The following explanation of what is actually taking place in the Calgary market was penned by Ross Kay, founder and chief strategist of Ross Kay Realty Consultants and the creator of The Wealthy Homeowner™. It has become increasingly apparent that an independent and unbiased interpretation of Canada's housing markets is needed. This release is Ross' attempt to clear the air and present a fair synopsis of where the housing market is at today.
To Calgary Homeowners:
Calgary, July 3, 2016 – The value of Calgary homes continued to slide across the market, exactly on pace with the fundamentals of a changing market. Builders, who are a key factor in real estate agent's earning commissions in Alberta continue to attract home buyers through incentives offered in the detached and semi-detached sectors of the market, where the failure rate of existing home owners looking to sell has only further increased. "Home buyers continue to gain more and more home for their house buying dollar in Calgary and across Alberta forcing sellers to drop their expectations on the real value of their home in today's market," said RKRC founder Ross Kay. "Everyone needs to step back and accept all housing markets ebb and flow on real values over time and right now the pendulum has fully swung towards benefiting home buyers. The benefit of these swings is that since most Calgary homeowners will seek to move to a better quality or larger home over time, so the loss in their own home's value will be more than offset by the smaller mortgage they now need this year to obtain that same larger home than they would have last year."
Home values in Calgary have declined between 12 and 17% off their peak prices recorded more than a year ago. Sellers have adjusted quite rapidly to the changing market as over 1/3 of active sellers at the end of the month had reduced their asking price since it was first offered. These asking price reductions continue to skew Sales to Listing Price ratios making any historical comparison no longer possible. Owners of apartments and condos seeing the great opportunity to move have offered their own homes at a greater rate than before which in turn gives first time buyers more options and better pricing alternatives which is the same benefit those listing and hoping to sell expect to gain.
Contrary to what you have read, overall sales have continued to strengthen in Calgary as the pace of sales in June was only off less than 1% of what it was in May but remains 61% of what it was at the market's peak back in 2006. Accounting for growth within the city of Calgary and the fact FSBOs are now included in sales counted Calgarians are now trading homes at 50% the rate they were a decade ago.
"Unfortunately falling house values continue to be misrepresented as a bad thing by real estate stakeholders who rely upon higher and higher selling prices to raise their own businesses revenues. The truth is unless you are over 65 falling prices in Calgary are setting up most current home owners and first time buyers for added gains to be found once prices return to their real value and then once again begin their rise." Ross continued. " All housing markets correct sooner or later but the prudent home owner takes advantage of these swings in the market to set themselves up in a better position going forward."
As Calgary moves forward throughout the rest of the year and hopefully more first time buyers find a great opportunity in enter the market, home prices will be reported as falling further. As long as home owners realize sales data released by real estate stakeholders does not ever explain what is actually taking place in the market, they will be able to weather this part of the market and not participate in the common downward spiral "fear of falling house prices" naturally creates.
"Calgary step back and take a breather." suggested Ross Kay, " Your last decade of house price increase was supported by sound fundamentals meaning the amount of correction needed to revive your market is far less than what is going to be needed to be recorded in BC and ON today. Get your finances in order and prepare yourself for your next 25 years of prudent and responsible home ownership."
Ross
Home values in Calgary have declined between 12 and 17% off their peak prices recorded more than a year ago. Sellers have adjusted quite rapidly to the changing market as over 1/3 of active sellers at the end of the month had reduced their asking price since it was first offered. These asking price reductions continue to skew Sales to Listing Price ratios making any historical comparison no longer possible. Owners of apartments and condos seeing the great opportunity to move have offered their own homes at a greater rate than before which in turn gives first time buyers more options and better pricing alternatives which is the same benefit those listing and hoping to sell expect to gain.
Contrary to what you have read, overall sales have continued to strengthen in Calgary as the pace of sales in June was only off less than 1% of what it was in May but remains 61% of what it was at the market's peak back in 2006. Accounting for growth within the city of Calgary and the fact FSBOs are now included in sales counted Calgarians are now trading homes at 50% the rate they were a decade ago.
"Unfortunately falling house values continue to be misrepresented as a bad thing by real estate stakeholders who rely upon higher and higher selling prices to raise their own businesses revenues. The truth is unless you are over 65 falling prices in Calgary are setting up most current home owners and first time buyers for added gains to be found once prices return to their real value and then once again begin their rise." Ross continued. " All housing markets correct sooner or later but the prudent home owner takes advantage of these swings in the market to set themselves up in a better position going forward."
As Calgary moves forward throughout the rest of the year and hopefully more first time buyers find a great opportunity in enter the market, home prices will be reported as falling further. As long as home owners realize sales data released by real estate stakeholders does not ever explain what is actually taking place in the market, they will be able to weather this part of the market and not participate in the common downward spiral "fear of falling house prices" naturally creates.
"Calgary step back and take a breather." suggested Ross Kay, " Your last decade of house price increase was supported by sound fundamentals meaning the amount of correction needed to revive your market is far less than what is going to be needed to be recorded in BC and ON today. Get your finances in order and prepare yourself for your next 25 years of prudent and responsible home ownership."
Ross
