Moses Ndirangu O/A Morani Real Estate

Moses Ndirangu O/A Morani Real Estate A service providing valuable market statistics and trends every month. This way, you’ll know exactly, what’s going on in your local market

08/11/2016

Demand down with net migration
by CREB on August 02, 2016



In step with City census data on declining net migration levels, housing sales activity totaled 1,741 units in July, a 12.6 per cent decrease over last year and the 20th consecutive month of year-over-year sales declines.
“Continued pullback of sales activity is a sign of economic conditions,” said CREB® chief economist Ann-Marie Lurie. “The number of unemployed workers keeps rising and when you combine job losses with declining net migration, the result is going to be weaker housing demand.”

Slower sales were accompanied by declining new listings in July. This helped prevent further inventory gains and minimize the downward pressure on benchmark prices. By months end, the residential benchmark price was $440,000, similar to last month, but 4.2 per cent below July figures from the previous year.

While detached prices seem to be leveling, this is not the case for all property types. With over six months of inventory in the apartment sector, oversupply continues to create steep price declines.

The apartment benchmark price totaled $277,000 in July, a 0.4 per cent decline over the previous month and 6.6 per cent below last year’s levels.

City-wide benchmark prices for detached product totaled $502,300 in July, which is similar to last month, but 3.4 per cent lower than last year’s levels. Meanwhile, semi and row attached product recorded a year-over-year decline of 3.1 and 5.5 per cent for July prices of $385,200 and $310,300.

“To buyers and sellers that have been paying attention to the housing market in Calgary and surrounding areas, it should come as no surprise that we continue to see a slowdown in sales activity,” said CREB® president Cliff Stevenson. “Buyers are expecting further declines in sold prices, and sellers are adjusting to softer demand with price decreases. When these expectations intersect, we're seeing sales activity in the market, but not at the level realized over the last several years.”

07/11/2016

Home prices down, but not out.....

Calgary home prices continue to slide in most areas of the market, but not at the rate that many might expect. This is partly due to June’s resiliency in the detached and semi-detached sectors of the market, where sales compared to new listings and standing inventory started returning to more balanced levels.

“The detached market has been gradually moving towards more balanced conditions, helping to prevent price levels from declining at the faster rates we saw in the previous two quarters,” said CREB® chief economist Ann-Marie Lurie. “While this is welcomed news for sellers, it’s very likely that pricing challenges will persist in the housing market until economic conditions start to improve.”

Detached benchmark prices totaled $502,400, which is 0.4 per cent higher than last month, but 3.4 per cent lower than last year’s levels. This is the first time in eight months that detached prices recorded a monthly gain, helping ease the quarterly decline from 2.2 per cent in the first quarter to 0.7 per cent in the second quarter.

Overall sales activity remained relatively weak in June, falling by seven per cent to 2,028 units. Inventory levels went in the other direction and continued to climb in June to 5,973 units, 16 per cent higher than last year. Both the attached and apartment segments of the market have recorded inventory gains around 30 per cent, far greater than the year-over-year increase of five per cent in the detached sector.

Higher inventories and weaker demand continue to have a larger impact on pricing in the apartment and row sectors. June apartment prices slid by another 0.1 per cent over last month, pushing the average year-to-date benchmark price down 5.3 per cent below last year. Attached product experienced a monthly slide of 0.3 per cent, mostly due to steeper price declines in row style product.

“The price adjustments that we’ve seen in the past year have allowed some buyers to get into homes that were previously unattainable,” said CREB® president Cliff Stevenson. “This is especially true for homeowners with financial stability and a good amount of equity in their home. With so much choice out there, it’s giving consumers an opportunity to find their ideal home at a price they can afford.”
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06/13/2016

Housing supply swells in cool spring market.

Calgary’s housing inventory was on the rise once again in May as new listings climbed and sales slowed to 1,923 units.

"While recent oil price gains may have some feeling optimistic, weakness in the labour market continues to impact housing demand," said CREB® chief economist Ann-Marie Lurie. "Job losses are spreading into other sectors, wages are declining and unemployment levels remain high. At the same time, we're seeing housing supply levels rise in the rental, new home and resale markets."

Inventory levels rose by 14 per cent in May to a total of 6,148 units. Every product type is experiencing these gains, but the largest inventory growth has occurred in the apartment and attached categories. Together, these sectors represent half of all resale inventories in Calgary.

“The resale apartment market has been the most difficult for sellers,” said CREB® president Cliff Stevenson. “They are competing with improved selection in the lower price ranges of the detached and attached markets, and facing increased competition from the new home sector, where builders are offering incentives to attract potential buyers.”

While apartment resale supply remains 22 per cent below the May high of 2,055 units in 2008, the combination of rising supply in the apartment sector and steep declines in sales activity has elevated months of supply to nearly six months.

The apartment sector of the market has experienced buyers’ conditions for more than 10 months, so the impact on pricing is more dramatic, compared to the detached and attached sectors.

In May, the apartment benchmark price totaled $278,500, a monthly and year-over-year decline of 0.7 and 5.6 per cent. In the detached and attached markets, home prices totaled $500,500 and $332,100, a year-over-year decline of 3.4 and 4.3 per cent.

04/02/2016

Unemployment impacting housing activity

Calgary, April 1, 2016 –
Home prices declined further in March as economic conditions weigh on Calgary’s housing market.
Calgary’s benchmark price totaled $442,800 in March, a 0.49 per cent decline over February and 3.51 per cent lower than levels recorded last year.
“With no improvement in the labour market, it’s no surprise that we continue to face downward pressure on housing sales activity and prices,” said CREB® chief economist Ann- Marie Lurie.
“Provincial unemployment rates are at the highest level recorded since the early ‘90s,” said Lurie, adding that Calgary’s unemployment rate in February rose to 8.4 per cent, which is higher than the provincial average of 7.9 per cent.
March home sales in Calgary totaled 1,588 units, 11 per cent below the same time last year and 28 per cent lower than long-term averages for the month.
Calgary also saw housing supply gains in most price ranges. Inventory levels rose by seven per cent to 6,084 units in March. Overall, months of supply has averaged five months in the first quarter of 2016.
“As we move into spring, we are starting to see more foot traffic at open houses and showings from potential buyers,” said CREB® president Cliff Stevenson. “For now, this activity hasn’t translated into improved sales in most segments of the market.”
The apartment sector has been the hardest hit by the recent downturn. After the first quarter of the year, apartment sales totaled 554 units, a 17 per cent decline over the same period last year.
Apartment benchmark prices have been trending down since late 2014. In March, benchmark apartment prices totaled $281,300, seven per cent lower than levels recorded prior to the slide and 4.93 per cent lower than levels recorded last year.
The detached and attached sector has also felt the brunt of Calgary’s weakening economy. Detached and attached home prices have dropped by four per cent from the recent peak.
“Homebuyers continue to wait and see if there are going to be further declines in home prices before making an offer,” said Stevenson. “Timing the bottom of the market is proving to be quite a challenge in the housing market we are faced with now.”
Beginning next month, the monthly statistics will be separated into two packages in order to provide a more comprehensive analysis of the housing market.
One package will contain Calgary housing statistics and district information to show the activity within areas throughout the city. The other package will show housing activity in areas surrounding Calgary and provide a more regional perspective.

03/02/2016

Housing sales slower than typical February

Monthly prices decline for fifth consecutive month
Calgary, March 1, 2016 – February sales totaled 1,127 units in Calgary, a 6.63 per cent drop over last year and 37 per cent lower than long-term averages for the month.
City wide unadjusted benchmark prices totaled $445,000 in February, a 0.63 per cent decline over January and 3.45 per cent lower than levels recorded last year.
“Slow sales and elevated housing inventory has resulted in further price declines,” said CREB® chief economist Ann-Marie Lurie. “Given the current economic environment, it is no surprise that consumer confidence and housing demand is being impacted.”
Calgary has seen employment fall for eight consecutive months, while unemployment rates have reached levels higher than the previous recession, said Lurie, adding that these conditions are expected to persist over the next several months.
While the number of new listings in Calgary continues to fall, inventory levels have remained elevated at 5,681 units. Overall, market conditions continue to favour the buyer with five months of supply.
“The high volume of inventory that we’re seeing has pushed sellers to be more realistic about their pricing expectations and the amount of time their properties may be on the market,” said CREB® president Cliff Stevenson. “Buyers are less likely to submit an offer if there’s a big gap between the listing price and what they are willing to pay. A solid selling strategy can really make the difference in this market.”
In February, there was a noticeable shift in the share of sales in the apartment and attached sectors. The apartment segment dropped to 15 per cent, while the attached market rose to 24 per cent. Overall, the apartment and attached sectors typically represent 17 and 22 per cent of the market respectively.
“Some of the shifting sales from the apartment to attached sectors are likely related to more options in the lower price range of the attached market,” said Stevenson.
The attached market is the only segment that recorded a year-over-year rise in sales activity. While this is partially related to the extra day in February this year, overall activity remained higher than the February lows recorded in 2009.
Meanwhile, both detached and apartment sales declined over last year’s activity and fell to the lowest February level recorded in over a decade.
The detached market recorded a fall in new listings, which prevented inventory levels from rising to new February highs. In fact, detached inventories remain 32 per cent below peak levels recorded in 2008.
While buyers have lots of choices, the detached market continues to show varying trends based on price range. Most notably, there is some evidence of imbalance starting to impact the $500,000 - $599,999 range of the market.
The detached benchmark price totaled 504,400 in February, a 0.71 per cent decline over the previous month and 3.19 per cent below February 2015 levels

02/03/2016

Housing market remains unchanged in JanuarySlow sales activity and inventory gains place downward pressure on pricesCalgary, Feb. 1, 2016 – Calgary’s housing market is starting 2016 firmly in buyers’ market territory, much the same as last year ended.“The recent slide in energy prices has raised concerns about near- term recovery prospects for the city,” said CREB® chief economist Ann-Marie Lurie. “Energy market uncertainty and a soft labour market are weighing on many aspects of our economy, including the housing sector.”City wide, January sales totaled 763 units, 13 per cent below last year and 43 per cent below long-term averages. While new listings declined by 16 per cent compared to January 2015, the number of new listings far outpaced the sales, causing inventory gains. January’s city wide months of supply levels rose above six months.“Selection for buyers in all product types and price ranges has improved,” said CREB® president Cliff Stevenson. “More choice andlow interest rates have encouraged some potential buyers to start window shopping. So far, this hasn’t translated into sales activity as many are waiting for steeper price declines from motivated sellers.”The aggregate benchmark price of $447,300 in January was 1.21 per cent lower than the previous month and 3.27 per cent below the January 2015 price of $462,400.“As expected, the imbalance between housing supply and demand is continuing to place downward pressure on prices,” said Lurie. “However, the recent price retraction has not erased all the gains recorded in recent years, as the benchmark price remains 4.41 per cent above the January 2014 price of $428,400.”While all property types have recorded price contractions from recent highs, the largest price declines have occurred in the apartment sector as this segment has had elevated months of supply since the second quarter of 2015.The apartment benchmark price totaled $281,900 in January, a year- over-year decrease of 6.35 per cent and 2.12 per cent lower than the previous month’s price. In fact, apartment sector prices have once again fallen below the 2007 monthly high of $301,500.The detached segment of the market continues to show variations depending on price range. The under $500,000 segment remains relatively balanced. However, recent trends are pointing to weaker sales- to-new listings ratios in the $500,000 to $600,000 range of the market.“Calgary’s housing market continues to face a wide range of challenges,” said Stevenson. “Sellers are reflecting on their expectations and considering all options available to them, given the dynamics of their specific market. In this environment, buyers have the opportunity to carefully consider their housing needs and make a decision based on their lifestyle and future goals.”

01/13/2016

Calgary home prices remained stable during the fourth quarter of 2015 and will experience only a small decline this year despite the city’s challenged economy, Royal LePage said in a local market outlook released Wednesday.

The real estate company is forecasting a year-over-year drop of three per cent in the aggregate price of a home in the Calgary region in 2016.

Royal LePage’s national house price composite, compiled from property value data in 53 of the country’s largest real estate markets, show the aggregate price in Calgary rose to $459,809 in the fourth quarter, up 0.3 per cent year-over-year.

The median price of a two-storey home rose 0.7 per cent to $514,935, while bungalows saw a decrease of 0.1 per cent year-over-year to $452,038.

During the same period, condominium prices saw some softness, declining 1.2 per cent to $300,714, said Royal LePage.

“Calgary’s housing market has been more resilient than most expected amid declining oil prices,” said Diane Scott, broker and owner of Royal LePage Solutions, in a news release.

“With some moderate price declines already underway, we will be watching closely, especially in light of the most recent drop in oil prices, for further impacts on the housing market to take shape.

“After remaining balanced throughout most of the year, the detached home segment is shifting to a buyer’s market as we enter 2016, while condominium prices continue to remain soft. We have seen an increase in first-time homebuyers entering the market due to more opportunity to enter at a lower price point.”

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01/07/2016

New home market:
Spring 2015 Starts will decline in 2015 and 2016 Following a record high in 2014, total housing starts in the Calgary Census Metropolitan Area (CMA) will decline in 2015. While reductions are forecast for both single-detached and multi-family starts, the decline will be most pronounced in the multi-family segment. Positive net migration and low mortgage rates will continue to support housing demand in the Calgary region. However, upward pressure on housing demand in recent years will be diminished by increased economic uncertainty brought on by low oil prices and subsequent announcements of layoffs in the energy sector. In addition, rising supply on the existing home market will offer buyers more options, which will compete with the new home market. In 2015, housing starts will decline 23 per cent year-over-year to 13,200 units. In 2016, in-flows of migrants are expected to slow further, while employment growth will also continue to moderate from the previous year. In addition, the inventory of complete and unabsorbed units will rise over the forecast period. This, coupled with elevated supply on the resale market competing with new home sales, will hold back production levels. Upward pressure will be more evident in the new multi-family market which will, in turn, experience a more significant decline than the single-detached segment. Given this, total housing starts will decline further in 2016 to 11,500 units. Single-detached construction in 2014 edged 1.4 per cent higher year-overyear to 6,494 units. In 2015 and 2016, the pace of production will slow to 5,700 and 5,500 units, respectively. Competition from elevated supply in the existing home market will be a contributor to the decline in starts over the next two years. This will hold particularly true should a large price differential remain between an existing and new single-detached home. Where previously, the supply of land and input cost pressures were large contributing factors in the expected slowdown of single-detached production, in the short term, these factors will not be as dominant as the economic uncertainty that is currently weighing down on overall housing demand. In March 2015, the number of complete and unabsorbed singledetached units in inventory declined 10 per cent year-over-year to 382 homes. Of these units, there were 203 show homes and 179 spec units. With the exception of April 2014, the show home count has consistently moved lower year-over-year and was at its lowest level on record in March. In contrast, the number of spec units was 31 per cent higher in March compared to the previous year. The spec home count is not expected to rise significantly over the forecast period, particularly as the pace of production slows. Similarly, under construction levels will not rise substantially through 2016, which will contribute to manageable supply levels.

11/02/2015

PRICE DECLINES IN CALGARY

Prices decline for the second consecutive month.

Sales activity remains well below long-term averages

Click here to view the full monthly stats package.

Elevated inventory levels in October contributed to a second consecutive month of price declines in Calgary’s resale residential housing market.

Benchmark prices declined 0.7 per cent from the previous month, and 1.2 per cent from the same time last year, to $453,100.

“Persistent weakness in the overall economy continued to impact housing demand in Calgary as October sales were nearly 16 per cent below long-term averages,” said CREB® chief economist Ann-Marie Lurie.

“In addition, new listings did not decline enough to prevent inventory gains and, ultimately, price contractions.”

The steepest declines occurred in the apartment sector, where the benchmark price fell to $288,300, a 0.8 per cent decline from September and nearly four per cent from the same time last year.

Lurie attributed the declines to a continued rise in months of supply – from a low of three months in June to nearly six months in October.

“That sector is facing added competition from several new apartment projects, improved vacancy in the rental market and more supply in the attached sector,” said Lurie, noting months of supply in the sector has remained above four since August.

“When combined with a steep pullback in demand, it creates conditions that generally favour the buyer.”

Aggregate prices in both the detached and attached sector also recorded both monthly and yearly declines, but were moderate compared to apartments due to less severe drops in absorption levels.

“In this type of market, both sellers and buyers need to have those hard discussions with their real estate professionals about their objectives,” said CREB® president Corinne Lyall, noting increased competition from both the rental and new home markets.

“If sellers are serious about selling, they need to consider how they are positioning their home on the market. Buyers, meanwhile, have to consider whether that home satisfies their lifestyle needs.”

Overall, October sales in the city declined by 33 per cent year-over-year to 1,421 units, with year-to-date sales falling by more than 26 per cent.

Meanwhile, inventory levels during the month remained at 5,578 units, pushing months of supply up to 3.93.

Market balance in the detached sector, which accounts for more than 60 per cent of all sales in the city, varied depending on price segment.

More than half of detached sales in October occurred below $500,000, where demand relative to supply remained relatively tight – thereby potentially offsetting some of the price losses in the higher end of the segment.

“Sales activity has varied depending on market segment and price,” said Lyall.

“For example, while some price adjustments have occurred in the higher-end detached category, this is less likely for the under-$500,000 detached segment, which had more balanced conditions.”

10/30/2015

CMHC: “Weak evidence of problematic conditions” in Calgary

Posted on October 29, 2015 | Leave a comment


Canada Mortgage and Housing Corporation (CMHC) released its Housing Market Assessment (HMA) report that evaluates the extent to which there is evidence of problematic housing market conditions.

Four main housing factors are classified as either having weak, moderate, or strong indications of trouble:
1.Overheating of demand in the housing market, wherein demand significantly outpaces supply.
2.Acceleration in the growth rate of house prices, which could be partially reflective of speculative activity.
3.Overvaluation in the level of house prices, which indicates that house price levels are not fully supported by fundamental drivers such as income, mortgage rates and population.
4.Overbuilding of the housing market, which suggests that supply significantly outpaces demand.

The report found that there is weak evidence of problematic conditions in the Calgary market overall. However, there is “moderate evidence of overvaluation detected as house prices posted robust gains in the last couple of years while growth in personal disposable income has recently slowed down. Due to low
oil prices, economic conditions have moderated, which has limited growth in employment and income, as well as reduced net migration.”

In the 15 Census Metropolitan Areas covered in the report, CMHC found that Saskatoon, Regina, Winnipeg & Toronto all had “strong” evidence of problematic housing market conditions.

10/30/2015

“Luxury Home Buyers Find Deep Discounts in Calgary Area”

Posted on October 30, 2015 | 1 comment


Are buyers finding deep discounts in Calgary’s luxury home market? An article from CTV links falling sales to dramatic million dollar discounts, while ignoring that asking prices don’t tell the whole story.

Fact: a home can be listed at any price. Whether or not it’s worth the asking price is a different matter altogether.

The two Priddis properties highlighted in the article had price tags of $2.9 and $3.9 million. That they ending selling for less than half of asking doesn’t mean that prices have cratered by 50%.

Those two homes were built this year and have no previous sales history. The sales-t0-list-price ratio in this case is more a reflection of sellers being off the mark with their market evaluation and choosing an auction format listing in a slow market.

For a more comprehensive view, let’s look at the 31 luxury homes that have sold month-to-date in Calgary. Thirteen of them had at least one previous MLS® sale:

Calgary luxury sale history
Calgary luxury sale history

Ignore the homes that had percentage increases of over 100%; those are infills, were substantially renovated, or last sold over a decade ago.

We’re left with three homes that sold for less than they were purchased by up to $177,000. A home that was bought in June sold for $50,100 less this month. A good chunk of change, but not million dollar losses.

On the other hand, there were a couple homes that previously sold nearly 2 years ago that saw gains of 8.2% and 9.1%, or $149,500 & $100,000.

Has the Calgary luxury market been impacted due to job losses and Alberta’s economy? No doubt, most notably in sales. Have asking prices been reduced? Most assuredly. But those shopping for high-end homes today can’t expect to find million dollar discounts relative to what the sellers paid for it.

10/23/2015

No Change To Prime .....

The Bank of Canada announced today that it will not be changing its overnight rate. Therefore the Prime lending rate remains at 2.70%.
The Bank attributed it's move (or lack thereof) to weaker-than-expected global economic growth and uncertainty surrounding China's transition to a slower growth path (which is putting downward pressure on energy prices). The US economy, on the other hand, is continuing to pick up steam-which is good news for Canadian exports.
Canada's economy has rebounded from the recession we were experiencing earlier this year. Non-resource sectors are benefiting from previous monetary policy actions and depreciation of the Canadian dollar, the Bank says. Households are continuing to spend at a moderate pace. Lower prices for oil and other commodities, however, are dampening business investments and exports in the resource sector.

It's these lower oil and commodity prices that are causing the Bank to revise its economic growth forecast for 2016 and 2017. Now, the Bank projects real GDP will grow by just 1% in 2015 before firming to about 2% in 2016 and 2.5% in 2017. The Bank is now saying the Canadian economy will return to full capacity by mid-2017.
With the Prime rate staying the same, we are continuing to recommend that clients stay in their existing variable rate mortgages. The date of the Bank of Canada's next announcement is scheduled for December 2 2015

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