Malcolm Mawer

December is always the slowest month of the year for home sales in Calgary, followed typically by January. This year is no exception. However, with the downturn in the economy, the collapse in the price of oil, the tightening of credit and buyers' expectations of lower prices in the coming year, sales during the first nine days of December were much lower than for the same period of 07. The stats below are for the city of Calgary and are generated on a weekly basis by the Calgary Real Estate Board.

2008 2007

SINGLE FAMILY HOMES

Sales 155 266

New listings 401 419

Inventory 4890

CONDOMINIUMS

Sales 71 122

New Listings 225 185

Inventory 2512

Activity during the coming weeks will continue to be very slow with Christmas on the way, a major winter storm expected to arrive today and last through the weekend, and my 60th birthday this weekend (this is sure to have a major impact on the amount of work being done, at least by me, for a day or so).

I'm looking out of my office window, across the park behind our home, at a snowy landscape and grey, grey skies. I enjoy feeding the birds in the winter, so filled my eight feeders this morning so that the birds will have something to much on during the storm. Calgary typically get's a cold spell before Christmas, although we often have no snow for Christmas. This weekend it is supposed to drop to -26C, so hopefully this qualifies as the cold snap, to be followed (ideally) by much warmer weather for Christmas.

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.