High real estate prices are sparking a surge in unorthodox housing – and new ways to think about insuring a home

From tiny homes to laneway dwellings, Canadians are embracing an increasing range of unique and unusual abodes. But whatever you choose to call “home,” chances are a team of insurance professionals have been working on coverage specially designed to underwrite you.

Tiny homes are increasingly common, especially in urban areas where housing costs have skyrocketed, says Stefan Tirschler, CIP, product and underwriting manager, Square One Insurance Services Inc.

“In the beginning, tiny homes were lived in by a small community of people experimenting with a new way of living,” he says. “Today, we’ve seen zoning changes across the country, and that’s resulted in a wide range of small dwellings on the market. This includes anything from miniature frame homes, portable frame homes on wheels, tiny homes built from shipping containers, laneway homes—even yurt-style homes.”

Tirschler notes that underwriting for tiny homes tends to build on safety standards for existing homes or materials used in the structure.

“For example, a shipping container home is likely to be similar in coverage to a standard home once it’s been delivered,” he says.

Smaller prefabricated or manufactured homes have also become more common. A manufactured home is typically delivered to the site on a chassis, lifted off and mounted onto a foundation. A slight variation, a park model home, remains on the chassis, but can be lived in as a permanent residence.

“The question we ask ourselves as underwriters is, where do these homes fit and to what standard do they need to be built?” says Michael Hewett, senior product manager, leisure and lifestyle, with Aviva Canada Inc. “The Canadian Standards Association, for example, offers standards for manufactured homes and park model homes. We also look to these same standards as a basis to underwrite tiny homes that are built in a similar manner.”

He notes, however, that owners of manufactured homes should seek an appropriate amount of coverage for additional living expenses.

“A manufactured home may have lower value, but it could take up to year to order a new home from a manufacturer,” Hewett says. “We allow customers living in these homes to buy additional coverage for living expenses.”

Homes designated as heritage buildings also offer unique challenges for underwriters, says Jackie Murison, FCIP, CRM, ICP, portfolio and innovation specialist with The Commonwell.

“The policy must take into consideration when the home was built, whether someone of cultural or historical importance lived in it, or any unique building materials that must be used in a rebuild,” she says. “You couldn’t replace plaster walls with drywall or stained glass with regular glass. The homeowner won’t have a choice on that. Properly valuing those rebuilds can be a big challenge.”

She notes that the Town Hall in Lindsay, Ont., is a heritage building that happens to be two feet out of alignment because the builder shifted the surveyor’s pegs.

“If there was an insured loss, that same alignment would have to be considered,” she says.

High-value homes also require custom coverage, says Anthea McFarland, CIP, senior vice-president, personal insurance at HUB International.

“In many cases, we’re talking about homes with an average value of up to $1,000 per square foot, reflecting such building materials as the most valuable marble and granite finishes,” she says. “We send out specialist appraisers to these homes to come up with a number that covers exactly how much it would cost to replace the custom detail in these homes.”

Often, Canadian owners of high-value homes also own properties in the U.S., the Bahamas or the UK, and brokers such as HUB International work with a global network of insurers to cover all of the dwellings under a single policy.

“High-net-worth insurers also offer a range of additional policy coverage,” says McFarland. “These can cover anything from appliance failure and maintenance, kidnap or ransom insurance, and even cyberbullying insurance, to cover the services of a therapist for child victims. Some clients also request standalone insurance policies to cover specialized art collections, including van Goghs and Warhols. As a broker for this client group, we endeavour to be a one-stop shop.”

Canada’s housing market continues to evolve in fresh new ways.

“Technology continues to reduce the distance between customer and underwriter,” says Tirschler. “We’re much better positioned to take notice of customer needs and expectations and adapt and respond to them much more quickly – wherever and however they choose to live.”

This article was created by Content Works, Postmedia’s commercial content division, on behalf of the Insurance Institute of Canada.

-Calgary Herald

How to choose the right Agent Part 3 – Things you need know before you list your home

Over the last two days we have talked about your Realtors networks and Passive vs. Active Marketing but there are a few things that you should know about listing your home that will set you up for success when you are ready to put your house on the market!

  1. Neat and Tidy

We know that you love your home, and you might have kids and kids can be messy, or maybe you have pets and sometimes pets smell. Realtors have homes, with all of these same things, I promise we don’t all live in pristine real estate marvels, in fact if you walk into my house I can promise you will be tripped by a hockey stick or a dog toy, BUT I cannot emphasize this enough, your home needs to be spotless for photos and for showings. it sucks, we all know this, it is hard to keep your home in show home shape, but it will not sell if it isn’t. Try and have it “show home” clean when you have your Realtor interview so that they can get a clear picture of what your home looks like on its best day!

2. Listen to your Lister

You are obviously going to have a conversation with your Realtor about the listing price of your home. Realtors have tools that they use to identify what your home should be listed at, these tools (called CMA, which we will talk about in a later post) combined with a savvy understanding of the current market conditions your Realtor can usually pin point pretty close what your home should be listed at and ultimately what it should sell for. One fatal flaw in home owners is that they don’t listen to this number, typically because they think their house is worth more. Some Realtors will push back because of knowledge and expertise, some will take the listing at a higher price tag, simply to get your listing… when this happens you can find yourself in a vortex of price dropping and haggling with offers when and if they come in. If your home is priced right (not too high or too low) it will sell. Don’t be afraid to ask questions about list price, but ultimately if your Realtor has stats to back the price point… take their advice.

3. Clear the Clutter 

This is your home, of course you would have personal touches, nik naks and frames. maybe some crazy feature walls, or novelty rooster collections. We know you love these items, we do too. BUT potential buyers don’t. Most people when viewing a home cannot look past the esthetic and see true potential of their own items in a home, in fact they have the same problem with empty spaces. This is why a staged home will always sell faster 10/10 times. You can start this by packing up any personalized items and clutter. particularly toys, and collections, photos and other chachkeys that can be distracting for the potential buyer. Think of it as a head start on packing for your move out!

4. Be flexible and realistic

Thinking about upcoming showings can be overwhelming and daunting, but showings are good, they are the pass that takes you right to the touchdown, showings is where your offer will come from. The worst part; showings aren’t typically a 9:00-5:00 job. Now, this is still your home, you call the shots. It is really important that you are as flexible and realistic when setting schedules with your agent. If you have a 2 year old, maybe any showings after 7:00pm aren’t acceptable, maybe you need 24 hours notice before a showing, these are normal requests and completely acceptable! it is your home after all. Set clear expectations with your agent, but be mindful that if they call you and someone wants to see your house in the next 3 hours and you say no… that could have been the person who wanted to buy it.

5.  Be patient, and communicate 

If you have questions about your listing, the market, the last showing… the weather you need to know that you should be asking! Your agent should be keeping you informed about your listing, but if you’re not getting what you need, call them! Some agents even have review software that will generate feedback immediately following a showing, really good agents follow up with the buyers agent to try and close a deal, or at the very least find out why they didn’t choose your home, and the Great agents bring in their own buyers… from that network we talked about!

How to choose the right Agent Part 2 – Active Marketing

How important is marketing in Real Estate you ask? In short… it is incredibly important, in fact it can mean the difference between a sale and you sitting frustrated on your property for months, it can also be the difference in your listing becoming stale in the market because it sits for too long with little to no exposure.

I like to think that every Realtor has their own tips and tricks that they use to generate business, employ smart marketing techniques and do the very best for their client. The truth is, at the end of the day it breaks down to two types of agents. Active and Passive Marketers.

  • Passive Marketing

Every Realtor does this, and some pawn it off as highly effective marketing tools, but at the end of the day they are waiting for the business to find them. Waiting for the buyer to call. Passive marketing is listing the home on MLS, putting it on a website, (that may or may not generate google ad words). There is nothing wrong with passive marketing, and every Realtor should do it because there is always the online buyer who shops around and can and will find you on MLS, but it isn’t exceeding expectations and it isn’t going above and beyond.

  • Active Marketing 

Active marketing is when the rubber meets the road. We talked in my previous post about SELRES_9462f936-7d9e-4c3b-a82d-5fcb73a642d1NetworksSELRES_9462f936-7d9e-4c3b-a82d-5fcb73a642d1and this has a lot to do with that. Active marketing is when your Agent is actively searching the market for a buyer for your home. They can do this through their network, through lead capture services that they can deploy through various social media channels, and their website. Your Realtor should create a brand for your home. Does your Realtor use a professional photographer? are they a professional photographer? do they do home staging? what do they charge for home staging? All of these tools tie together and make your home sale something extra special, not just another MLS number on the proverbial YYC Real Estate shelf. Now, marketing costs money! The right kind of marketing costs lots of money! This is why you hire a Realtor, so you don’t have to navigate this alone. Always make sure to ask what the price tag is attached to any marketing plan when you are discussing commissions, offering photos and home staging is great, but ensure you know what that will cost you in the end. We will talk about where your money is going in a later post!

Kevin D’Costa Fun Fact! Did you know that I am an accredited staging professional RE. Did you also know that I offer this service to all of my clients? The best part, you rarely have to run out and buy thousands of dollars worth of furniture, usually just some minor esthetic and décor items are enough!

The point I am trying to make is this; When you’re interviewing a Realtor do not be afraid to ask them what exactly they are going to do for you? how are they going to market your home? Now that you know if you get the “I have a great webpage and I will list it on MLS” are the wrong answers, you can ask for more. expect more!

How to choose the right Agent Part 1 – What is in a Network

I have always received these questions, periodically, but lately it seems like almost daily I am asked “how do I choose the right realtor to sell my home”. I have always been an advocate of interviewing agents and ensuring that you have the right fit for you. You should never choose a Realtor without knowing and understanding how they are going to work for you! I am writing a part mini series that will include some insider tips on what to look for in a Realtor and very specific things to ask while you’re interviewing. Choosing someone to sell your home is a very important choice, I want to make sure you know what to look for!

A Realtors network is like a golden ticket. Most might think “The bigger the team and the fancier the website the quicker the sale” This isn’t necessarily true. Your realtor should have a network of potential buyers, sellers, Realtors, Mortgage professionals, lenders and brokers that work as a team to get the job done. Ask your Realtor about his or her professional network, you very well could be interviewing a Realtor that has a client just waiting to put an offer in on your home, they were simply waiting for that special something to come along. Real Estate professionals can’t work in silos, the biggest key to success in Real Estate is to have a respected group of people who you connect with regularly.

I recently did a study on first time home buyers in Alberta. 23% of those who responded said that they were not in the market to buy a home. The top reasons being 1. down payment and 2. Mortgage approval. As the study continued it became glaringly obvious that for MOST of this 23% home ownership was actually attainable, they simply were not educated or up to date on what options are available to them. My point here is this; Take **John and Susie for example. Looking for their dream home which is a 1200sq ft. front attached garage home in Windsong. They believed they would never qualify so they were waiting and saving… waiting… and saving. I had the opportunity to list a 1300sqft home in Windsong that would be PERFECT for this growing family. You guessed right… Because I have a trusted network of professionals we had their down payment sorted out, had them Mortgaged (with a pretty great rate to boot) and into this home. Their Mortgage payment is less than they were paying in rent and they OWN it! All of this they originally thought was unattainable. Now, This is a stellar example because Bob and Betty were able to sell their home before it even hit MLS for 24 hours and John and Susie were home owners, but not unrealistic with the right opportunity and the right network of Real Estate wizards working together! Every thing is impossible if you don’t try! Your Realtor should always try! with everything they have got! So when you’re interviewing, ask them this; “What does your professional network look like, and how are you going to step up to the plate for me?”

** Names and communities changed for privacy

High demand lifting Calgary region housing market – Outlook strong for increased starts, sales and prices

A high level of demand will continue to lift housing starts, MLS sales and average house prices this year in the Calgary region, according to a report released Thursday by Canada Mortgage and Housing Corp.

The agency’s first quarter 2014 Housing Market Outlook said housing starts in the Calgary census metropolitan area will reach 14,100 units in 2014 before declining to 13,500 in 2015. They were at 12,584 last year.

The report said a record level of migration in 2013 will help lift MLS sales from 29,954 in 2013 to 31,300 units in 2014 and to 32,100 in 2015 and the high level of demand is expected to be met by more supply which will help lift the average price from $437,036 in 2013 to $449,000 in 2014 and to $460,000 in 2015.

“Calgary has experienced a large inflows of people and employers are projected to continue to expand their payrolls. This will be an active year for the Calgary real estate market,” said Lai Sing Louie, the CMHC’s regional economist for the Prairie and Territories Region in Calgary.

The level of MLS sales is below but approaching the record of about 33,000 transactions in 2006.

“Tight conditions in the resale market will have some buyers looking to the new home market to meet their needs this year. By 2015, it is expected that supply levels in the new home market and a wider selection of listings in the resale market will help moderate new construction activity.”

CMHC is forecasting the rental vacancy rate in the Calgary region to climb from 1.0 per cent in 2013 to 1.2 per cent this year and to 1.5 per cent in 2015. It also forecasts the average rent for a two-bedroom apartment to rise from $1,224 in 2013 to $1,280 this year and to $1,320 next year.

“Calgary’s housing market is one of the strongest in the country, and is expected to remain so for the foreseeable future,” said Ben Brunnen, an economic consultant in Calgary. “The increased demand for housing is being driven by strong fundamentals such as robust population growth, low vacancy rates, high rents, and growing wages. These underlying conditions provide confidence that the price and sales growth we’re seeing right now are economically sustainable.

“Looking ahead, with the low Canadian dollar and stronger housing demand in the U.S., watch for price appreciations in the cost of new housing, which could put increased pressure on Calgary’s housing market.”

The Calgary and Alberta housing markets will be buoyed in the coming years by strong net migration numbers. CMHC estimates net migration to the province in 2013 will be 103,000 people followed by forecasts of 71,000 in 2014 and 63,000 in 2015.

In Alberta, after reaching 18,431 units in 2013, single-detached starts are projected to increase to 19,100 in 2014 and remain near this level at 18,800 in 2015. After increasing to 17,580 units in 2013, multi-family starts in Alberta are projected to rise further to 18,000 units in 2014 and then moderate to 17,600 units in 2015, said the CMHC.

In the resale market, MLS sales are projected to rise from 66,080 units in 2013 in Alberta to 68,500 in 2014 and to 70,100 in 2015. The average MLS price in the province will increase from $380,969 in 2013 to $391,100 in 2014, and then rise to $401,000 in 2015.

 

© Copyright (c) The Calgary Herald

2014 looks strong for Airdrie real estate market

The Airdrie housing market had a very strong year in 2013 with pricing returning to the peak levels of 2007.

Now looking to 2014 the Calgary housing market is expected to continue growing, which should push Airdrie housing prices up further as well.

As homes get less affordable in Calgary, buyers will look for less expensive options and head out to the smaller centers.

With our location and with so many amenities, Airdrie is often many buyer’s No. 1 choice as their place to call home. To put some perspective to the affordability, we’ll look at benchmark pricing (benchmark means the typical home).

For a look at what is considered typical please see our blog dated Jan. 6 at airdrieliving.ca

Through the third quarter of 2013 the typical home in Calgary was selling for $470,600 while in Airdrie the typical home sold for $365,900 for a difference of almost $105,000. However, in Airdrie we all know that two storeys are king and what builders will continue to build.

So it certainly makes sense to look at benchmark pricing for the typical two-storey home as well.

The typical two- storey home in Calgary sold for $508,400 and in Airdrie sold for $402,200 for a difference of more than $106,000.

With these kind of savings on the largest investment most people will ever make, it is easy to see why so many buyers are willing to move out of the city and why Airdrie continues to grow by 11 people a day, with half of them coming from Calgary.

To add to rising prices, in 2014 the Calgary real estate board is predicting an increase of 4.3 percent for the city of Calgary with the first half of the year being stronger than the second half.

This along with interest rates expected to climb slightly, Airdrie’s affordability will remain high compared to Calgary, which should also continue driving prices up here.

Another key factor for the Airdrie market will be housing starts.

If starts increase, this will help alleviate some of the pressure on resale homes.

However, if starts remain around the same then we will continue to see a low number of available homes on the market, which again could push prices up even further.

While I wish I had a working crystal ball and could tell you exactly what’s going to happen, that is just not the case. We live in a world of ever changing factors and in Alberta we are of course dependent on oil.

If oil goes up then housing prices will probably go up, if they go down then pricing will likely all relative. If you sell when prices are high chances are you will buy when prices are high.

Same goes when the market is low. So when people ask me, ‘when is it the best time to list my house?’ my answer is always ‘when you want to sell because you never know when the right buyer for your house is out there looking and if you are not on the market they will not find you.’

So regardless of pricing make the decision based on your needs.

So the good news is all factors are leading towards a strong 2014.

-Airdrie Echo

Calgary area new home prices on the rise to record level – Single-detached average forecast to reach nearly $600,000 this year

A number of factors has pushed new home prices in the Calgary region higher with a forecast of the average absorbed price for a single-detached property to rise to nearly $600,000 this year, which would be a record.

Canada Mortgage and Housing Corp. measures prices in the new home market when a property is “absorbed” which means the unit is no longer on the market as it has been sold or rented.

The federal agency is forecasting the single-detached average absorbed price in the Calgary census metropolitan area to increase to $598,000 this year from a forecast $583,000 in 2013 and $580,135 in 2012.

Doug Whitney, vice-president of sale for Crystal Creek Homes and president this year of the Canadian Home Builders’ Association-Calgary Region, said a number of factors will lead to higher new house prices this year.

He said the industry is seeing pressure on its own prices for materials such as drywall, concrete, heating, insulation – a lot of the components that go into building a home.

“There’s an uptick in the U.S. housing construction industry. So there’s a little more competition for materials,” said Whitney. “It’s a supply and demand thing. They’re a bigger market than we are and they’re starting to come alive. It’s going to drive up those basic costs for us here.”

He said most of the builders have been absorbing a lot of the cost increases from 2012 and 2013 but with the current sellers’ market in the resale sector, characterized by low supply and high demand, that will also impact decisions made by some builders on prices this year.

“Probably one of the biggest components that builders have to be aware of is the upward pressure on land prices, which is a huge component in the price of a home,” added Whitney.

“So if it’s costing a developer more to bring land to market, or if there’s a shortage of (land) and they’re charging more, the house price is going to be higher,” said Whitney.

Teresa Centanni, area sales manager for Douglas Homes in the Kinniburgh community in Chestermere, said prices are going up for a number of reasons including a strong economy, attracting more people moving here, which is driving up housing demand. Also, there is a low inventory of active listings in the resale market these days.

She said homebuyers like the idea of a builder’s warranty on a new home and having the ability to have some input on the home’s specifications before it is built.

“We already had a price increase on September 1. Our trades increased their prices due to the flood (in June) and there’s going to be another three to four per cent price increase they’re predicting for March, April. We’re trying to do our best to keep our prices.”

According to the CMHC, the number of single-detached absorptions in the Calgary CMA until the end of November was 5,622. It’s the latest data the agency has for the market. In 2012, there were 5,429 absorptions which was up from 2011 at 4,733.

The following is the Calgary CMA single-detached absorbed price for each year back to 2000, according to the CMHC: 2000, $225,996; 2001, $239,454; 2002, $242,525; 2003, $267,106; 2004, $285,321; 2005, $315,796; 2006, $353,662; 2007, $474,511; 2008, $581,800; 2009, $547,795; 2010, $514,466; 2011, $547,670; 2012, $580,135; 2013 (forecast), $583,000; and 2014 (forecast), $598,000.“We’re starting to see growth in prices for new homes. There’s a number of factors contributing to this,” said Richard Cho, senior market analyst in Calgary for the CMHC. “One is our economy has been growing so with that we’re seeing stronger demand for housing. Also, with the supply in the resale market coming down as well, we’re seeing more people look to the new home market for their housing needs.

“Also, with the new home price, we’re also seeing more pressure on costs, materials, labour. That’s also contributing to the increase in the home price.”

He said labour market conditions, demand for materials and land costs are expected to maintain upward pressure on home prices this year.

As a comparison, the following is the average yearly MLS sale price for single-family homes in the city of Calgary, according to the Calgary Real Estate Board: 2000, $194,202; 2001, $201,137; 2002, $221,028; 2003, $237,081; 2004, $251,558; 2005, $287,125; 2006, $400,081; 2007, $471,852; 2008, $460,057; 2009; $442,828; 2010, $461,420; 2011, $466,509; 2012, $481,259; and 2013, $517,887.

 

© Copyright (c) The Calgary Herald

Calgary MLS listings significantly down from last year Pushing prices upwards

The single-family home inventory of 1,515 MLS listings is the lowest level to begin a year since 2006 and it’s the second fewest active listings in a decade to begin a year, says a Calgary realtor.

According to research by Mike Fotiou, associate broker with First Place Realty, there were 2,236 active listings in the city’s overall real estate market to begin the month of January, down 17.9 per cent from a year ago.

In January of last year, there were 1,267 fewer homes for sale in Calgary, representing a 31.8 per cent reduction in listings from the 3,989 the city had to start 2012.

“Calgary’s market has worked through the glut of inventory we experienced after the boom in 2008 when speculators expecting house prices to continue their meteoric rise were left holding multiple properties,” said Fotiou. “Record levels of net international and interprovincial migration in Alberta over the past couple years has resulted in high demand for housing. In Calgary’s resale market, continued strong sales have kept inventory low despite a rise in new listings.

“The new home sector has benefited as buyers looking for quick possession turn to builder spec homes. We’ll likely see more construction this year as new home builders step up to meet demand.”

As of Sunday, Calgary Real Estate Board data indicates total active listings in the city at 2,302, down 17.46 per cent from a year ago while the single-family inventory has dropped by 18.39 per cent to 1,549.

The lack of listings, combined with continued demand, has pushed prices upwards. Calgary’s resale housing market finished 2013 with all-time records in average sale prices for total MLS ($456,703) and single-family homes ($517,887).

Records were also set in 2013 for the median sale price for total MLS at $401,000 and for single-family homes at $450,000. The median price rose by 5.53 per cent from the previous year for total MLS and it was a 7.14 per cent hike in the single-family market.

Ann-Marie Lurie, chief economist at CREB, said it’s only a week into January so it’s difficult to see what the trend will be for sales and listings during the month.

“What we had been seeing throughout last year is that in the second half of the year those listings were actually starting to improve. The level of new listings,” she said. “Now, overall the inventory levels are still relatively low compared to what they had been in previous years.

“I would be concerned if I still saw those active listings basically declining and new listings declining. That would concern me more than what I am seeing now. Because we’ve seen new listings start to rise, that actually means that decline in active listings is starting to improve.”

On a historical basis, she said, active listings are still trending higher than the lows the real estate market experienced in 2006 during the housing market boom.

“That’s a good sign. We’re not as tight as we were back then,” said Lurie.

“Looking forward, active listings they have been declining. Will they continue to decline? It will depend on if we continue to see these new listings rising. If new listings keep going up, this should help alleviate some of the supply pressure in the market. That tends to happen as prices increase. Another thing to note is you’re starting to see some increased activity in the new home sector which should start to ease some of the pressure on the resale market.”

 

City of Calgary MLS Market
Year
Sales
New
Listings
Sales to
new listing ratio
2004
22,842
35,230
0.65
2005
26,833
32,962
0.81
2006
27,426
37,539
0.73
2007
26,611
44,644
0.60
2008
19,084
45,244
0.42
2009
20,668
32,588
0.63
2010
17,218
36,944
0.47
2011
18,494
34,068
0.54
2012
21,204
31,844
0.67
2013
23,489
32,153
0.73

 -Source: Calgary Real Estate Board

 

© Copyright (c) The Calgary Herald

Booming luxury market pushes Calgary house prices to records

A booming luxury market, and tight overall conditions with listings not keeping pace with demand, has pushed Calgary house prices to unprecedented levels.

Average sale and median prices hit all-time records for the city in 2013 for both total MLS transactions and in the single-family home category, according to data released Thursday by the Calgary Real Estate Board.

The average sale price for total MLS reached $456,703 for the year, up 6.54 per cent from 2012, while the single-family average price rose by 7.61 per cent to $517,887.

The median sale price for total MLS was $401,000 and it was $450,000 for single-family homes. The median price rose by 5.53 per cent from the previous year for total MLS and it was a 7.14 per cent hike in the single-family market.

Also, December capped a solid year for the residential real estate market with the highest-ever monthly average sale price at $527,764, eclipsing the previous record of $526,546 set in June 2013.

“Momentum was building from the last quarter of 2012,” said Christina Hagerty, a realtor with RE/MAX Realty Professionals in Calgary. “We approached 2013 with low interest rates, one of the lowest unemployment rates in the country and the lowest vacancy rate in the past decade. Employment growth and higher than expected net migration into the city helped support the demand for housing and increased sales and pricing. 2013 was an extremely busy year for us with informed and prepared purchasers.

“People talk about the flood adding to this, but I focus on the amazing ability for a city to rebound in a very short period of time. Something that may have devastated other major centres. I believe that this is largely due to the sense of community and the job market allowing people the ability to rebuild.”

The previous records for average sale prices were set in 2012 at $428,649 for total MLS and $481,259 for single-family homes. The previous records for median prices were set in 2007 at $382,000 for total MLS and in both 2007 and 2012 at $420,000 for the single-family market.

Average prices in the city ballooned this year as a result of a strong luxury market that set a record for most transactions ever at $1 million or more.

devastated other major centres. I believe that this is largely due to the sense of community and the job market allowing people the ability to rebuild.”

According to Mike Fotiou, associate broker with First Place Realty, there were 727 luxury home sales in 2013, which was a 33.6 per cent hike from the previous annual peak in 2012. The year was marked by 10 consecutive months of new monthly sales records. Only January and December did not set records in 2013.

Total MLS sales in the city reached 23,489 units in 2013, up 10.78 per cent from the previous year. New listings of 32,153 were up 0.97 per cent but active listings at the end of December were down by 17.80 per cent to 2,235.

“Companies are recruiting professionals across Canada and globally and this has put Calgary on the map as a thriving metropolis of opportunity and a safe place to raise their families,” said Hagerty. “With vacancy rates at one per cent and an abundance of job opportunity, there is a confidence in the city. 2014 looks to continue with solid growth fueled by sound fundamentals.”

MLS sales and percentage increase from 2012 for different housing categories were: single-family, 16,302, 7.92 per cent; condo apartment, 4,007, 14.45 per cent; condo townhouse, 3,180, 22.40 per cent; and towns, 4,516, 13.81 per cent.

Average sale price and percentage increase from 2012 were: single-family, $517,887, 7.61 per cent; condo apartment, $299,517, 5.17 per cent; condo townhouse, $341,116, 7.73 per cent; and towns, $381,884, 9.55 per cent.

Median price and percentage increase from 2012 were: single-family, $450,000, 7.14 per cent; condo apartment, $261,000, 3.78 per cent; condo townhouse, $306,000, 6.45 per cent; and towns, $355,700, 6.18 per cent.

Scott Bollinger, broker with the ComFree Commonsense Network, said prices in Calgary climbed because of increased sales and listings not keeping pace with the demand.

“Most notably in 2013 we saw rising wages, low interest rates and record in-migration. So it’s not surprising after three to five years of relatively little price growth, and despite the steady employment and the wage growth along with record low interest rates, that prices surged this year,” he said.

“Add to that the Alberta and Calgary economies outperformed almost every other region in Canada in 2013 by a wide margin, which had the effect of attracting all of those people. But the interesting thing is that 70 per cent of the net migration to Calgary in particular was international. And the other thing about the migration was that we set a record this year for the growth of the cohort of ages between 25 and 45 and those people, along with the international crowd, are most likely to engage in household formation.”

Bollinger said he is surprised that the listings didn’t catch up with the sales. He said the market might expect to see more of a reaction from the listing side early in the new year.

“If we don’t see that increase in listings, I think we’re going to continue to see farily significant price increases,” said Bollinger.

In a statement, Ann-Marie Lurie, CREB’s chief economist, said sales growth exceeded expectations in 2013, pushing above long-term trends.

“Two consecutive years of elevated levels of net migration, combined with an improving job outlook and confidence surrounding long-term economic prospects, supported the demand growth,” she said.

“In 2014, both sales activity and prices are expected to improve, but not at the same pace recorded this year. While factors influencing demand will support growth in 2014, rising listings and increased competition from the new home sector should alleviate some of the supply pressure in the market.”

Those factors, combined with potential increases in long-term lending rates, should take some of the steam off the exceptionally strong price growth recorded in 2013, said Lurie.

 

© Copyright (c) The Calgary Herald

Alberta expected to outperform national housing markets – Tight supply conditions to lift prices

Alberta will likely outperform national housing markets in 2014, says the new Global Real Estate Trends report released Friday by Scotiabank Economics.

“Relatively firmer employment and income gains and strong population growth are expected to underpin modestly higher home sales and steady new construction, while tighter supply conditions lift prices,” said the report authored by Adrienne Warren, the bank’s senior economist and real estate specialist.

The report said Canada’s housing market in 2013 outperformed expectations. The end-year tally for national home resales will be largely on par with 2012 and in line with the average pace of the past decade, it said.

National prices are on track for roughly a five per cent annual gain “with the average skewed higher by the strong sales rebound in several high-priced markets, including Vancouver and Calgary.”

According to the Calgary Real Estate Board, year-to-date up to Thursday, there have been 23,172 MLS sales in the city, up 10.92 per cent from the same period last year while the average sale price has risen by 6.54 per cent to $456,849.

The report said “a moderately lower level of resale transactions” is expected nationally in 2014. But steady job and income gains combined with strong population growth in the key first-time homebuyer demographic will continue to underpin housing demand.

“Overall market conditions are expected to remain fairly well balanced, with sellers responsive to underlying market conditions,” said Warren. “We expect national average home prices will be relatively flat next year. Downside price risk is greater in the more amply supplied high-rise segment than for single-family homes.

“The risks to the Canadian housing market appear fairly balanced. Cautious business hiring, muted wage growth, high household debt levels and affordability pressures could lead to a sharper slowdown in housing activity in 2014. At the same time, gradually improving global growth, still-attractive borrowing costs and population growth in key demographic segments are supportive of housing demand.”

 

© Copyright (c) The Calgary Herald