Calgary Real Estate Today...

(a.k.a. B's Blog)

June 28, 2009

Recession? What recession? In recessions, interest rates decline. They're going up now. And, in recessions, housing takes it on the chin; sales plummet - prices fall. But sales have been rising for most of this year and prices are up by 7 - 8 percent in just the last 4 - 5 months. In fact, the only things we see that are "recessionary" are natural gas prices and unemployment numbers which, from a statistical standpoint are at a level many ecenomists thought of as being "normal" back in the good old days of 15 - 20 years ago so...we ask again, "What recession"? From where we sit this is more of a return to normal than anything else.

Our Chart of the Week this time is a simple little ditty but it illustrates our point quite well we think, for it shows on one graph, listing and sales activity for this year to date (June 26) on a daily basis and, as you can see, the two lines are approaching a unison.

What this means, of course, is that even now, when we add in expiries (the overpriced ones that don't sell) this market is starting to eat itself to zero and furthermore, if this trend continues a là 2004 - 2005, the tightening supply/demand ratio will eventually create a shortage and another spike in prices a là 2006 - 2007.

Will it happen? We have no idea. Could it happen? You bet! We remember the 6 months from Sept. 1989 to March of 1990. After a steadily declining supply/demand ratio which started in 1987, the market got to a point where prices took off and, in the space of 6 months rose by 26 percent! And...mortgage rates were 12 - 14 percent as well, so don't tell us prices go down when rates rise. They do not, however, that is another topic for another day.

Finally, for those of you who got lucky and saw Brantford Marsalis last night, you did indeed get lucky as did Wendy & I. It was a great night and is right up there on my list of great evenings in jazz - and this kid has seen a few but again...another topic for another day!!!

June 20, 2009

This week's Chart Of The Week takes a look at weekly residential sales compared to 2008 and 2005, which was a good but more "normal" year for the market.

As you can see, sales are currently approaching those robust numbers and the test will come over the next 6 - 8 weeks, as we see whether or not this nice market action can continue. We think it will but the proof, as they say, will be in the pudding; so let's all do our part by getting out there in July & August to purchase at least 1 more house per household! Why - it'll be good for the economy and - in a few years - it will be great for your net worth!

Father's Day as you know is tomorrow and this one is holding an Open House at his listing at 72 Douglas Park Blvd S.E. in Douglasdale Estates. If you're out and about...drop in and say hello. I'd love to see you and, who knows, maybe you'll even buy it!!!

June 18, 2009

The market continues to chug along...so much so in fact, that sales are now quite plentiful and prices are now rising; not a lot mind you but, rising nonetheless. For our part, we've been fortunate to acquire some foreclosure business and have been able, with some coaxing to get them priced right so thankfully, they have sold quite quickly. However, we have more coming too, so if you're in the market for some "opportunities", get us to put you on our mailing list, as we have a variety of condos and single family homes coming soon.

Apart from real estate we're starting to get revved for the Calgary Jazz Festival next week and are lookin' forward to hearing/seeing the Brantford Marsalis band and the Jimmy Cobb Kind Of Blue Band at Jack Singer. Should be/Will be....GREAT!!!!!!!

June 13, 2009

It's Saturday and time for another Chart Of The Week which, in case you're wondering, is our monthly Index Of Leading Indicators. We concocted this thing about 19 years ago when we first became computerized because we were looking for a way to "see" the market and more specifically, we were looking for a tool that would tell us and our clients if the market was "safe" or "dangerous", and that it has done remarkably well.

We decided to show this to y'all this week because, while not perfect (nothing/no one is), it is a rather dispassionate view of the market at any given point of time. As of May 31, The Index stood at Zero - which told me that, in the near term, prices would likely remain neutral and, as for June we expect some small improvement to say +1 or +2. We wait with bated breath!

Interest rates are up. Everyone knows that. Question is...will they stay up or even go higher. Personally, I got quite nervous of late and even suggested to our kids that they might want to lock in; however, now I'm not so sure that there might not be one more kick at the can in store for the bond market so, I'm keeping my opinion on rates firmly in the "let's wait & see camp". The kids? I fixed their rate on a 120 day hold and folks with renewals or purchases in the offing should do exactly that. Then you can wait and see.

As for the market, it continues to chug along and is really quite buoyant so buyers would be well advised to jump in now because these great prices are surely not going to last forever and when they do make their move, it could get ugly. In fact, we think now that it will get ugly...for buyers that is, because we continue to see a shrinking supply of homes for sale and an ever strengthening Alberta & Calgary economy. Sooner or later, these forces are going to collide and produce dramatically higher real estate prices.

June 10, 2009

"It" has started. No, no - I don't mean the attack of the slime creatures or anything like that, but rather, the "it" I refer to is mortgage rates and fixed term rates have started to rise; which is, one big reason why the buyers are out in full force - pre approvals in hand and lookin' for "The Deal".

Of course, this means prices have solidified and have actually started rising in many areas - ain't this free enterprise thing fun guys!!!!!! But here's The Fly...

What happens when we satisfy the pent up demand? Will the market stay strong through the summer and on into fall? We hope so, and think it will, esp. if oil prices stay buoyant, so stay tuned, this summer could turn out to be hotter than normal in the Calgary Real Estate Markets!!!

June 6, 2009

Our 3rd Chart Of The Week is now on the Newsletter Page and it is one which I know is open to some controvesy but there you are; controvesy is my middle name!

Anyway, today's offering is what I call the "Overbought/Oversold Index" which is simply a Reversion To The Mean chart of Calgary house prices.

For those not familiar with the term, "Reversion To The Mean" is an economic principle which states that, sooner or later, all markets revert to their long term average level of growth or price appreciation.

For us in Calgary though, the problem revolves around the definition of "long term"; firstly, because we are barely 100 years old and secondly, because reliable statistics only started being kept in 1967 which, oddly enough, was about when we entered in to the great inflation of the 1970's so, admittedly, our chart may be a bit off the mark (or not, we think) but it is, at least, an attempt to get a realistic view of where current prices are, relative to their long term trend, and in this case we have used three benchmarks, with the first being for the whole period from 1967 and the second being the peak to peak period from 1982 - 2007. The third is the mid point between the two and right now, the chart is telling us that prices are now neutral - neither too high (overbought) nor too low (oversold) but rather...just about right.

Finally, and because we were late getting last week's chart up, we are leaving it for another week so, if you haven't seen it, please feel free to have a look at that as well.

Apart from that...we were busy last week and we listed a real nice house in Douglasdale Estates, a foreclosure in Taradale and are working on two more foreclosures (1 condo and 1 house) which are soon to be listed. These homes may present opportunities for "gain", so have a look at our listings page if you have any interest in foreclosed properties. In the meantime, we're gonna fight our way through the rain this weekend and hold Open Houses at our villa in McKenzie Towne and at our new foreclosure up in Taradale...now how's that for a fun filled weekend!!!!

June 4, 2009

Our latest Chart Of The Week is now on the Newsletter Page and, as promised, it is of the Average Price in 2008 "Constant Dollars" which is to say, a chart of prices minus inflation. When May's inflation numbers are added, it looks like the price line will meet or exceed its 12 month moving average too - which is yet another bullish sign that this good market's not leaving town anytime soon.

On the rate front, lenders are starting to jack up their longer term mortgage rates so, if you are still holding on to your Variable Rate mortgage, now is the time to think about locking in - or not. The decision can be tough to make and really depend on the kind of variable you have and at what rate but for sure, it is a topic that now needs to be addressed if you are a holder of a variable rate mortgage.

As for the market, the next 60 days will tell the tale we think, because if sales stay strong through June & July, it will confirm for us that the market has enough "legs" to stay buoyant through to the end of the year and probably beyond. And, with oil now in the '60s and poised to go higher, it looks like Calgary is out of the woods economically.

May 23, 2009

In our May 15th note herein, we suggested that we might start putting up a Chart Of The Week ev'ry so often to give readers a better handle on what's going on real-estate-wise in Calgary and so, by massive public demand, we are proud to announce that...

"B's Chart Of The Week" is now up on the Newsletter page.

Ta Da!!!!!!!

Now, it's not something lame, like a price chart but rather, it is a chart which shows, on a weekly basis and over four different years, the number of price reductions. Also, each year is a separate set of data points so it is easy to compare one year against all others. We use this chart as a tool to help us predict changes in the market and thus, give clients better advice on matters such as pricing and offers. Right now, the chart is telling us that the market turned positive in February/March and that fewer listings are having their asking prices reduced prior to finding a buyer. In other words, things are getting back to "normal".

Next week? Right now - barring unforeseen happenings - I think we'll post a chart or two of prices in constant dollars. In the meantime, we soldier on...hoping this nice spring market doesn't fade away come summer. Right now we don't think it will but, I must admit, our short term conviction level is not high; esp. if rates start to go up or oil decides to crash again or.... However, if the market does soften come summer, be advised...it will present another great buying opportunity, as longer term...I do believe

we are on the cusp of another major move up in prices.

And oh yeah...remember - you heard it here first!

May 17, 2009

Listing Alert - Walk-Out Villa - On Water

Check out our listings page for the details of this terrific gorgeous condo. Yes, you get everything you have always wanted...a spacious home with hardwood floors, 2 and 1/2 bathrooms and two bedrooms, walk out style bungalow with a double attached garage.

Now, here is the best part. You have a  covered patio and a deck that opens out to the pond and a paved pathway going right by your door. You can try out those roller blades or enjoy your coffee and laugh at  the antics of those going by on their roller blades. Stroll to the stores and restaurants, the community centre and the farmer's market in the summer.

Watch the wildlife on the water. Enjoy the sun.

Pay low condo fees and watch the gardeners work.

Call us at 403-278-4105 for your viewing or...call your REALTOR.

May 15, 2009

A few thoughts on a late Friday night....

Firstly, have you noticed something in the air this past week? We have. Sort of a sour smell. It's led to lots of bad attitudes as well; people cutting us off in traffic (this is new?), angry emails from The Kids...why, even The Dog has seemed out of sorts this week.

We're glad it's over...

Apart from that, have ye checked out the price of oil Freddie? No? Well, in case ye did not know laddie, it hit $60 this week or close enough to it anyway and closed the week at a respecable $56 and change.

Now think about that for a moment. In what, January or Feb. it was fluctuationg between $35 & $40 and now, 8 or 9 weeks later, it's mid fifties.

Keep your good eye on oil my friends and you'll get some idea of where the Alberta & Calgary real estate markets are headed; especially Calgary because, when oil gets high enough for long enough, those oil sands projects are gonna come back online and, when that happens, Calgary's employment picture will do a one eighty and real estate prices will follow suit.

When? We think it will be next year (within 12 months) but if it's not then it will come soon after because, just because we have this dip in the economy does not mean folks have stopped driving and it does not mean they have stopped heating/cooling their homes. What it has meant though is absurdly low prices and a cessation of drilling, which will soon lead to a rather severe contraction of supply which will likely lead to yet another spike in prices...for energy... and yes...for Calgary housing. Count on it.

Finally, and this will depend on reader response, and our stamina I suppose but, the thought has occured to me that perhaps readers (yes, that's you!) would like a weekly snapshot of the market. You know a chart of say, listing and sales activity or...prices or...interest rates or...whatever strikes us a "relevant" on a given day. If you think it's a good idea, let me know at bwmorrow@telus.net and we'll post them on the Newsletter page say, one a week or once every other week or...whenever the spirit moves us to "create". And wow...here's a novel idea...we'll even email ya if you want whenever we post a new chart. Now, how's THAT for service? :)

May 13, 2009

Got a memo from our mortgage brokers, Joe Jacobs and Mary Priestner today regarding mortgage rates; where they thought they might be headed and what folks, who are riding the variable rate wave, should consider at this juncture in the market. Without being too long winded about it, they're saying what we've been saying, which is: short rates may not go up for awhile but longer rates may; therefore (and every case is different), now is the time to take stock and weigh your options.

We agree.

Also, if you take the time to read this month's newsletter, you'll get the impression that we are bullish on the market...which is true...we are. In fact, we think it's a great time to buy. However (why is there always a "however"?), that does not mean every "For Sale" homeowner should now rush out and raise their asking price by 10K. Au Contraire!! In fact, once this spring market is put away for another year (30 days hence?), we could see the market slump once more before taking off in 2010. We're not predicting that, mind you, but sellers should realise that it is a definite possibility so; if you're a seller, let caution be your guide at this time. This is not a market to gamble with.

May 11, 2009

Hear ye! Hear ye! Our latest newsletter is now online - just click on the tab...we hope you enjoy it 'cause well, I put so much thought into it this month, my head hurts!!

May 8, 2009

The market has bottomed and, while not out of the woods perhaps, we do believe it is now up, up and away again. We also believe mortgage rates are at the bottom so, for those who need stability in their mortgage payments, now might be a good time to lock in that loan.

The reason(s) for our optimistic view are a) the resilience of the oil market, b) mortgage rates at generational lows and c) the overall "tone" in the Calgary real estate market, in which supply and demand are coming into balance and in which consumer confidence seems to be strenghtening - so much so in fact that we might, just might, see a busy summer season this year, as opposed to our usual flat period which we like to call the Summer Doldrums.

April 17, 2009

Last week we were called by a past client to "Come over and list our house", which is how we do the majority of our business. Anyway, when we got there, it seemed to us that perhaps a facelift was in order. You know, the old paint and elbow grease approach; so, when we broached the subject with our client, we did it by showing them a newspaper article on Karyn Elliott, who runs Crazy House home staging (www.homestagers.ca). We then mentioned that perhaps it would be a good idea to call and "get some ideas" - so they did.

To make a long story short then, Karyn came in, suggested paint colours, organized the painter and advised our client on how to dress up their interior without spending much, if any, money and now their condo looks great, whereas before, it was just ok.

So here's the commercial, if you've lived in your home for several years and are at the point of puttting your house up for sale, consider using a stager such as Karyn Elliott for advice and help in getting the place looking good. She has an objective eye and is up to date with current trends and fashions.

April 9, 2009

Supply & Demand. At the end of the day, it all comes down to those two simple factors. For example, we remember 1981. It was a year of boom in the first half and doom in the second but, before you say NEP, remember that it was not announced until the end of October. The sharp decline in sales though, started in August of that year. Listing activity though, stayed the same all through 1981 with the result that prices dropped.

Like we said, it's all about supply & demand. And so it is today for, if we look at a graph of daily listing activity, it clearly indicates that listing activity is down in this traditionally busy spring period. Sales meanwhile, are up and climbing.

Conclusion: The market is changing...from one of oversupply and declining prices to one (in time) of possibly undersupply and rising prices so stay tuned, this ride's not over yet...

April 3, 2009

Make no mistake about it, this is not 1982...let alone 1932. Sure, the world has a problem, thanks in large part to Wall St. investment bankers; however, the Fed and its counterparts around the world seem to have gotten the message, which is..."Create inflation at any cost!", which is why we believe they will, which is why we are long term bullish on the Calgary market which is why we are again pounding the table (so to speak) and saying, "This is a great buying opportunity". Period.

The Calgary Real Estate Board released March stats on the 1st and guess what? Average Prices were up a tad over February, which were up a tad over January. Why, could this be the start of something big? We're not sure if it is but that "Something Big" is, we think, on its way and the smart buyers seem to be out in force; even the Million Dollar ones because it was those Million Dollar Plus sales in March that pushed the average. Of the 1,086 residential sales, 18 were for a million or more dollars each, with 3 of those being for well in excess of two million each.

In the bracket between $900,000 and 1 million there were a further 13 sales so things are indeed happening at the top end of the market.

That other forgotten average, the Median Price did not rise in March though but stayed the same as it was in February at $375,000 and no, we do not think it will go lower. In fact, we think prices could be up by 5% - 10% within 12 - 15 months for no other reason than supply and demand factors but...more on that next time...

Until then...have a great weekend and....let's get out there and buy some houses y'all!!!

March 29, 2009

Last night I came across an article on Mike Campbell's "Money Talks" website written by one Ken Norquay and, I must say, it caught my attention because the headline said, "Houses in Major Metropolitan Ontario City Selling for $25,000".

The story goes on to detail how it is that houses in Windsor (think GM, think Ford, think Chrysler) can be had for as little as $25K.

Now, by itself, this was indeed interesting news because, quite frankly, and sitting here in the Heart Of The New West, I do not spend much time thinking about Windsor real estate. I have enough trouble trying to keep up with Calgary's market, let alone Windsor's. However, I found the assertion to be of interest and, upon checking it out I found lots of small old houses listed for sale in Windsor for between $25,000 and $50,000. Then I read the rest of Mr. Norquay's article and frankly, I started to laugh and get angry all at the same time; firstly because he suggested in not so veiled terms that this dire scenario could spread across the country and secondly, because he stated that REALTORS were in "denial" about the possibility and were, as he puts it, "acting like ostriches with their heads in the sand".

Well, excuse me but, Mr. Norquay is full of it - including himself! Either that, or he is naive and does not realise that the reason Windsor's houses are cheap is because their main industry is down for the count. Or, could it be that Mr. Norquay wants to scare as many folks as he can to further his own ends? I don't know, but when I hear or read comments like these from so-called experts, I thank my lucky stars that most folks in this country at least have the good common sense to ignore idiotic statements like those perpetuated by the likes of Norquay who, it appears, is a stock market "strategist". Well, and given the state of that sector these days, perhaps he should stick to his knitting and leave the real estate strategizing to others who know what they are talking about. Real etsate in this town is not going going to crater any time soon; in fact, it is my considered opinion that we have about finished our "correction" and that house prices, over say, the next 5 - 7 years stand a good chance of doubling from current levels