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Calgary Real Estate Market BlogCalgary Real Estate Market BlogHouse prices have increased dramatically in the past few years. For people looking to buy Calgary real estate in the near future, it is worthwhile to examine whether or not the current valuations are justified.
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Real Estate Economics and Budgeting
2008-08-29 02:59:00 I think having a budget that you are comfortable with is critical to any investment strategy. By laying out the cash flows, and expected asset values you can get a feel for various economic parameters such as: Net present value comparison of various strategies Rate of return Sensitivity to various economic parameters such as interest rates and inflation Affordability ...
The Long View
2008-08-26 05:47:00 The following graph shows the average house prices from 1973 to current. For most of the graphs on this blog it has shown Calgary real estate from an inflation adjusted perspective. If one was to consider inflation however, it can be seen that buying real estate can be helpful as a hedge against inflation. There are ...
A Tale of Two Markets
2008-08-23 13:31:00 A split has occurred in regards to the single family home and multi family home construction environment. The following article address the differences in supply-side characteristics for each market. Calgary single family home market: Correction in starts largely historical, capacity to overbuild looks minimal, last couple data points may point to a bottom approaching as housing construction ...
Ye Olde Real Estate Vintage
2008-08-19 09:20:00 Bob Truman, at First Place Realty, is one of the sole providers of real estate information and statistics in Calgary besides the CREB. I use a lot of Bob’s data in my graphs, so he deserves a big shout-out for making this information available to the public! He recently posted the Truman Index for same sales ...
Greenomics and the Value of Living Close to Work
2008-08-17 12:07:00 I perceive a lot of value in living in downtown Calgary. I love the quick access to Flames games at the Saddledome, downtown nightlife, shopping on 17th Avenue, and jogging along the river pathways. Since recently moving, I have found myself walking to work and my vehicle has sat parked, except for weekend hikes. My commute ...
Things that go BOOM!
2008-08-09 09:45:00 The S&P/TSX Capped Energy Index is formed primarily of companies that have headquarters in Calgary. Since 2001, the index has quadrupled creating wealth on a massive scale. The boom in commodity prices has resulted in energy companies making more money, spending more money and allowing vested shareholders to cash out. Excess liquidity brought about by the ...
Volatility in Housing Markets (Part 2 of 2)
2008-07-28 06:06:00 This is a follow-up to my previous post about volatility in the housing market. For those that are looking to buy or sell a house, you may want to research what the worst and best annual scenario may look like. The results and graph using the same data set as my previous post are below: P90: -5.6% ...
Volatility in Housing Markets (Part 1 of 2)
2008-07-20 17:37:00 In general, housing prices have a low volatility compared to other asset classes. This is due to the underlying fundamental value (rents) being a relatively stable cash flow. This compares against stocks which have larger variance in earnings and therefore larger volatility in price. A lookback at historical real estate volatility can help to give a ...
Click, Whirr - Betting the Shortcut
2008-07-15 10:08:00 The failure in the US housing market was not a black swan as some have described it, but an error in understanding and managing collective risks. Some of the psychological phenomena that may have contributed to the housing boom and bust are explored in a book called “Influence - The Psychology of Persuasion.” Some of these ...
Calgary Real Estate Price Elasticity of Supply
2008-06-17 06:50:00 The supply of residential construction in Calgary has been tightly correlated with house prices over the past 30+ years. High house prices lead to high levels of residential construction as increased margins encourage more market participants. The following graph compares the amount of units under construction to house prices: I believe this graph demonstrates that the Calgary ...
Condo Crazy
2008-06-03 06:33:00 There are massive levels of new construction about to hit the condo market. There are a record 3,000+ condo units for sale in the resale market. This is relatively small in comparison to the whopping 20,000+ multi-family residential units that are in construction, approved or proposed for Calgary. The following mosaic and slideshow was compiled based ... More About: Crazy , Condo
Calgary Housing Market Looking Gluttonous - Fight That Flab!
2008-05-31 10:48:00 A comparison of units under construction in Calgary against population growth can help identify if there is too much residential real estate being developed. The following graph yields some interesting conclusions: Residential units under construction in Calgary is at unprecedented levels, easily surpassing the residential construction rate during the early 1980’s boom. There are record ... More About: Market , Fight , Housing
Credit Junky Nightmare - Credit Cycles Effect on Housing Market (Part 3 of
2008-05-16 07:19:00 The cyclical average for mortgage arrears in Alberta has been about 0.4%. As affordability in Alberta is the poorest since the previous real estate peak in 1990, one would expect mortgage arrears to increase to closer to the cyclical average (or more). The current low rate of mortgage arrears is reflective of the fact that ... More About: Credit , Market , Nightmare , Housing , Effect
Credit Junky Nightmare - Credit Cycles Effect on Housing Market (Part 2 of
2008-05-15 06:02:00 Changing credit conditions impacts the demand for real estate. If credit lending practices are loosened, it allows new participants to purchase real estate. The increased demand for real estate creates upward price pressure until the demand can be satiated. Likewise, if credit lending practices are tightened, less participants can purchase real estate which reduces demand for real estate. So ... More About: Credit , Market , Nightmare , Housing , Effect
Credit Junky Nightmare - Credit Cycles Effect on Housing Market (Part 1 of
2008-03-26 06:55:00 When house prices are increasing, if a homeowner’s mortgage is delinquent they have the option to sell and preserve their credit rating. However, in a falling real estate market, the homeowner will often end up foreclosing due to lack of an option. Therefore credit risk typically only appears when house prices are falling. Credit has become easier in ... More About: Market , Nightmare , Housing , Effect
Game Over for First Time Home Buyer?
2008-03-19 07:28:00 Single family home sales have dropped off dramatically in Calgary year over year. Therefore, it’s difficult to determine if averages and medians are representative of the direction of the market or reflective of changes in composition of the sales mix. The following graph illustrates the year over year change in sales volume by price range: It illustrates that: For the first ... More About: Time , Home , Buyer , Game , First Time
ArriVa - No One Home?
2008-03-13 06:40:00 ArriVa is one of the most recent condo’s that have finished construction in downtown Calgary. Construction has finished a couple of months ago and there are currently 22 units in the building that have been listed by speculators for a total of $15 million as shown by the picture below. A review of other condo’s in the downtown Calgary ... More About: Home
Calgary?s Official Bird the Tower Crane Returns - Highly Cyclical Migration
2008-03-11 06:34:00 The amount of commercial real estate being developed in Calgary has not been witnessed since the 70’s and early 80’s. There are currently several mega-projects being built including the Bow (236.0 m), Eighth Avenue Place I (213.2 m), Centennial Place I (176.0 m), Jamieson Place (170.0 m), and Centennial Place II (110.0 m). These commercial ... More About: Bird , Tower , Official
A Comparison of Calgary House Prices to the US Real Estate Market
2008-02-28 06:40:00 A couple of conclusions can be reached by examining Calgary real estate prices to the US real estate market: The Calgary real estate boom occurred 1 to 2 years after the US boom Calgary house prices have increased by more than most American cities The precipitous drop in Calgary real estate in late 2007 is comparable to some of the most ... More About: House , House Prices , Estate , Real Estate , Real Estate Market
Long Term Relationship Between Calgary House Prices and Alberta Economic Ac
2008-02-25 04:17:00 The price of houses is linked to the economic well-being of the region. Recently, the Alberta economy has been extremely strong and Calgary house prices have increased tremendously. But the question remains, did house prices increase rationally in comparison to economic growth? A comparison of house prices and GDP per capita show that they roughly track ... More About: House , House Prices , Relationship
Financial Calculators For Making Real Estate Investment Decisions
2008-02-14 07:28:00 I have found the following two calculators useful for making decisions regarding whether or not it is a good time to buy or sell real estate. Some good test examples are: What is a fair market value for a house given its rent and an investment horizon of 10 years? e.g. No difference in wealth between ... More About: Estate , Real Estate , Real Estate Investment , Investment , Financial
Risk Spreads - A Red Light on the Real Estate Market
2008-02-08 07:50:00 Typically, when looking for a good investment opportunity, one expects a higher return than a safe investment like a bond. A mortgage product has risk and therefore should have a higher return than a bond. By an analysis of the spread above the safe investment vehichle one can determine periods of heightened risk in the credit ... More About: Estate , Real Estate , Real Estate Market , Market , Spreads
Reading Tea Leaves - Predicting Canadian Recessions Using Financial Variabl
2008-02-06 06:39:00 One of the tools that the Bank of Canada uses for forecasting probability of recessions is the spread between Government of Canada 10 year bond yields and 90 day commercial paper. This is a leading indicator of slower economic growth. The benefit of using a tool like this, is that if recessions can be successfully ... More About: Reading , Financial , Canadian , Leaves
Calgary Real Estate Supply & Demand January 2008
2008-02-03 02:56:00 A review of supply and demand is important in understanding the direction of house prices. The following graph shows the recent trends of inventory and year over year sales. In summary: Current inventory is more than double January 2007 Sales are down more than 30% year over year Please feel free to post your own interpretation. ... More About: Estate , Real Estate , Calgary , Real
Canadian REIT Firesale - No Decoupling From US Real Estate
2008-01-30 07:27:00 Both Canadian and American real estate investment trust indices have performed extremely poorly over the past three quarters. Canadian real estate investment trusts are down roughly 25% from peaks in early 2007. This is very similar to the performance of US real estate investment trusts. If investors expected Canadian real estate to outperform American real ... More About: Estate , Real Estate , Real , REIT
Carrying Costs for Calgary Houses - Highest Since the 1980?s
2008-01-27 21:26:00 One macroeconomic factor affecting real estate is interest rates. As interest rates go down, house prices should go up and vice versa. Here is a summary of conclusions that I have made regarding the graph below: Historical annual carrying costs above ~$17,500 in 2007 dollars appear to be unsustainable Recessions often follow peaks in the housing cycle (as ... More About: Houses , Calgary , Costs , Carrying
Calgary Bull or Bear Real Estate Market?
2008-01-22 17:35:00 For those looking to buy or sell in the near term it is worthwhile to understand the current trend so that some forecasting or predictions can be made about the real estate market. This is a complementary post to my Long Term Trends in Calgary Real Estate . The primary factor affecting the near term trends is the supply & demand balance. The ... More About: Real Estate , Real Estate Market , Market
First Encounter with a Calgary Mortgage Broker
2008-01-20 18:47:00 Buying a house is the biggest purchase that most people make in a life, and how you choose to finance it is a part of how you meet your personal and financial goals in life. So, this weekend, I gave a local mortgage broker a call here in Calgary . I wanted to know what index variable ... More About: Mortgage , Broker , Encounter , Mort
Rich Dad? Poor Dad? A New Territory for Calgary House Price to Household In
2008-01-20 00:31:00 I was interested in how Calgary house prices historically compared against household income. The two papers I am aware of that have been written in relation to the subject are: RBC’s “Housing Affordability” concluded that “Affordability levels in Calgary are now comparable to levels reached in the late 1980’s at the peak of the housing market ... More About: House , Rich , Household , Price
Terrain of Calgary Real Estate Valuation - Price To Rent Ratios
More articles from this author:2008-01-17 06:03:00 In the previous post, I discussed how Calgary rental yields are less than many safe investments like bonds. I was interested in how the price to rent ratio compared in a historical perspective and what were the valuations like compared to previous real estate cycles. A price to rent ratio is similar to the price to earnings concept which ... More About: Estate , Real Estate , Price , Real 1, 2 |
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