When prices were skyrocketing, Alberta was praised for bringing up the national average sale price, and now prices are falling and we are to blame for that too! At least according to the media interpreting stats released by the Canadian Real Estate Association yesterday.
According to the report new listings have reached record levels nationally (up 8% from the same time last year), while sales are decreasing (down 13%).
"New listings reached record or near-record levels in Toronto, Vancouver, Ottawa, Regina, and Saskatoon. This more than offset a decline in new listings in Edmonton and Calgary, which continue retreating from peaks in March."
Has Canada finally caught America’s cold?
"The Canadian real estate market, while cooling, is still much different than the U.S. market with its record low number of foreclosures or defaults" says the President of The Canadian Real Estate Association, Calvin Lindberg. In the United States home prices dropped by 14.1 per cent in the first quarter of the year, according to the Case Shiller national home price index."
The stats show prices are up for the first half of the year – 3.2% over last year at the same time and 1.4% from the end of 2007. However, prices for June dropped .4% and this seems to be what the media has grabbed onto.
From the report:
"The slight decline in average price comparison reflects the impact the surge in average price in Calgary and Edmonton had last year. The average price in these markets retreated after rising dramatically last year, but has stabilized since March 2008 in line with a balanced market. "
From the media:
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Housing not so hot, Winnipeg Sun
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Calgary Home Sales Take 32% Slide, Calgary Herald
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First Decline in Nearly a Decade, Metro Canada
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Home Prices Slip for First Time in 9 Years, ReportOnBusiness.com
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HOUSING: Warnings grow of further weakening in Canada, Alberta Index
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Homebuyers get a break as BC house prices flatten, Vancouver Sun
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Housing prices drop across Canada, But Ontario still strong, CityNews
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Home Sweet Home gets Cheaper, The Gazette (Montreal)
Nearly everyone of those articles pegs the price drop on Alberta, when we actually saw average prices increase in June. Oh well, I guess it’s nice to get some attention after years of being ignored!
Anyway, there are certainly interesting times ahead for us (Edmontonians, Albertans, Canadians…Earthlings…), lets hope the ride isn’t too bumpy.
OK its your fault.
Aloha,
Keahi
There are lots of qualified buyers out there who are fence sitting and hoping the trend will continue to be their friend and selection and prices will be in their favour. From what I see, the quality inventory is slowly disappearing, and I think buyers who inked a deal this past few months will be happy with their purchase 12 months from now.
I’ve been pretty bearish lately but I can agree with Ken on that one.
Ken,
Do you know something that none of us do? Where is all the inventory going to go? New listings have outpaced sales for many months.
Any offer is a good offer in this market.
Peter,
All I’m saying is that the gems with a great location, quality renos, and excellent price now count for maybe 1 in 15 listings compared to 1 in 5 a few months ago. Buyers are picking the best fruit and it’s not being replaced by quality product. Again, just my opinion, but a positive sign in my view.
What if you’re buying new?
That’s my plan, unless I find a used home that I really like and is significantly cheaper.
A Jayman showhome that I was watching has dropped $50k since February of this year.
Nate,
That’s certainly not surprising as at one point in Feb/Mar this year a lot of builders dropped prices because the price of re-sale dropped enough in the late fall early winter that it was considerably cheaper than new. Don’t know how much lower they could go though as their cost is x and is fixed. You might offer some lower though and maybe snag yourself a hell of a deal.
Hi everybody!Your main point is interesting and pretty well-founded. I am convinced that people here are aware of the fact the media usually provide the public with much more simplified picture. However, I do not want to deny an effect that might be created by this, but a receptive thinker has to work through a wide-scope approach and include factors like the softening market or even impacts of the global market. As a Vancouver real estate agent, I am sure the RE in Alberta is an interesting area…
Jay
Not all people believe the stats CREB or EREB would like us to believe.
http://albertarealestatewatch.blogspot.com/2008/07/lies-damn-lies-and-statistics.html
Brent,
First of all, what you refer to us is a bubble blog, it should be dismissed altogether, as our Minister of Finance, Fred Flaherty just said, there is no bubble in the Canadian RE market, it’s in today’s Journal, july 17, 2008.
And who would know it better, than the Minister.He’s got all the information, what you don’t.
Second of all, on average, 10-15% drop in prices not really all that bad after a 150-200% gain.
karl,
The drop has just begun. What’s Flaherty’s supposed to say? The Canadian real estate market is in trouble? Ya right, you won’t be hearing that.
Here are some similar past quotes south of us stating the obvious spin doctoring…
August 2005: “There is virtually no risk of a national housing price bubble based on the fundamental demand for housing and predictable economic factors”
April 3, 2006: NAR: “We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations.”
June 27, 2006: NAR: “Right now we are on course for a soft-landing in housing.”
October 25, 2006: NAR: “The worst is behind us, as far as a market correction”
December 4, 2006: NAR: “Its important to focus on where the housing market is now, it appears to be stabilizing, and comparisons with an unsustainable boom mask the fact that home sales remain historically high”
February 15, 2007: NAR: “At least the bottom appears to have already occurred. It looks like figures will be improving”
June 6, 2007: NAR: “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.”
October 10, 2007: NAR: “The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels”
December 10, 2007: “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up.”