Calgary house prices to inch toward $500,000

Real estate board predicts 5% gain in 'normal' market

The average sale price of a single-family home in the city will flirt with the half-million-dollar mark this year, according to the Calgary Real Estate Board.

In its 2008 forecast Wednesday, real estate board president Ed Jensen said the MLS average will increase by five per cent this year to $495,800 while condominium prices will rise by six per cent to an average of $335,300.

Total sales will dip by five per cent for both the condo and single-family markets, to 7,700 and 17,500 respectively, compared with 2007.

"Two thousand and eight will be a good year and a year of opportunity for serious buyers and sellers," said Jensen. "Seeing a solid Alberta economy, strong employment, predictions of movements to past levels of net migration, I see the Calgary market moving closer to normal market conditions -- as normal as Calgary can be."

According to the real estate board, single-family homes in the city averaged $472,230 in 2007, up 17.94 per cent from $400,398 in 2006. The average sale price of a condo was $316,370, an increase of 19.98 per cent from $263,684 in 2006.

Single-family sales in 2007 were 18,438, down 3.5 per cent from the 19,113 recorded in 2006, while condo sales dropped by 1.9 per cent to 8,236 units compared with 8,396 the previous year.

Lai Sing Louie, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said the organization's forecast for 2008 is similar to the real estate board's.

"We're looking at about 5.5 per cent moderation in MLS sales and our price growth is in the same ballpark. We're looking around the 3.5 to five per cent level, too," said Louie. "There is a lot of supply out there. Going into the last part of the year we saw demand ease off. Some of that was because of the higher prices, but also there is a lower level of net migration that we're seeing coming to Alberta."

Several different real estate reports in the latter part of 2007 predicted average price growth in Calgary ranging from zero to 12 per cent.

Jensen said the resale real estate market in 2007 came in like a lion and went out like a lamb. In the past six years, the city has experienced one of the hottest real estate markets on record.

But in that atmosphere speculators and flippers have also come into the market and impacted its direction.

"A portion of the real estate market has always had an investor component where most adhere to an invest-and-hold program," said Jensen. "This type of investor is great for the marketplace, but investor flippers don't care about the community and can create an artificial demand, which contributes to an artificial price increase situation."

The Calgary market overheated in the past couple of years, setting records in nearly all areas and straining affordability, he said.

But a change happened in the past few months. The city moved from a seller's market, where the sellers could name their price, to a buyer's market where there is a better supply of homes giving buyers better choice.

"We're just coming off two record years," said Jensen. "Obviously, there's lots of speculation with a lot of outside investors coming to the economy and I believe that artificially created new listing environments."

The real estate board forecast for acreages and recreational properties indicates listings and sales will both decline by five per cent in 2008. The average sale price for rural properties will jump by five per cent to $875,600.

For surrounding towns, sale prices will rise by five per cent to an average of $396,000.

Ed Jensen predicts a year of balance

It was described as a Jekyll and Hyde year in 2007 for the local residential real estate market.

When the year was over, the average MLS sale price of a single-family home in Calgary rose by $72,000 in 2007 compared with the previous year, while the average price of a condominium jumped by nearly $53,000.

According to the Calgary Real Estate Board, single-family homes in the city sold for an average $472,230 this past year, up 17.94 per cent from $400,398 in 2006. The average sale price of a condo was $316,370, an increase of 19.98 per cent from $263,684 in 2006.

Single-family sales in 2007 were 18,438, down 3.53 per cent from the 19,113 recorded in 2006, while condo sales dropped by 1.9 per cent to 8,236 units compared with 8,396 sales the previous year.

It's in this market that 51-year-old Ed Jensen takes the reins as president of the real estate board this year from outgoing president Ron Stanners.

Jensen has been in the industry since 1979 and is operating principal and CEO of Keller Williams Realty South.

This morning, he gives the city the real estate board's outlook for the market in 2008 at the Calgary Real Estate Board Forecast 2008 Conference and Trade Show at Stampede Park.

He was interviewed recently by the Herald.

Q: How would you describe the real estate market in 2007?

A: The real estate market at the beginning of 2007 was a continuation of 2006. It came in like a lion or a firestorm. (For) 2006, it came in fast and hot and so did 2007. . . . Huge demand for product from the buying sense and homes couldn't keep on track. There weren't enough homes in the inventory to meet that demand; consequently, that drives prices.

Q: Were you surprised by what happened last year?

A: 2007 turned out to be a great year statistically. I was not surprised that it had to change because I don't think any economy or any industry in an economy could keep up the pace which we were running. We saw price increases of $10,000 to $15,000 a month on properties and that's just not sustainable. I don't think it was any surprise to anybody that somewhere in there we had to turn."

Q: What is going to happen this year?

A: That's the crystal ball. Employment is great, net migration is going to be down . . . but it still shows a great number which supports demand, interest rates (are good as is) the general economy of Alberta and the energy sector, inventory (of homes) is coming back down from a high standard. . . .

Using the basic principles of supply and demand, we're moving towards a balanced marketplace . . . 2008 is going to be a great year of opportunity for both sellers and buyers.

Q: What is the biggest challenge for the industry?

A: Educating the sellers that they're in a different marketplace. That's our issue right now and certainly I think we'll continue with that.

Q: What do you see as your role as president of the organization?

A: I see the president's role as leading a team of very experienced real estate practitioners in policy-making, governance, strategic thinking for our industry.

Where are we going with the business? . . . Figure out what type of services we can offer our members so they can offer better services to the public in facilitating what they want and that's to buy and sell houses.

Q: Will 2008 be a buyer's or seller's market?

A: It's going to be a great market for sellers and buyers. In my opinion, a balanced market is a good market for both the sellers and the buyers

When we have a seller's market, they're happy, but the buyers are not happy because prices are going crazy. That's not good for the economy. That's not good for anybody in general because those sellers become buyers.

The buyers aren't happy because they can't find the product. It's not an issue of price. It's an issue of product.

Q: What is your advice to buyers in this market?

A: Buy as soon as possible. Buy now.

. . . From the buying perspective, there's no question in my mind that 2008 is going to be an excellent year and I believe that the prices will increase. So buy now while there's selection.

Q: What is your advice to sellers in this market?

A: Sell now. The reason for that is because we've got product.

If you're selling and you're moving for a reason, there's product . . .

It's a good solid economy. We've got good employment. All the economic indicators are good for this time window.

You're selling for a reason and whatever that reason is, then you need to buy. Right now, there's selection, which gives you the opportunity to find the real dream home. What's the next step? That's what everybody wants. So that's why you should sell now. It shouldn't be just on the money side.

There's great values in the home, the economy is good, you're selling now because there's a reason to sell.

Q: Is housing still affordable for Calgarians?

A: I believe it is. We're a city of a million people. Our prices are not going to be indicative of a country town, a village, of 100 homes. And we're a prosperous community which attracts business from all over the world. So prices are relative to that type of city environment.

Q: What has been the biggest change in the real estate industry over the span of your career?

A: We went from blackboards to computers. . . .

Is it better for consumers? Absolutely. Now with the technologies, we can bring more information to our clients to help them make an informed decision and that's our job. Our job is to fill the wish list of our clients in respect to the type of home they want with the amenities they want. The tools allow us to do that.

Where are we going? We're moving down the track toward bigger and better technology. We're on the cusp on going more electronic.

Carolyn here, Rob's Marketing Specialist. I know most of our posts are directly Real Estate Related (and that they should be) but today something more Calgary Related is on my mind: Calgary, and Transportation.

For those of you out there who don't drive, or who choose not to drive, you probably agree that Calgary's transit system isn't too shabby. It gets you from point A to point B in a reasonable amount of time, moreso if you are taking the C-Train downtown to work and back.

Then, there are those of us who walk or bike to work every morning. I have to admit, I'm a fair-weather biker - as soon as the temperature dips below 10 degrees celcius, its time to leave the bike behind and take something with an engine/motor to the office.

I have always admired the Calgarians I see out and about, even when it is -20, they somehow manage to pedal themselves to work. How they do it is beyond me. (If you're asking "Why would ANYONE want to bike in the winter", click here: http://www.icebike.org/whybike.htm)

I guess curiosity has gotten the better of me - and I plan on trying out the whole winter biking in Calgary thing. I'll let you all know how it goes!

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• 1,180 sq. ft., 2 bath, 2 bdrm apartment - MLS® $439,900 - Top-End Condo

Lower Mount Royal, Calgary  -  Contemporary cool describes this choice upscale condo in the exclusive Greystones. Desirable quiet south-easterly corner location with a dynamic city view. This top end condo offers extensive upgrades and shows as new. Features include burgundy cherry maple cabinetry and solid granite countertops throughout. Full 9 ft ceilings accentuate the open flow of the floor plan. The gourmet kitchen overlooks the greatroom and dining areas and offers upper end appliances (Maytag gas range - Jennaire washer). Illuminating the large island is low voltage pendant lighting and there is generous counter space with loads of cabinets. Tech nook just off the kitchen. The master suite is complimented with a large walkin closet and luxury ensuite with granite, a separate shower, double sinks & oversized soaker tub.

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Desirable Mayland Heights

• 872 sq. ft., 2 bath, 2 bdrm 3-level split - MLS® #C3293542   $299,900 - Great Value

Mayland Heights, Calgary  -  Quaint & cozy, nestled into a quiet upper Mayland crescent. This home has many exciting features, including a vaulted & open entry, front vaulted living room, walk-out basement and city & mountain views! The dining area overlooks the open living room, and the lower level features a very spacious rec room with patio doors. These lead through the walk-out directly to the sunny, west-facing back yard. Study nook and room for 3rd br. Utility area has workbench and an abundance of storage. All this for under 320k in desirable Mayland Heights!

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Good News!

We have taken the news articles that the Calgary Real Estate Board compiled and put them online for your viewing: click here to see them!

Hamptons, Calgary  -  Announcing a price reduction on 262 Hamptons Park NW, a 1,507 sq. ft., 3 bath, 2 bdrm bungalow "Condo". Now MLS® #C3289402   $484,900 - .

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• 829 sq. ft., 1 bath, 2 bdrm 2 story "Condo" - MLS® #C3289355   $257,500

Beddington, Calgary  -  End unit with loads of windows and on an open corner across from a park. Nice fenced yard with no other unit windows looking in. The main level is open and has loads of natural sunlight. The nook overlooks the livingroom that has patio doors for summer BBQs. Upstairs there are two good sized bedrooms and an updated bathroom. There is a full basement as well that is ready for further development if you like. The kitchen is revitalized and has newer appliances, including newer built-in dishwasher. Kitchen and stairway are being freshly painted. This is a perfect location just a couple minute walk to No 3 bus, runs downtown, and with shopping and restaurants close by. So convenient you could sell your car. Possession is flexible.

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Beddington, Calgary  -  Announcing a price reduction on 51-115 Bergen Rd, NW, a 829 sq. ft., 1 bath, 2 bdrm 2 story "Condo". Now MLS® #C3289355   $257,500 - .

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1. What makes you different? Why should I list my home with you?

You want to sell your home as quickly as possible and for a good price. So are hundreds of others in the city and you need to stand out in the pack. You need someone with experience who will take a unique approach to selling your home.

2. What is your company’s track record and reputation in the market place?

As stated above, you want the person who will sell your home for a good price, and fast. That person is going to be someone who sells A LOT of houses.

3. What are your marketing plans for my home?

Not all homes are created equal and as such, they should not all be marketed the same. Ask them about how much they spend on advertising and where they advertise.

4. What has your company sold in my area?

Agents should come prepared with lists of the sales in the area.

5. Does your Broker control your advertising or do you?

If the brokerage controls the advertising you have more competition for advertising space.

6. On average, when your listings sell, how close is the selling price to the asking price?

This information is available from the Real Estate Board. You want to judge the agent against the performance in his field.

7. On average, how long does it take for your listings to sell?

This information is also available from the Real Estate Board. Again, look at the average and how your agent compares.

8. How many Buyers are you currently working with?

Obviously, the more buyers your agent is working with, the better your chances are of selling your home quickly. A bidding war can sometimes happen on a home that is represented by an agent who has many buyers.

9. Do you have a reference list of clients I could contact?

If they provide you with references, check them.

10. What happens if I’m not happy with the job you are doing to get my home sold?

You want to make sure that the contract cancelable in reasonable circumstance. You also do not want to be locked in for a long period of time. These things can indicate who confident the agent is in selling your home.  

*Written by Carolyn, Marketing Specialist to Rob Johnstone*

We have all done it - climbed up a flight of stairs or two, only to be huffing and puffing by the time we reach the top. Coincidentally, over the weekend, a friend mentioned that every year there is a race to the top of the Calgary tower. I figured this was worth sharing, for anyone who wasn't already aware of the event.

 The event is called Climb for Wilderness, or, for the more competitive there is also the Run for Wilderness.

"Climb for Wilderness is Alberta Wilderness Association's annual fund-raising event held at the Calgary Tower. People pay a registration fee and collect sponsorship money which allows them the unique opportunity to climb the 802 stairs inside the Calgary Tower. Climbers can climb once or multiple times during a five-hour period. The money goes towards wilderness protection in Alberta. It is a great opportunity to get some exercise, to learn about environmental work in Alberta, and to have a lot of fun!"

"Run for Wilderness is the race component of the Climb for Wilderness. It involves running a 1 km track around the Calgary Tower block and then racing up the 802 stairs to the top of the Tower. The Run starts at 8:00 am sharp and all runners start at the same time. The Run co-sponsored by the Running Room. Runners times are logged and posted. Runners register and collect pledges as do climbers and they may continue climbing at 9:00am when the Climb starts."

More information on the event can be found here: www.climbforwilderness.ca

The following was sent to me in an email forward, and I thought I would share.
-Carolyn B, Marketing Specialist to Rob Johnstone

A well-known speaker Started off his seminar by holding up a $20.00 bill.

In the room of 200, he asked, "Who would like this $20 bill?"

Hands started going up.

He said, "I am going to give this $20 to one of you, but first, let me do this.

He proceeded to crumple up the $20 dollar bill.

He then asked, "Who still wants it?"

Still the hands were up in the air.

Well, he Replied, "What if I do this?"

And he Dropped it on the ground and started to grind it into the floor with his shoe.

He picked it up, now crumpled and dirty.

"Now, who still wants it?"

Still the hands went into the air.

My friends, we have all learned a very valuable lesson.

No matter what I did to the money, you still wanted it because it did not decrease in value. It was still worth $20.

Many times in our lives, we are dropped, crumpled, and ground into the dirt by the decisions we make, and the circumstances that come our way. we feel as though we are worthless.

But no matter what has happened or what will happen, you will never lose your value.

Dirty or clean, crumpled or finely creased, you are still priceless to those who DO LOVE you.

The worth of our lives comes not in what we do or who we know, But by WHO WE ARE and WHOSE WE ARE.

You are Special - Don't EVER forget it."

You may have heard about the psychology involved in real estate, but what does that mean? Well you should know first that it exists on both the side of the buyer and seller.

The average real estate transaction includes a fair amount of psychology. Both sides -- buyer and seller -- have to feel warm and fuzzy about the offer on the table. Each side has to be convinced that he or she landed a fabulous deal. Everything matters; and yet, buyer and seller are determined to convince each other that nothing matters. "Take it or leave it" is often the underlying message each side is trying to send.

When you're the seller, how can you possibly "stay cool" when it's important to quickly sell your home before that sudden job transfer or to get a child into school at the start of the year? If you're the buyer, same question.

Within the bargaining process, regardless of the pressure involved, there is a need to stay cool because buyers and sellers can smell desperation. If you've got to sell your house in a hurry and a prospective buyer knows it, he or she clearly has the upper hand.

If, on the other hand, you're selling in a tight market, and you've got prospective buyers who are gushing about how perfect your house is, that's going to cost them.

"Sometimes the mere psychology of creating urgency and the element of "perfect timing" may just be enough to bring up multiple offers," says Ron Wynn, a Los Angeles broker. "This is a very tricky market, and sometimes staying a step ahead of the market is the answer."

For sellers, the key is time. If you've got time on your side, you won't feel pressured to grab the bait the first time it floats by. Instead, you can wait until you receive the offer that you and your broker feel is justified.

New York attorney Joshua Stein says that "once the parties are into negotiations, both sides usually want to eliminate uncertainty and to resolve issues quickly. The Negotiator should not let this sense of urgency lead him to concede issues without getting something in exchange." (See The Art of Real Estate Negotiations: Practical Psychology at the Table)

Houseclicks.com, say sellers are driven by individual motivations that ultimately determine the ease with which they negotiate with buyers. "Extremely Motivated" sellers are typically driven by such circumstances as a divorce or death in the family; however, while negotiations tend to be easier with extremely motivated sellers, emotions also may run higher.

At the other extreme are what Houseclicks refers to as "Take a Shot" sellers who have no particular motivation (or timetable) for selling their homes and are merely on the lookout for a high-paying buyer. Take a Shot sellers carry with them a reputation for being difficult negotiators. Regardless of the profile they fit, sellers find it difficult to rid themselves of the "my home is my castle" and "I know exactly what my home is worth" mentalities, both inevitable side effects of the years of memories and memories invested in their homes.

It's human nature, perhaps, that whenever we make purchases -- particularly major ones -- we seek reinforcement from ourselves and others. We like to be given constant confirmation that we've landed a great deal -- that we've purchased wisely and couldn't possibly have done any better.

So, if you're negotiating, be flexible. If you've gotten most of what you want and the other party wants a small concession, it may make sense to give it so that the other party can sense some "victory" in the bargaining process.

"Both parties need to feel they have had a constructive process of give and take, producing a reasonable outcome in which neither is a victim," Stein says. "Any suggestion that the result unreasonably favors one party or the other may lead the 'loser' to think they gave away more than they had to."

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• 950 sq. ft., 2 bath, 3 bdrm 1 1/2 story - MLS® $399,900 - Updated & Squeaky Clean!

Huntington Hills, Calgary  -  UPDATED AND SQUEAKY CLEAN HOME!! THIS THREE BEDROOM FAMILY BUNGALOW BOASTS TONS OF UPGRADES AND A RECENTLY FULLY DEVELOPED LOWER LEVEL. TWO RENOVATED AND METICULOUSLY CLEAN BATHROOMS - ONE UP AND ONE DOWN. THE FLOOR PLAN OFFERS A SPACIOUS LIVINGROOM AND COUNTRY SIZED KITCHEN WITH LOTS OF ROOM FOR A FAMILY AND THERE'S A CORNER PANTRY TOO. THE KITCHEN OVERLOOKS THE WELL LANDSCAPED REAR YARD SO YOU CAN SEE THE KIDS WHEN THEY'RE OUT BACK. OPEN LOWER FLOOR PLAN WITH A POOL TABLE SIZED REC. ROOM AND A DEN THAT ONLY REQUIRES A WINDOW IN ORDER TO BE USED AS A BEDROOM. THE FULL DOUBLE GARAGE IS 22X24 AND IS INSULATED & BOARDED. THE LOT IS EXTRA DEEP & SLIGHTLY PIED WITH 16.6 METERS ACROSS THE BACK. THIS IS A READY TO MOVE INTO HOME!!

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