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by CREB on January 13, 2015
Housing sales are forecasted to ease by four per cent this year, due to market uncertainty and changes in economic climate, while prices are expected to remain relatively stable with a modest increase of 1.58 per cent on an annual basis, CREB® said today in its annual forecast.
Although sales levels are expected to ease, previously tight conditions throughout 2014 indicate that rising supply would push the market into more balanced conditions, supporting price stability in 2015. However, CREB® warns there are multiple risk factors attached to this forecast, which estimates a total of 24,503 homes will be sold in the city this year.
“The housing risks lie mainly with employment levels and net migration, both of which can be more severely impacted by a prolonged period of weakness in the energy sector,” said CREB® chief economist Ann-Marie Lurie. “There is also the impact that energy prices have on consumer confidence. If energy prices stay low throughout the year, concern regarding job stability could cause consumers to delay unnecessary changes regarding housing.”
The report notes that while sales activity is expected to ease in 2015, it remains consistent with long-term levels. By comparison, sales in 2014 were nearly 15 per cent higher than the long-term trends for the city.
“The economic situation is far better today than what is was in 2009, where the fallout of the financial crises resulted in a U.S. recession, weakness in energy sectors, a pullback in investment and ultimately job losses in Calgary,” said Lurie. “With economic indicators remaining more positive in this period, the pullback in housing is not expected to mirror activity during the 2009-2010 period.”
CREB®’s forecast also notes that housing activity can vary significantly depending on location, price range and property type. For example, in 2014, there were less detached homes within city limits available in the lower price ranges. This caused many consumers who were looking for lower priced product to move to the attached and apartment sectors within city limits as well as other surrounding areas. Many consumers turned to the larger surrounding areas of Airdrie, Cochrane, Okotkoks and Chestermere, which all recorded record levels of sales in 2014.
“With more supply in the market expected this year, buyers will likely have more alternatives in all price ranges,” said 2015 CREB® president Corinne Lyall. “It’s a nice scenario for buyers, but it also means that sellers will likely have to adjust their price expectations and be realistic about the amount of time their home will be on the market.”
“A REALTOR® can help navigate market conditions and real estate options, which are always unique to each consumer,” said Lyall. “While challenges in the market can raise concerns for buyers and sellers, it really comes down to their personal situation and knowing what’s right for them. Real estate is truly local.”
For the entire CREB® forecast, visit: creb.com.
by CREB on January 02, 2015
It was a record setting year for Calgary’s condominium apartment and townhouse sectors, as sales reached new annual highs despite year-over-year residential sales declines of 7.5 per cent in December.
Single family sales totaled 708 units in December, a year-over-year decline of 8.3 per cent. Meanwhile, total condominium sales also declined by six per cent over the same time frame, but overall activity remained consistent with long-term averages.
“It is not unusual to see slower activity in the month of December as consumer focus often shifts toward the holiday season,” said CREB® president Bill Kirk. “While monthly sales activity has slowed, it is consistent with December activity over the past several years. Overall, annual sales activity has actually increased by 9.3 per cent over last year.”
Yearly condominium apartment sales totaled 4,742 in 2014, an 18 per cent increase over the previous year. Meanwhile, townhouse sales totaled 3,737 units, a 17 per cent annual increase. Both sectors recorded record years of sales activity.
“Changes in the economic climate are expected to cool housing market conditions in 2015, and December activity may be the first indication of this shift,” said CREB® chief economist Ann-Marie Lurie. “However, any pullback that may occur needs to be kept in perspective as 2014 housing activity far exceeded our expectations.”
City of Calgary sales and new listings totaled a respective 25,664 and 36,329 in 2014. The 13 per cent growth in new listings outpaced the nine per cent growth in sales, contributing to an overall rise in inventory levels.
With more availability in the market, residential benchmark prices continued to level off in December. However, annual average benchmark gains remained above nine per cent. Unadjusted benchmark prices for single family, condominium apartment and townhouse properties all remained similar to levels recorded in November.
Single-family sales totaled 17,185 in 2014, an annual increase of 5.5 per cent. While the single-family sector represents the largest component of sales at 67 per cent, the growth in sales in both the condominium markets has outpaced activity in this sector.
“The activity that we’ve seen in the condominium sectors is, in part, is related to product availability in the lower price ranges,” said Kirk. “The under $400,000 segment of the single-family market within city limits has been declining. With the bulk of condominium products available for under $400,000, more consumers have been turning to these sectors for their housing needs.”
Strong demand for condominium apartments was also met with rising supply levels. New listings totaled 7,297 units in 2014, a 30 per cent increase over the previous year.
While rising listings helped take the pressure off prices, on an annual basis, unadjusted condominium apartment and benchmark prices have recovered and exceeded previous highs recorded in 2007.
In addition to these monthly figures for December, it should also be noted that full details of CREB®’s 2015 forecast will be released on January 14, 2015 at our annual Forecast Conference and Tradeshow.