DECEMBER 2008 - Calgary Real Estate Update

First of all, we wish all of you our very best wishes for the season. We hope you will be spending it with friends and family. I think it's safe to predict that we are going to get a very white Christmas this year. That would be fine with me as long as it stays off of my driveway and sidewalk.

I want to provide you an update of the real estate market, and some general thoughts on next year, to help you with your real estate plans for the new year. Please feel free to call me at 403-251-9992 to chat at any time. It's always a pleasure to hear from you.

Nov 2008 Oct 2008 Nov 2007

Total Actives at end of Month (single family) 5,083 5,522 4,984

New listings during month 1,567 2,322 1,949

Total sales 670 820 1103

Average Days on Market (homes that have sold) 55 48 46

Average Sale Price $435,471 $449,100 $462,134

Median Sale Price $387,300 $390,000 $407,500

Sale Price/List Price 95.45% 96.14% 96.65%

Total Actives at end of Month (condos) 2,399 2,640 2,196

New listings during month 741 1,071 890

Total sales 284 399 496

Average Days on Market (condos that have sold) 51 50 44

Average Sale Price $285,820 $289,148 $312,710

Median Sale Price $251,800 $268,000 $285,000

Sale Price/List Price 94.63% 95.54% 96.95%

The number of sales, both for single family homes and condos, declined approximately 40% in November compared to November 2007. Overall average and median sale prices for single family homes declined by 5-6% year over year, while for condos, prices declined by about 12%. The much higher price decline for condos is a reflection of the huge condo building boom Calgary experienced during the last few years and the fact that many of those units, bought prior to construction by investors, are now completed and must now be sold, resulting in a glut of inventory and weak prices.

In an overall sense however, it is clear that the Calgary real estate market, while in a corrective mode, is not experiencing the massive problems and price collapses seen in the US. Given that their problems have been ongoing for a couple of years, it is unlikely that we will see a price collapse here. Early predictions for 2009 that are starting to appear suggest that Calgary will experience a similar number of home sales in 2009 compared to 2008. RE/MAX is predicting that home prices in Calgary could slip by a couple of percent during the year. RBC today issued a report stating that in their opinion home prices in Alberta are still too high compared to wages, and predicting continued price weakness in the coming year. There will be many economic forecasts during the coming couple of months and only time will tell who is right, but it is very likely that we will continue to experience a buyers' market during the coming year. Major factors that will come into play next year, both positive and negative, include the price of oil and gas and their impact on employment numbers, the ongoing problems with the stock market, Canada's economic strength (or weakness) and what short to medium term effect government stimulus packages have on the real estate market.

Historically up to 2/3 of total sales for the year, as well as the highest prices, occur during the first half of the year. This has been emphatically true during the last three years. I would therefore recommend that if your plans include selling your home or investment property in 2009, you should be considering listing during the first few months or early spring at the latest. As always, it would be our real pleasure to assist you with all of your real estate needs.