How Bad Is The Housing Market In Calgary?

I am a Realtor, so by nature I am an optimist. Every day I get questioned about how bad the re-sale home market is in Calgary. Every day I respond that while it is pretty rough out there, it’s not as bad as some pessimists would have you believe. Here are some of my opinions on where the market is and where it is going. I will strongly caution that anybody who tells you that they KNOW what the market is doing is a charlatan, delusional, or both.

The re-sale home market is not nearly as bad as it feels. While home sales are off by over 25% year over year and almost 40% November 2007 compared to November 2007, the average selling price has only dropped by 2.5% year over year and 5.7% compared to last November. To me this indicates that there is significant resilience in home prices in Calgary, that the bottom has not fallen out of the market. It also indicates that there is an acceleration of price reductions happening, with the economy suffering and nobody seeming to know how to go about fixing it, no wonder people are running scared. There are a lot of price reduction and distressed selling situations out there, that is fact. The problem is that the bad news makes news, the good news gets buried.

Here is the rub, we don’t generally buy Real Estate as a short term investment. The vast majority of people buy a home to live in, raise a family, and so on. Our statistics indicate that the average length of time to own a single home is approximately five years. We must think longer term or we are in danger of scaring ourselves insane.

The average single family home in Calgary in November of 2008 is $461,497

The average single family home in Calgary in November of 2007 was $473,153 (+2.5%)

The average single family home in Calgary in November of 2006 was $408,581 (-6.2%)

The average single family home in Calgary in November of 2005 was $303,160 (-30.4%)

The average single family home in Calgary in November of 2003 was $245,658 (-43.6%)

By this logic, if I had bought five years ago and sold today my home has increased in value by 43.6%! Nothing to be ashamed of, as a matter of fact the only owners really taking a hit are those that bought for the short term (flipping) during mid-2007 and now have to sell, they projected a continued increase in property value that has no yet materialized, but their carrying cost are killing their bottom line.

I am an optimist, as I said earlier. I believe that with so many smart people focused on the economy, they will find solutions for the current malaise. While I do not think that we are going to get back to a market like 2005-2007, I do think that the market will fairly quickly return to a sustainable level of activity and growth. Calgary was affected more by over-enthusiasm (read as speculation) than by outside markets, leading to an extreme number of available listings which are now being absorbed back into the marketplace as building activity slows. My prediction is that we will see a stabilization in prices and return to a balanced market by the end of the first quarter of 2009.

We may have already seen the bottom of the market, a hard thing to do is recognize a bottom, since you have to be past it to see the change in trend. One week into December I can tell you that the prices and number of sales are off by less than November was, and may indicate the start of a reversal in the market, but it is still early. December is traditionally a slow month, and this year the conditions are ripe to make it a great time to buy, I believe that if we are not at the bottom, we are very close to it and a buying decision made now could pay huge dividends down the road a little. The one caveat, buy longer term, think in five year terms, not one year.

The Real Estate Market in Calgary is not really that bad, it just requires more thought and planning than in the last couple of years.

 

Calgary, December 1, 2008 – MLS® sales activity shows typical seasonal slowdown, as the end of 2008 approaches, according to figures released by the Calgary Real Estate Board (CREB®). 

 

Single family Calgary metro sales for the month of November totaled 670, showing a decrease of 39.3 per cent from the 1,103 sales in November 2007 and showing a decrease of 18.3 per cent from last month’s sales of 820. Condominium sales for the month of November were 284, a decrease of 42.7 per cent from the 496 condominium sales recorded in November 2007 and showing a decrease of 29 per cent from October 2008 when 399 condominiums changed hands. 

 

“We’re coming into the homestretch, with just one month left in 2008. Market activity typically slows down during the end of any year, however, this isn’t a typical market, so the slow down that we’re seeing is somewhat magnified. This is due to uncertainty amongst consumers and it isn’t just affecting real estate, it’s affecting all consumer spending,” commented President, Ed Jensen. “I’ve said it before and I’ll say it again, now is a great time to buy for bargain hunters and buyers who intend to buy long term; it is not a market for home flip buyers. Prices have come down and there are excellent deals to be had.” Jensen, concluded. 

 

The average price of a single family Calgary metro home in November 2008 was $435,471, showing a decrease of 5.8 per cent from November 2007, when the average price was $462,134, and showing a decrease of 3 per cent from October when the average price was $449,100. The average price of a Calgary metro condominium was $285,820, showing an 8.6 per cent decrease from November 2007 when the average price was $312,710, and showing a decrease of 1.2 per cent over last month, when the average price was $289,148. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differentials between geographical areas. 

 

Single family Calgary metro new listings added for the month of November totaled 1,567, a decrease of 19.6 per cent from November 2007, when new listing added totaled 1,949 and a decrease of 32.5 per cent from last month, when new listings coming to the market were 2,322. Calgary metro condominium new listings added in November 2008 were 741, showing a decrease of 16.7 per cent from the 890 new condominium listings added in November 2007 and a decrease of 30.8 per cent from last month’s condominium listings of 1,071. 

 

The median price of a single family Calgary metro home in November 2008 was $387,300, showing a decrease of 5 per cent from November 2007, when the median price was $407,500 and down 0.7 per cent from last month when the median price was $390,000. All Calgary Metro MLS® statistics include properties listed and sold only within Calgary’s City limits. The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period of time. During that time, half the buyers bought homes that cost more than the median price and half bought homes for less than the median price. 

 

The Calgary Real Estate Board is a professional body of 5,498 licensed brokers and registered associates, representing 249 Member offices. The Board does not generate statistics or analysis of any individual member or company’s market share. All MLS® active listings for Calgary and area may be found on the Board’s website at www.creb.com.

I’ve been patiently waiting for somebody to go out on a limb and give me some insight as to what affect the economic turmoil on the world stock markets will have on the Real Estate market in Calgary. I’ve asked everyone that I know in positions of knowledge and have had a hard time getting beyond a shoulder shrug and a quick change of subject. So with some trepidation I find myself climbing out on that limb while keeping an eye carefully out for anybody with a chain saw. It is Wednesday evening, October 8, 2008 as I write this, and I have been heartened by today’s financial developments. For once, and it may be unique in history, most of the main players are pulling in the same direction! I think that this fact alone bodes well for avoiding any further melt down. The lowering of mortgage interest and injection of liquidity into the markets will help real estate. Here is my prediction: We are at the bottom. I believe that in the next few days the consumer will realize that the Real Estate market has been stabilized and buying will restart. With buyers entering the market it will quickly affect home values and selling times, within a couple of months we will see the release of pent-up demand that exists in Calgary. Calgary has very strong base economics, but with prices dropping over the last few months buyers have been reluctant to enter the market. As soon as the general public starts to see that the bottom has been reached there will be a relatively quick recovery of strength in our market. To be clear, I don’t mean that suddenly our home values will jump by a large percentage, just that we will return to a regime where sales and prices will be more balanced than they have been recently. What does this mean? It’s a good time to buy in Calgary.

The community of South Calgary is located in the southwest quadrant of the city and consists of the neighbourhoods of Marda Loop, Garrison Woods, Altadore, and Riverpark.

The South Calgary area was annexed by the City in 1907 but remained undeveloped until the early 1950s.

The area offers picturesque views of both the city and the mountains. The South Calgary area also contains a variety of styles of housing, reflective of its 50-year development.

In addition, the Marda Loop area has served as a business revitalization area, enhancing the commercial areas of the community.

The South Calgary Community Association has a variety of resources available for residents. The community’s outdoor pool, tennis courts and two skating rinks (which become beach volleyball courts in the summer) offer recreational opportunities to residents. Various sports teams and a play group also operate through the community association.

The community centre is also used by a variety of outside groups, ranging from catering groups who make use of the centre’s commercial kitchen, to organizations such as the miniatures club, orchid society and doll enthusiasts. The community association also makes an effort to address issues of concern to residents, and is currently developing a traffic committee to address traffic concerns facing the rapidly developing area.

Schools

King Edward Elementary and Junior High - Public

Altadore Elementary - Public

Calgary Waldorf School - Private

Glenmore Christian Academy - Private

Lycee Louis Pasteur - Private

Demographics

Located in Ward 11, Altadore has a population of 8,175, according to the 2006 Civic Census with approximately 11.9% comprising the immigrant population. A total of 800 families accounted for 1,280 children still living at home with 37.1% of these being six to 14 years old.

According to Statistics Canada, the median household income for Altadore in 2000 was $53,786. In addition, 66.8% of the population over 20 completed college, attended university or graduated university with a degree. An additional 11.2% graduated from trade schools.

There are a total of 2,820 occupied private dwellings in Altadore with 47.5% being single detached dwellings (Statistics Canada, 2001 Census of Canada).

The neighbourhood of Hillhurst is located in Calgary’s inner city, northwest of and across from the Bow River and is not to be confused with West Hillhurst, a community immediately to the west.

Established in the early 1900s, Hillhurst is one of the older communities in Calgary. An important event in the history of the area was the construction of the Mewata Bridge over the Bow River in 1954.

This turned 14th Street into a major link to downtown and initiated commercial redevelopment of the housing in the area. Hillhurst, Sunnyside and the nearby business district of Kensington, have since been enhanced through the efforts of the Business Revitalization Zone Association.

The residents of Hillhurst and Sunnyside share their community association, which is active in providing programming for its residents.

Sports are an important aspect of the community. The soccer pitches, ball diamonds and tennis courts in Hillhurst Athletic Park are well used by local children. In the winter, indoor soccer in the community association gym is well attended.

The Bow Valley Lawn Bowling Club, which has been established in the community for decades, attracts adults of all ages.

Schools

Hillhurst Community School - Public

Queen Elizabeth Elementary School - Public

Queen Elizabeth Junior and Senior High - Public

St. John’s Elementary (Fine Arts) - Separate

SAIT - Post Secondary College

Demographics

Located in Ward 7, Hillhurst has a population of 5,288 (2006 Civic Census) with approximately 15.3% comprising the immigrant population, according to Statistics Canada.

A total of 610 families accounted for 880 children still living at home with 33.5% of these being six to 14 years old. The median household income for Hillhurst in 2000 was $50,822. In addition, 78.6% of the population over 20 completed college, attended university or graduated university with a degree. An additional 6.5% graduated from trade schools.

There are a total of 2,425 occupied private dwellings in Hillhurst with 43.7% being single detached dwellings, 6.2 semi-detached homes, 1.6% row housing, and 48.2% apartment or detached duplex and 52% of the occupied dwellings are rented.

Temple is located in northeast Calgary.Although the area was annexed in 1961, it did not develop until 1977. Temple–along with neighbouring communities of Pineridge, Rundle and Whitehorn–was originally referred to as “The Properties.”

Nearby recreational opportunities include the Village Square Leisure Centre and regional bike paths. There are also a number of schools in the area.

The Temple community hall contains both large and small meeting places that play host to a variety of community groups. The Brownies, Cubs, Scouts, first aid, babysitting courses and a preschool are just a few of the groups and activities that take place in the hall.

The community association also maintains a tennis court, an all season rink and a basketball court. A number of sports programs are facilitated through the community association, including a popular adult slo-pitch league.

Temple also hosts a number of special events, including monthly dances for adults and jellybean dances for children.

The popular Temple Days, consisting of family fun events, take place annually at the beginning of June.

Temple is also a participant in SAIT’s Community Access Program, which enables residents to access the Internet.

Temple was also involved in starting the Heart of the Northeast Solutions Family Resource Centre. Located in the Village Square Leisure Centre, it offers a variety of assistance to families in Temple and neighbouring communities.

Schools

Annie Foote Elementary School - Public

Father Scollen Elementary and Junior High - Separate

Guy Weadick Elementary School - Public

St. Thomas More Elementary - Separate

Demographics

Located in Ward 5, Temple has a population of 11,000, according to the 2006 Civic Census, with approximately 30.0% comprising the immigrant population.

A total of 2,480 families accounted for 4,740 children still living at home with 34.8% of these being six to 14 years old. According to Statistics Canada, the median household income for Temple in 2000 was $59,074.

In addition, 40.8% of the population over 20 completed college, attended university or graduated university with a degree. An additional 13.6% graduated from trade schools.

There are a total of 3,495 occupied private dwellings in Temple with 67.2% being single detached dwellings.

Perched upon a large hill on the Calgary’s northwestern edge, Panorama Hills offers spectacular views of the stretching metropolis to the southeast and rolling prairies to the northwest.

It is bounded by Country Hills Boulevard to the south and Harvest Hills Boulevard to the east in an area that has undergone rapid commercial growth thanks to large retail construction projects built direct adjacent to the community. The large movie theatre is a popular spot and most amenities can be met with large box stores like Superstore and Futureshop.

The area is also home to two historical sites, the Reverend George McDougall cairn and the John A. Lewis rock quarry. The cairn is a memorial of George McDougall who was a early prairie Methodist, and founder of the Victoria Mission east of Edmonton.

There are also several golf courses in the area.

Panorama Hills was established in 1997 and witnessed rapid expansion in the area since that time.

It is coupled under the Northern Hills Community Association, which consists of other communities such as Harvest Hills, Coventry Hills, Country Hills Estates and Cinnamon Hills.

As the community association for a rapidly developing area, the association is primarily concerned with urban planning and development proposals.

The association also offers sports programming for local residents, including soccer.

Cardel Place, operated by the Nose Creek Sports and Recreation Committee, opened in 2004. The centre includes two skating rinks, three gymnasiums, an aquatic complex, climbing wall, and workout area. It also houses the Calgary Public Library. The association also publishes a monthly newsletter for local residents.

Schools

St. Jerome’s Elementary — Separate

Dr. J. K. Mulloy Elementary - Public

Panorama Hills Elementary — Public (anticipated to open June 2009)

Demographics

Located in Ward 3, Panorama Hills has a population of 10,277, according to the 2006 city census, with approximately 28.7% comprising the immigrant population.

A total of 515 families accounted for 955 children, under the age of 25, reported to be still living at home with 31% of these being six to 14 years old.

According to Statistics Canada, the median household income for Panorama Hills in 2000 was $90,859 with Calgary’s average at $57,879.

Further, 5.1% of the population was considered persons in low-income housing.

In regards to education, 57.4% of the population over 20 completed college, attended university or graduated university with a degree—an additional 11.6% graduated from trade schools.

There are a total of 740 occupied private dwellings by structure in Panorama Hills with 97.3% being single detached and 2.0% being semi-detached.

Of these, 96.6% are owned and 3.4% are rented.

Rosscarrock is a residential neighborhood in the southwest quadrant of Calgary between the communities of Westgate and Shaganappi.

It is bounded to the north by Bow Trail, to the east by 33rd Street, to the south by 17th Avenue, and to the west by 45th Street.

The Westbrook Mall is located in the northeast corner of the neighbourhood, and it is bordered by the Shaganappi golf course.

Rosscarrock was established in 1954 and has a land use designation of R-2. An R-2 designation allows for low density residential development in the form of single detached, semi-detached and duplexed dwellings.

Numerous recreational opportunities exist in the area, including Glendale Meadows, Edworthy Park, Douglas Fir Trail and the Shaganappi Point Golf Club.

There is also easy access to downtown, which is approximately three kilometres away, via Bow Trail.

The community association itself offers a play school and is working in collaboration with the surrounding communities on common issues.

The big spring event, a partnership with Westgate Community, saw residents from both neighbourhoods band together to get rid of household junk.

Through this Spring Clean-up, the community associations brought in a city garbage truck, had a give and take pile and also hosted an electronics drop off site.

Schools

Ernest Manning High School - Public

Rosscarrock Elementary - Public

St. Michael Elementary & Junior High - Separate

Demographics

Located in Ward 6, Rosscarrock has a population of 3,200, according to the 2006 city census, with approximately 22.3% comprising the immigrant population.

A total of 585 families accounted for the 920 children, under the age of 25, reported to be still living at home with 37% of these being six to 14 years old.

According to Statistics Canada, the median household income for Rosscarrock in 2000 was $40,733 with Calgary’s average at $57,879.

Further, 39.2% of the population was considered persons in low-income households.

In regards to education, 48.1% of the population over 20 completed college, attended university or graduated university with a degree—#8212;an additional 12.9% graduated from trade schools.

There are a total of 1,500 occupied private dwellings by structure in Rosscarrock with 21.7% being single detached, 18.3% semi-detached, 6.7% row housing, 53.3% apartment or detached duplex and .7% other types of dwellings.

Of these, approximately 34.2% are owned and 65.8% are rented.

Ogden is one of the oldest communities in Calgary. It is named after the Millican family, homesteaders who settled in the area in the early 1900s, and I.G. Ogden, the former Vice-president of the Canadian Pacific Railway. With the construction of the Ogden Shops in 1912-1913 the area gained the distinction of being the only CPR repair shop between Winnipeg and Vancouver. Millican-Ogden is located in the SE, and, due to its long history, is home to several vintage homes including the historic Ogden Hotel. The area also contains numerous restaurants and strip malls. In addition, there is plenty of open space in the area, particularly in the Bow River Valley, as well as numerous parks. The community’s outdoor pool and the Jack Setter’s Arena offer recreation opportunities to residents. There are also both public and separate schools in the area.

Ogden’s community association offers a variety of innovative services. The centre has both a main hall and a sports & event lounge for private rental. The community hosts Jelly Bean dances, public skating, teen swims and a variety of other activities. Community days, Canada Day celebrations and Winterfest are all held annually to enable community members to connect with one another in a fun atmosphere. The community has a Family Resource Centre located at 2734 - 76 Avenue SE. The resource centre provides play groups, parenting classes, job search support, computer skills training, a toy lending library and an emergency food bank. Transitional housing, a project spearheaded by the Calgary Police Service is also offered to meet the needs of homeless families. These programs aid Ogden in their efforts to improve the standard of living of all members of their community.

Schools

Banting and Best Elementary School - Public

Sherwood Community School - Public

St. Bernadette Elementary School - Separate

Demographics

Located in Ward 9, Ogden has a population of 8,766 (2006 Civic Census) with approximately 14.6% comprising the immigrant population (Statistics Canada, 2001 Census of Canada). A total of 1,790 families accounted for 3,005 children still living at home with 39.9% of these being 6-14 years old. According to Stats Canada, 2001 Census of Canada the median household income for Ogden in 2000 was $47,500. In addition, 33.7% of the population over 20 completed college, attended university or graduated university with a degree - an additional 16.4% graduated from Trade Schools (Statistics Canada, 2001 Census of Canada).

There are a total of 3,660 occupied private dwellings in Ogden with 57.2% being single detached dwellings (Statistics Canada, 2001 Census of Canada).