Now I’m not expecting any big run up in pricing, or anywhere near a record breaking year in terms of sales, but I would have to say there are more folks looking to move up and or into a first home than I’ve seen in literally years.

So, what exactly would I dare to predict for this year’s real estate market? Well, I’m fully prepared to go out on a limb and say that Calgary will see an increase in overall sales from last year by a healthy 15% to 20% (my prediction is well above that of the Calgary Real Estate Board and CMHC, but I’ve rarely agreed with them). I’m not saying prices are going up by that much, I’m saying total sales volume will see a very healthy bump. But that will still be well off the pace of the crazy days, and still less than what would be consider a normal year of sales volume for a city of this size. The builders of New Homes will still be well off the normal pace for a city this size but we are getting closer to what the industry as a whole would call a normal year.

Pricing. Now that’s a whole other ball game. The spring market this year will be a healthy one and yes, there will be a bump up in pricing, as we see every spring. However the spring bump up in pricing will no doubt be given back in the fall market when we see things slow down and inventories build up …. This is just the typical selling cycle for homes in Calgary.

The reason we’ll see an increase in sales volume is that for the first time in more than 3 years the first time buyers are coming back into the residential real estate market in a serious way. And who can blame them … you can now get a 5 year locked in mortgage at 2.99% ….. That’s honestly unbelievable, as the rate of inflation is higher by 1 or 2 percentage points.

That’s as close as we’ll ever get to free money in our lifetimes.

Keep in mind that last year, only half of all condos listed were sold (many had to try several attempts and price reductions before selling), and around 60% of single family homes listed were sold (many also underwent price reductions and re-listings). So 2012 is going to be a better year . Overall this Spring looks like a good time to enter the market for first time buyers, and the move-up buyers are finally going to have the ability to climb the property ladder.

Happy home hunting!

Doug Hayden, Realtor

I have a few big take-aways I’d like to share:

First, for all kinds of obvious reasons, the markets have been slow and moving a bit lower. Newly built homes can be purchased for much lower prices than in the height of the markets, and the builders will work with clients to meet their needs. This is good news as many folks in our area are now looking to move up into a new home.

Prices have been slowly drifting lower due to pressure from fewer buyers (the buyers are out there; they are just waiting for good value priced properties) and a consumer attitude that is far more conservative than in years past. As the local economy picks up speed, which it has all this year, we can expect that to follow on in the residential real estate market. It’s just that it takes up to 18 months for that effect to happen.

So here’s my big take-away from 2011 heading into the New Year:  First off, home prices in Calgary and area are stabilizing. This stabilization of the residential real estate market means both short and long term home prices are moving to a range and pattern that is traditional for Calgary. That pattern being homes prices are stable for long periods of time …. 10 to 20 years.

Here is the other big take-away. I don’t see how interest rates can go up for the next 5 years, perhaps even longer. Almost anyone who has purchased a home in the last 3 to 5 years has done so in a low interest rate environment. These new home owners are counting on their mortgages to stay relatively stable. The capacity for most families to come up with extra money at the end of the month if interest rates were to rise quickly is minimal at best, and I think for most it could catastrophic.

I believe that the only possible reason for interest to go up in the next 5 to 10 years is inflation. Other than that there is too much inherent danger for the government to raise rates. Any big increase in interest rates without a large jump in inflation would cause an immediate recession in Canada.

Next year will be decent enough in the residential real estate market, with prices remaining pretty much where they are now, but with more homes selling than we have seen in the last couple of down years.
Happy house hunting, everyone!

Thank you so much for your generous donation to the Mahogany HOA Monster Mash Event.

On October 29, 2011 (400) residents of all ages turned up for the first Annual Monster Mash in Mahogany. The residents were entertained by the activities like the treasure hunt and body diga, but your generous donation of music equipment and DJ Dexter made the event. Teenagers broke out into spontaneous beach volleyball games at the end of October!! Your generous donation was the backbone of the success of this event and we appreciate your interest in the community of Mahogany. Events like these are not possible without sponsors like you.

Thank you so much for the taking an interest in the community and the families of Mahogany. We hope to keep you informed of future opportunities coming up in Mahogany like the upcoming Dec 17th Festival of lights which is hoped to have media coverage.

Sincerely,
Rhian Wight
Mahogany Homeowners Association
Social Committee, Funding and Donation Chairman

Fall markets are usually a fair bit slower than that of spring markets. For some reason this year’s fall market seems to be off to an even slower start than last year’s even thought the Calgary Real Estate Boards numbers say different. Now I’m willing to wager that a good part of the slowdown is due to the exceptional weather we were having. Having said that, if you’re selling or thinking of selling a property right now you have to be aware that the resale housing market in Calgary is still in a state of flux.

Prices are holding with inventories being relatively high at a 6 – 7 month supply. What I find at odds with the residential real estate market is that the commercial real estate market is doing well. Commercial real estate in Calgary is almost back to pre-recession levels with office and retail space leading the way. The question is will this spill over into the residential market which I still classify as being in a recession?

What I think is going on in terms of the housing market is that business in Calgary is doing well, considering the world economic conditions, and business confidence is higher than in the past few years. Consumer confidence however is not nearly back to the pre 2007 levels. This lower consumer confidence is putting a drag on home sales and its having an effect on the overall housing market.

What I expect to see in this year’s fall residential real estate market is basically just what we experienced in last year’s fall market, slowing sales and somewhat stagnate inventories compared with the spring and summer markets (which also were nothing to write home about). So if you’re thinking of selling you need to be competitive, and better yet if you are thinking of purchasing a resale home, now is defiantly the time.

While the energy sector is running flat out again, and has been for over a year, the follow on pick up in residential real estate has not yet occurred. What I find of interest is that the commercial Real Estate market is doing far better in terms of leasing and office occupancy rates. In fact Calgary office space is getting close to the high water mark set in 2006 and 2007, even with over a million sq. ft. of new space available.

So one would think that sooner or later the residential market will pick up. Yes it will but I am not at all convinced that prices are going to go up. What we will see is a gradual return to a higher overall number of homes sold but prices will most likely remain stable over a very long period of time. Even if oil were to go to $200 a barrel it is not going to drive more projects and more people here than already are coming, all that higher oil prices would do is ensure that those in the oil industry have very long term job security and projects ramp up faster.

What I do expect is that we are on the long haul back to a traditional residential real estate market, where prices are stable and people buy houses to live in, not as some speculative venture in flipping homes to make a fast buck. As a matter of fact I believe the primary reason we are still in a housing recession is that speculation caused a topping effect of home prices in 2006/07, and these overpriced homes have to work their way through the system, this while builders are putting up new homes at much lower prices than in 2006 or 2007.

So I expect a very similar Fall Real Estate Market to what we saw last year with no real increase in the overall number of homes sold, and no price increases until perhaps the Spring market, and even then it’s only going to be a small bump of 2 or 3 percentage points. Just keep in mind it’s a great time to build new or look a moving up.

While the energy sector is running flat out again, and has been for over a year, the follow on pick up in residential real estate has not yet occurred. What I find of interest is that the commercial Real Estate market is doing far better in terms of leasing and office occupancy rates. In fact Calgary office space is getting close to the high water mark set in 2006 and 2007, even with over a million sq. ft. of new space available.
So one would think that sooner or later the residential market will pick up. Yes it will but I am not at all convinced that prices are going to go up. What we will see is a gradual return to a higher overall number of homes sold but prices will most likely remain stable over a very long period of time. Even if oil were to go to $200 a barrel it is not going to drive more projects and more people here than already are coming, all that higher oil prices would do is ensure that those in the oil industry have very long term job security and projects ramp up faster.
What I do expect is that we are on the long haul back to a traditional residential real estate market, where prices are stable and people buy houses to live in, not as some speculative venture in flipping homes to make a fast buck. As a matter of fact I believe the primary reason we are still in a housing recession is that speculation caused a topping effect of home prices in 2006/07, and these overpriced homes have to work their way through the system, this while builders are putting up new homes at much lower prices than in 2006 or 2007.
So I expect a very similar Fall Real Estate Market to what we saw last year with no real increase in the overall number of homes sold, and no price increases until perhaps the Spring market, and even then it’s only going to be a small bump of 2 or 3 percentage points. Just keep in mind it’s a great time to build new or look a moving up.