over last year’s levels. At the same time new listings also rose, causing some growth in inventory levels. However, the improvement in sales outpaced the gains in inventory, causing the months of supply to trend down.
  • Supply/demand balances are improving, but it takes time before this is reflected in prices.   In June, the benchmark price was $394,900. This is slightly lower than last month and nearly four per cent lower than last year. It will likely take several more months of more balanced conditions before seeing any impact on home prices.

Okotoks

  • June sales remained relatively stable compared to last year’s levels. However, with steep declines in April and May, year-to-date sales remain well below both last year’s levels and longer-term trends.
  • Recent gains in new listings caused some monthly gains in inventory levels. The monthly gain in inventory was not enough to offset the monthly increase in sales, causing the months of supply to trend down to three months in June.
  • Benchmark prices were falling prior to the COVID-19 pandemic, but the pace of decline increased during the past several months. In June, benchmark prices remained relatively stable compared to last month, but they remain over four per cent lower than last year’s levels.
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After the first full month with social distancing measures in place, the housing market is adjusting to the effects of COVID-19.

April sales hit 573 units, a decline of 63 per cent over last year. “The decline in home sales does not come as a surprise. The combined impact of COVID-19 and the situation in the energy sector is causing housing demand to fall,” said CREB® chief economist Ann-Marie Lurie. “Demand is also falling faster than supply. This is keeping the market in buyers’ territory and weighing on prices.” Sales activity eased across all price ranges, but the largest declines were for homes priced above $600,000.


With a greater share of the sales occurring in the lower price ranges, the average price decline was more than eight per cent. Prices for the average home are also declining, reflected by the benchmark price, which fell by nearly two per cent compared to last year.


New listings this month totalled 1,425 units, a decline of 54 per cent compared to last year. Inventories also declined, but with 5,565 units available, they remained high enough to push the months of supply above nine months.

The economic impact of the situation is significant and early indications point toward more job losses and higher unemployment rates. Several government incentives will help cushion the blow, but challenges in the housing market are expected to persist throughout this year.


HOUSING MARKET FACTS

Detached

  • Detached sales eased by 63 per cent this month compared to last year, with the largest decline in the West district.
  • Slower demand was also met with easing supply, as new listings declined by 57 per cent. Overall, inventories eased by 25 per cent compared to last year. Despite the decline in inventory, the months of supply rose to more than eight months.
  • The detached benchmark price eased by one per cent over last year, totalling $479,100. Prices managed to remain flat in both the South and South East districts. The highest price decline was in the City Centre, with a drop of more than three per cent.

Apartment

  • Apartment sales slowed to 95 units. This is a 62 per cent decline over last year. New listings also slowed, but it was not enough to support a larger decline in inventory levels, which only eased by 13 per cent compared to last year. With 1,349 units in inventory, the months of supply rose to 14 months.
  • Condominium prices were falling before recent developments in the market and the pace of decline remained relatively unchanged at more than two per cent compared to last year. Since the first energy crisis in 2014, the citywide apartment benchmark price has declined by nearly 19 per cent.
  • Year-over-year prices have eased across almost all districts, but the South East district saw the largest year-over-year decline this month at nearly six per cent.

Attached

  • Semi-detached and row properties recorded a significant drop in sales and new listings, causing inventories to decline by nearly 20 per cent. However, with a combined inventory of 1,441 units compared to just 138 sales, the months of supply rose to over 10 months.
  • Semi-detached prices eased across all districts for a citywide year-over-year decline of nearly three per cent. The City Centre recorded the largest year-over-year decline at four per cent.
  • Row priced declined in all areas except the East district. Citywide row prices declined by more than two per cent for a total of $278,300.

REGIONAL MARKET FACTS

Airdrie

  • Sales in Airdrie slowed to 60 units in April. This decline in sales was met with a similar decline in new listings, which totalled 107 units. This helped reduce inventory levels, but with 407 units still in inventory, the months of supply rose to nearly seven months.
  • Overall, the benchmark price remains comparable to last year. Average prices have declined, but some of this is due to more homes being sold in lower price ranges, as there was a significant decline in sales for homes priced above $500,000.

Cochrane

  • April sales in Cochrane dropped to 29 units. This is 55 per cent below levels recorded in the previous year. However, new listings also eased. With only 61 new listings in the market, inventories declined to 281 units.
  • Prices were easing before social distancing measures were put in place and April’s benchmark price totalled $398,900. This is nearly two per cent lower than last year. However, both the median and average price rose compared to last year. This is likely due to more homes being sold in higher price ranges, as there were no sales recorded in the lowest price range.

Okotoks

  • Both sales and new listings dropped, with totals of 17 and 44 units, respectively. Inventory remained well below last year’s levels, but weaker demand pushed up the months of supply to nearly 12 months.
  • Prices were trending down from the start of the year, but levels have remained relatively stable compared to the previous year. In April, the benchmark price continued to trend down, totalling $402,300.
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After a strong start to 2020, economic conditions have dramatically changed, as COVID-19 is impacting all aspects of society.

The economic impact is starting to be felt across many industries. This includes the housing market.

March sales activity started the month strong, but quickly changed, as concerns regarding the spread of COVID-19 brought about social distancing measures. This had a heavy impact on businesses and employment.

“This is an unprecedented time with a significant amount of uncertainty coming from both the wide impact of the pandemic and dramatic shift in the energy sector. It is not a surprise to see these concerns also weigh on the housing market,” said CREB® chief economist Ann-Marie Lurie.


By the end of March, sales activity had fallen 11 per cent compared to last year. This is 37 per cent lower than long-term averages. The drop in sales pushed March levels to the lowest recorded since 1995.


“The impact on the housing market will likely persist over the next several quarters,” said Lurie. “However, measures put in place by the government to help support homeowners through this time of job and income loss will help prevent more significant impacts in the housing market.”


New listings dropped by 19 per cent this month. This decline in new listings compared to sales caused supply levels to ease and helped prevent a larger increase in oversupply. Overall, the months of supply remain just below five months, similar to levels recorded last year.


Prices were already forecasted to ease this year due to oversupply in our market. In March, the citywide benchmark price was $417,400. This is nearly one per cent lower than last year’s levels. The reduction in both sales and new listings should help prevent significant price declines in our market.


However, price declines will likely be higher than originally expected due to the combined impact of the pandemic and energy sector crisis.


HOUSING MARKET FACTS

Detached

  • Detached sales eased by 15 per cent this month, driven by pullbacks in all districts except the North, which remained flat compared to last year.
  • The decline in sales was met with a larger decline in new listings, causing inventories to fall by 17 per cent and keeping the months of supply slightly lower than last year’s levels.
  • Detached benchmark prices have remained relatively unchanged compared to last year at $480,800. Price declines this month continue to be the highest for the City Centre, North East and West districts.

Apartment

  • With 217 citywide apartment sales in March, this was the only category to record a year-over-year gain. Much of the gain was due to improving sales in the South, South East and North West districts.
  • New listings this month did ease, helping support a small decline in inventory levels.
  • Persistent oversupply has resulted in continued downward pressure on prices. In March, the citywide benchmark price eased by more than two per cent compared to last year for a total of $243,700.

Attached

  • Both semi-detached and row sales declined this month compared to last year. Like the other property types, there was also a significant reduction in new listings.
  • The decline in new listings helped push down inventory levels for both property types, but it was not enough to prevent a rise in the months of supply.
  • However, this segment was oversupplied prior to the recent changes, impacting prices. As of March, prices remained nearly one per cent lower than last year’s levels for both semi-detached and row properties.

    REGIONAL MARKET FACTS

    Airdrie
    Like many other areas, Airdrie saw a decline in sales activity, along with a reduction in new listings and inventory. The reductions in supply and demand helped prevent any significant changes to the months of supply. While the full impact of the COVID-19 crisis has not yet played out in the housing market, March prices remained comparable to last year’s levels.

    Cochrane
    Both sales and new listings fell this month compared to last year, causing inventories to fall to the lowest levels in five years. Like many other markets, Cochrane remains oversupplied, with easing prices.
    The March benchmark price was $398,700. This is nearly two per cent lower than the previous year.

    Okotoks
    Trends changed this month, with flat sales and a decline in new listings. The decline in new listings was enough to cause a significant reduction in supply levels and the months of supply fell below five months.
    Prices are trending down on a monthly basis, but remain comparable to last year’s levels, with a March benchmark price of $405,000.
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My First Home - Lanny McDonald

Iconic status was off in the future for the 22-year-old winger. The bushy moustache had yet to grow out and become a trademark.


“We bought our first home year three in Toronto,” said Lanny McDonald, reminiscing. “We’d just gotten married. The house was out in Port Credit. Mineola Street, I believe. A bungalow that had a bonus room up above the garage and it was the scariest thing in the world. Oh my gosh. I think it cost $125,000. We were making a good living, certainly no complaints, but buying a first house is frightening. Luckily, it turned out to be absolutely awesome."


“Darryl (Sittler) lived just down the way, on Mississauga Road. Wendy (Sittler) and (my wife) Ardell became great friends. Darryl and I would drive into the games and practices together. We had a great time in that first house. But that commitment … signing your name? Oh my God!”


For McDonald – the Hockey Hall of Famer and 1989 Stanley Cup champion whose iconic No. 9 was retired by the Calgary Flames in 1990 – his number-one priority in a home never changes.


“For me, it has to have the biggest kitchen and family room, attached if possible, because that’s where everyone spends the bulk of their time,” he said. “You’re hanging out over the kitchen counter with the kids. Enjoying a few drinks with friends. There’s laughter, there's conversation. The family room/kitchen area is the hub.”


The McDonalds have owned homes at four different addresses. “We purchased two houses in Toronto,’’ he said, “then we go to Colorado and rent the first year-and-a-half. So I talk with the owners, looking for a little security lifestyle-wise, and they say, ‘You’re not going anywhere. You’re here for life.’ Great. We buy a new house out in a new area and, you guessed it, I’m traded to the Flames two-and-a-half months later! We hadn’t even finished the yard.”


Since arriving in Calgary in November 1982, the family has resided in Springbank, renovating their property four times rather than packing up to relocate.


“It’s been fabulous,” he said. “All our kids went though the school system in the area. The boys played hockey. And now our grandkids have moved back from Montana and they’re attending Springbank and The Edge. Talk about coming full circle.”


Through the intervening years, an older McDonald, now chairman of the Hockey Hall of Fame, has occasionally returned to his residential roots on Mineola Street.


“They’ve bulldozed all the houses there and built mansions,’’ he said, laughing. “I wish we still had the lot because you’re probably talking about $2-to-$2.5-million homes now. I mean, $125,000 sure won’t buy you much there today.”

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This month saw a double-digit gain in sales, but last February was one of the slowest levels of activity since the late ’90s.

With the extra day this February, monthly sales totaled 1,197 units.  A combination of these two factors resulted in a 23 per cent improvement over last year, but sales remain well below longer-term trends and consistent with the lower levels reported over the past five years.

“However, this should not diminish the fact that conditions are still improving,” said CREB® chief economist Ann-Marie Lurie.

“Calgary is continuing to see slow reductions in the amount of oversupply in the market, from modest changes in demand and reductions in supply. This needs to occur before we can see more stability in prices.”

The overall unadjusted benchmark price was $416,900 in February. This is similar to last month, but nearly one per cent below last year’s levels. Overall, prices remain nearly 11 per cent below the monthly high recorded in 2014.


HOUSING MARKET FACTS

Detached

  • After the first two months of the year, detached sales improved by nearly 12 per cent. Improvement did not occur across all districts, as sales continued to ease in the City Centre, North East and North West districts.
  • Driven by pullbacks mostly in the south and west districts, new listings declined by one per cent in the city so far this year.
  • Improving sales and easing new listings helped reduce inventory levels and reduced months of supply to just below four months in February. This is a significant improvement over the more than five months recorded last February.
  • The benchmark price continued to trend down this month for detached homes, but the pace of decline is easing. Citywide detached prices remain less than one per cent lower than last year’s levels, but price movements vary significantly by district, ranging from a three per cent decline in the City Centre to a two per cent increase in the South district.

Apartment

  • For the second month in a row, improving sales were met with gains in new listings. This is causing inventory gains.
  • Sales levels were high enough to cause the months of supply to ease, but the persistent oversupply in the market continues to weigh on prices.
  • February benchmark prices eased compared to the previous month and is over two per cent lower than last year’s levels. The overall benchmark apartment price of $244,700 in February is nearly 19 per cent lower than 2014 monthly highs.

Attached

  • After the first two months of the year, rising attached sales and easing new listings caused inventories to decline.
  • February months of supply is now below five months, an improvement compared to the past two years.
  • Conditions continue to favour the buyer, but improvements have helped reduce the downward pressure on prices. However, divergent activity continues based on location, as prices declined across most districts, but improved in the West, South East and East districts of the city.
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While lower Months of Inventory will lead to more balanced markets and stabilized pricing, we have noticed that the properties being sold have had an increased average price of 4% in Alberta to $375,649 from $361,131 in January 2019. Since the current Months of Inventory, and the number of sales in January do not support a market where we would see significant movement in price, it is primarily due to movement in the higher price ranges that is having this effect on pricing. The 6.3% increase in the average price for sales in Edmonton, and a 4.8% increase in the average price for sales in Red Deer had a big part in that jump upwards for the Province.
 
The sales activity in the higher price points is consistent with the showing activity that we have had for CIR's listings.  The month over month showings have continued to rise and we anticipate this to continue into Spring. The showing activity that has had the largest gains, is in the $500,000 to $800,000 price points, the move up markets. We have been anticipating the move up markets to start performing better as the lower price points had picked up activity in 2019.
 
The activity that we are seeing is closer to normal for the ten year averages, but is still a bit lower than average.  It appears that people are adjusting expectations to the "new normal", and confidence is continuing to return to the markets. Since Alberta's economy continues to outperform most of Canada for weekly earnings and opportunity, we are seeing the net migration into the Province continuing to increase. This has resulted in the rental markets continue to tighten, which will end up driving buyers and investors into the markets as well as help our move up markets as the first time buyers enter the market. We are also watching the unemployment rate which was seeing a drop through the Fall months of 2019, but has since started rising again in December and January.  There appears to be a lag of six months in the Real Estate markets to the employment markets, so we will continue to monitor the migration and employment trends.
 
All of this said, we are very happy with the results in January 2020. While the Province had an increase in sales of 4%, CIR Realty experienced an increase in sales of 15.6%!  Our agents continue to focus on educating clients on making good decisions to help them achieve their goals in Real Estate.
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