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Market Update: January 2016

February 3rd, 2016 by corinnewatson

While the current market presents some challenges for sellers, it also offers opportunities on the buyer’s side. Softer prices combined with still-excellent interest rates are a great advantage for ‘move-up’ and first-time buyers!

CREB, February 1, 2016 – Calgary’s housing market is starting 2016 firmly in buyers’ market territory, much the same as last year ended.  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.”

Full report:  Housing market remains unchanged in January by CREB on February 01, 2016

Jan 2016 benchmark price

WIN a Master Bedroom Makeover from CIR REALTY!

January 25th, 2016 by corinnewatson
Bedroom Makeover Contest (1)CIR REALTY & the amazing designers at ReStage Home Staging are giving away a Master Bedroom Makeover (valued at $10,000!).
The contest closes on February 7th and CIR REALTY will be doing the final draw on February 11th. The lucky winner will be notified just in time for Valentines Day!

 

Enter to Win a Trip to San Diego from CIR Realty!

September 20th, 2015 by corinnewatson

san diego contest invite

CIR REALTY is Sending One Lucky Family On An All Expense Paid Trip to SAN DIEGO!  Entries accepted until October 31st and the GRAND PRIZE Draw will be on Monday, November 2, 2015!

CLICK HERE TO ENTER NOW!

Contest is open to Alberta residents 18 years of age and older.  Only one entry per person can be submitted.  No Purchase Necessary.

Win a Family Trip for 4 from CIR Realty!

March 1st, 2015 by corinnewatson

WIN a grand prize Family Trip for FOUR to California
-or- one of five other great family days in your local area.

CLICK TO ENTER CONTEST!

Early Bird Draws Start in March, 2015. GRAND PRIZE Draw first week of June 2015.

Contest is open to Alberta residents 18 years of age and older. Only one entry per person can be submitted.  No Purchase Necessary.

CIR contest postcard

 

 

Real Estate in 2015!

January 19th, 2015 by corinnewatson

While number of sales is expected to decline by 4%,

prices are expected to remain stable with a slight increase of 1.58%. 

There is no doubt that this will be a very different year for real estate in Calgary and surrounding areas compared to 2013 and 2014, however it has been refreshing to hear the facts about the impacts the recent oil and gas crisis is expected to have on our real estate as opposed to the rampant speculation and uncertainty as to how the one industry will affect the other.  Overall employment levels and migration are the primary factors of the current economic climate that would most affect real estate, and we are still expecting a 1.9% growth in employment as well at 15,000+ migrants in 2015.

Highlights of the 2015 CREB Forecast Report:

CALGARY REGION RESALE HOUSING MARKET SUMMARY

Calgary’s regional housing market in 2014 benefited from strong demand due to positive economic fundamentals. In 2015, however, several factors are pointing toward a pullback. While overall employment levels are forecasted to remain steady, a drop in net migration, coupled with expected lending rate increases and energy sector uncertainty will impact housing demand. While, supply levels are expected to rise. Given previously tight market conditions, rising supply will simply push the market toward more balanced conditions, supporting price stability.

CITY OF CALGARY TOTAL MARKET

Calgary forecast sales and price growthListings continued to outpace relatively strong sales growth in the third quarter, pushing the market into more balanced conditions and easing upward pressure on prices, a trend that continued into the fourth quarter.  Overall, a 13 per cent annual increase in new listings in 2014 helped push the market toward more balanced conditions, but not before some significant gains in prices. Based on an annual average, the benchmark home price totaled $451,008 in 2014, a 9.85 per cent increase over the previous year.  The economic climate in 2015 will change substantially compared to 2014. As a result, the resale housing market will demonstrate different traits.  Weaker economic conditions are expected to cause a pullback in sales, causing supply levels to rise from current low levels.  Yet prices are expected to remain relatively stable, increasing by 1.58 per cent on an annual basis due to relatively low inventories going into this cycle. On the demand side, sales are expected to decline by four per cent due to market uncertainty, a better supplied rental market, a drop in employment growth and net migration levels that are more consistent with long-term trends for the city. While sales activity is expected to ease in 2015, it remains consistent with long-term levels.

INTEREST RATES

With the labour market improving and inflation expected to reach target levels, the Bank of Canada is expected to begin raising interest rates in the later portion of 2015. While the increases are expected to be gradual and modest, this should place some downward pressure on the relatively strong levels of price growth.

NEW HOME SECTOR

Calgary forecast housing startsCalgary CMA housing starts are estimated to increase by 39 per cent to 17,533 units in 2014, relative to the previous year. Over the first 11 months of 2014, single-detached sales increased by 1.3 per cent to 6,067 units. Meanwhile, multi-family starts nearly doubled, reaching 10,224 units. The overall rise in starts increased the amount of product under construction. Yet, two consecutive record years of net migration – combined with positive employment opportunities and low mortgage rates – depleted inventory levels in both the resale and new home sectors.

Heading into 2015, overall new home inventory continues to remain below historical norms – even with an increase in starts activity and product under construction. Within the sector, single-family product under construction remains well below historical norms, while multi-family product is near all-time highs. As most of the product is pre-sold, absorption rates should remain strong.

ECONOMIC GROWTH /EMPLOYMENT / WAGES

Calgary forecast employmentMoving into 2015, employment levels are expected to increase by 0.90 per cent. Job losses are expected in the primary and utilities sector, which includes the mining, quarry and oil and gas extraction (highest earnings sector). Meanwhile, the personal and non-commercial services industries are expected to see the largest growths in employment.  Population gains in the Calgary CMA will generate new job opportunities in areas such as accommodation, food services, recreation, education and health services. However, some of these positions represent the lower ranges of the provincial weekly earnings.

POPULATION GROWTH

Calgary forecast migrationCalgary migration levels are forecasted to ease over the next several years as weaker economic conditions inside the province limit opportunities and incentives for people to move here.  Overall levels, however, are generally expected to remain above 22,000 in 2014 dropping to just over 15,000 in 2015.  While the pullback seems significant following record numbers, migration levels should continue to support housing demand, albeit at lower levels, which are more consistent with long-term averages.

NOTE: Migrants tend to be younger.  Compared to the rest of Canada, Alberta has the largest share of working-age population and the lowest share of seniors. In Calgary, 35 per cent of the population is 25 to 44 years old, according to the latest civic census. This age cohort represents a demographic that is most likely in the home buying phase of their life.

OIL

Oil’s impact on the housing market over the next two years will depend on the degree of pullback within the energy sector. To compare, energy investment in 2009 slowed substantially after the financial crisis, slower global growth and the U.S. recession. An estimated 16,318 full-time jobs were lost in the Calgary Census Metropolitan Area (CMA) in 2009 and another 4,281 in 2010.  The financial crisis had a significant impact on both housing sales activity and pricing in Calgary. However, the impact following the energy sector pullback was less severe. While sales activity dropped to 10-year lows in 2010 following two consecutive years of jobs losses, listings also fell, which prevented any further price weakening.

The scenario in 2015 is far different.  The U.S. economy is far stronger following years of deleveraging, as both consumers and businesses have been repairing their balance sheets. With consumer spending gaining traction and business investment improving, economic growth is expected to pick up in the U.S. to growth levels not recorded since 2005.  That growth, when combined with a depreciating Canadian dollar, should help support the export sector.  Furthermore, rising U.S. demand will also help support demand growth for oil.  Nonetheless, Alberta’s energy sector will likely face a challenging year, which will impact the housing market. Lower energy prices will slow the province’s economic growth. Analysts expect a reduction in investment spending, government revenues, corporate profits and, ultimately, household income.  While forecasts point to some pullback in energy related employment, gains in the services and construction sector are expected to o. set the losses, resulting in stable employment levels in the Calgary CMA.  Concerns regarding the energy sector, along with slowing migration levels and employment growth, are expected to cause a pullback in housing demand in 2015, but not to the levels seen in 2010.  Meanwhile, despite a decline in sales, prices are expected to remain relatively stable as supply levels in the housing market are lower than levels seen during the previous energy sector pullback.

HOUSING RISK

  • The risk lies with employment levels.  If overall employment falls and job prospects worsen, this can result in higher-than-expected gains in inventories relative to sales.  In this scenario, inventories would rise, amid weaker demand, placing downward pressure on prices.
  • Concerns over the energy sector could impact consumer confidence in the market. If energy prices stay low throughout the year, this can further dampen confidence and cause consumers to delay any unnecessary changes regarding housing. However, if energy prices improve sooner than expected, this could change the outlook in terms of employment, migration, and ultimately housing.
  • A greater than expected increase in new multi-family inventory could result in increased supply in the resale market, placing downward pressure on apartment and attached prices.

 

SOURCE:  CREB® 2015 Economic Outlook and Calgary Regional Housing Market Forecast.

 

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Calgary Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.
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