Rayna McKay & Mike Frechette

Quick July 2009 Calgary AB Market Statistics:

Calgary's condo market stayed strong for the month of July dispite people turning there thoughts from buying real estate. People focused on things like Stampede, Bar BQs, and Camping; this is how it affectd the July 2009 Calgary condominiums Statistics. Inventory is down again and there were 702 condo sales in the month of July with the median sale price in Calgary at $263,000 which is within $3,000 of last month. Sale prices in July ranged from $110,000 to $1,050,000.

Quick June 2009 Calgary AB Market Statistics:
Calgary Condo inventory is down for the fifth consecutive month, while sales rise bringing our absorption rate to the bottom of a balanced market.  Calgary's condo sales have been on the rise for 7 months, from 208 condo sales in December 2008 to 738 condo sales in June 2009.  Statistically it look like the buyer's market is coming to an end and if these trends continue we may see seller gaining a little more control before the fall slowdown.  Calgary's median condo sale price is $265,500 the highest it's been since October 2008.  The June 2009 sale price range for condos in Calgary was between $117,000 and $1,100,000 being the highest price condo sold in June 2009.

 

The expected return of first-time homebuyers to the marketplace is seen as key to the rejuvenation of Canada's housing sectors, says a real estate industry executive.

A growing number of newbies to home ownership-- considered the largest single buying segment--have been sitting on the sidelines since it became obvious Canada wasn't going to avoid the global recession, says Phil Soper, president and CEO of Brookfield Real Estate Services.

At the height of the housing boom, which started to deflate partway through 2007, first-time buyers accounted for as much as 70 per cent of all transactions, he says.

One of the key reasons --and a positive to the downturn-- has to do with the decline in house prices that followed in the wake of the recession.

"Significantly lower costs of ownership should bring the first-timer back to the kitchen table in increasing numbers this year, which would get the overall industry moving again," Soper told a recent Scotiabank forum on the economy and real estate.

Among the factors he pinpointed that would see the re-entry of first-timers are: - Targeted government incentives that include $750 for closing costs, and an increase in the RRSP withdrawal for a down payment. - Lower-priced homes. The national average selling price has fallen to $288,641, down from $312,852 a year ago, says the Canadian Real Estate Association. - Historically low mortgage rates. - Reduced risk through the return of the conditional offer.

In an interview, Soper said the lack of first-time buyers can stall the real estate market.

"It's like sand in the gears," he said.

Canada has managed to avoid the brutal real estate pounding the United States has had to endure.

There have so far been no wholesale foreclosures here and the credit markets remain fairly healthy. But resale activity slowed and the pace of new home construction shrivelled as consumer demand backed off.

The revival will be slow.

Housing construction starts across the country dropped to slightly more than 211,000 last year, which is about eight per cent below the average of 230,000 starts tallied annually from 2004 to 2007.

At the same time, the number of resale homes changing hands decreased by 17 per cent and the average price slipped one per cent.

Scotiabank has predicted a further decline for new and used housing this year.

Housing construction starts are going to fall to about 155,000, while resale figures will drop another 15 to 20 per cent-- along with another 10 per cent slide in prices.

By Marty Hope, Calgary HeraldJune 6, 2009

To jump or not to jump.

I guess the question that plagues new home buyers is "should we jump in now, or should we wait to see if the market is still dropping?"

Well, if you know someone in this situation, they may have already missed the bottom.

Let's take a few key indicators of what's going on in the market : - Because of the low interest rates there has been a flurry of new home buyers who didn't have to sell their home because they were renting.

People didn't want to list their homes because of the price drop so inventory of houses for sale went down and seems to still be dropping. - What this means is there are fewer homes for sale in the market. - When this happens, prices start to go up. - Now the economy seems to be on a slow but steady road to recovery. - Oil prices are on the way back up (great for the industry in Alberta ). - More jobs in this sector are being created once again which in turn creates jobs in other sectors. - Our banking system is strong (compared to the rest of the world.) - People are feeling better about things. - Take an improving economy and what happens to interest rates? - With people feeling better about the economy more people jump from the safe bond market back to other more risky investments.

When this happens, the bond yield increases. When the bond yield increase so do the fixed rate mortgages.

OK, I have indicated that there is some motivation to jump in to the market because of the low interest rates and the low prices that seem to be increasing.

So, what other motivating factors are there?

The banks and the government have stepped up to the plate to encourage new home buyers to take action: - The banks have decided to create quite a few programs to motivate the home purchaser. - No down payment. The banks call it a cashback mortgage.

There are only three that I know of that will allow you to apply the five per cent or close to that towards the down payment.

Of course, the banks want some protection so they want to make sure you have a good credit score, anywhere from a beacon score of 620 and up.

The lower your credit score, the higher the interest rate. Also, you must have a good job.

It probably won't work for those of you who are self-employed. - The other bank-driven incentives are the quick-close specials. These super low rates are offered to homes that you take possession of within 45 days (some are 30 days).

At the moment, the rate I like is the 3.05 per cent, three-year fixed, quick close rate offered by Street Capital. - The government has also stepped up to the plate. Besides dropping the prime lending rate to a historic 2.25 per cent, the government offered some major incentives to the first-time home buyer.

These include: - A change to the first-time home buyers RRSP plan. This program increased the amount a person can withdraw from his or her RRSP from $20,000 to $25,000.

For a couple purchasing a home this equates to $50,000 without penalty provide you pay this back to your RRSP within 15 years. - Anew first-time home buyers' credit towards closing costs. This program provides up to a $750 tax credit.

Refer towww.fin.gc.cafor more details.

This is what is happening at the moment. Interest rates are on the move up once again and house prices are on the move.

So for those waiting for the bottom, it seems to have come and is sailing away.

Now, I'm not saying the deals are gone. That would be an incorrect statement.

There are great deals to be had at still historic prices--but there is no bottom to wait for. Get in now, as your property will only increase in value--and the interest rate you see now will be gone soon.

By Vic Cotton, Calgary HeraldJune 6, 2009