Summer Market Update, September 2009

Earlier this year, this blog posted “What needs to happen in the Canmore Real Estate Market” The general gist of the post was that Sellers had to come to terms with the fact that prices have corrected. The market value of properties have adjusted and the list prices on the whole in the market was priced where Buyers were unwilling to pay. We experienced a stand off between Buyers and Sellers in the Bow Valley for several months, but we are happy to report now, that Buyers and Sellers are again on speaking terms.

Prices have indeed corrected, and with Sellers listings now reflecting this, Buyers have eagerly advanced on Canmore and begun buying with a vengeance. Volume for just June, July and August of this year, has surpassed the volume for the entire 6 months previous, and is more than double the sales volume in the same period last year.

This is a relief for Buyers and Sellers alike as a stagnate real estate market did little to help anyone. Home owners still have growing families that require larger homes, or grown children moving out requiring downsizing. People get transferred and have to move in or out of town, and investment property owners require adding to or liquidating their portfolios. All this requires homes to be bought and sold, and therefore the middle ground found between buyers and sellers was a welcome development.

The free market will always work itself out eventually. The free market only works if there is a supply and demand for a product and this market has proven there is a supply of, and demand for, homes in the Canmore market. There are many lessons that can be taken from the past many months of real estate price correction in our area and each person will take something different from it.

The one universal education that we can all take to heart is that nothing lasts forever. Not booming markets, and thankfully, not down markets. Real estate is not a bullet proof investment, however in the long term it has proven to be far more dependable than other investment vehicles and luckily, people still needs homes to live in.

Buyers and Sellers are still careful entering transactions now days, and as we emerge from this time of adjustment, a habit that will serve us to create a stable, long term real estate market.

2nd Quarter 2009 Canmore Real Estate Market Update (Sounds dry, but is really very interesting!)

The Canmore real estate market has been rather fascinating lately. We started feeling the pinch long before the rest of Western Canada, starting late August 2007. Now,  6 months after there has been a balancing of the rest of the Canadian markets, Canmore is still trying to reach that balance.  However, we have finally started to see improvement.

There was precious little decline in sale prices in Canmore  for most of 2008. Though that sounds positive, it unfortunately also created almost a complete stand still in real estate activity. Buyers simply would not accept these prices and therefore did not buy.

2009 has showed a dramatic change in that mentality.  The Sellers that have adjusted their prices to reflect what the buying market is willing to pay, have seen their homes sell. As more Sellers accept the new, correcting market, more Buyers are eager to snap up their own piece of Canmore.  Real estate in Canmore is active once again.

Bruce Flecther, Associate Broker with RE/MAX Alpine Realty has complied some enlightening statistics for us.

The following is a summary of sales for Canmore only, for the 2^nd quarter of 2009;

There have been:

- 23 Single Family Homes sold in 2nd quarter of 2009

-with an average sale price of $691,086.

- January to end of June 2009, 36 Single Family Homes sold

-is exactly equal to the number of house sales for same period in 2008.

-January to end of June 2009, average house sale price  $756,430

-which is $165,940 below the 2008 average.

On the multi-family scene:

- 52 Multi-Family sales in 2^nd quarter of 2009

-with an average sale price of $477,077.

-January to end of June 2009, 76 Multi-Family Homes sold

-down 37 units or 33% compared to same period in 2008.

-January to end of June 2009, average sale price of a Multi-Family unit sale price $506,549

-which is $45,901 below the 2008 average.

Sale data for the first six months of 2009 shows the market is still becoming more affordable.

PERIOD	HOUSES		CONDOS & DUPLEXES
	Average Sale Price	Number of Units Sold	Average Sale Price	Number of Units Sold
Q2 2009 Q1 2009 2008 2007	$691,086 $872,038 $922,379 $915,149	23 13 59 134	$477,077 $546,822 $552,450 $535,848	52 24 173 363

The following were not included;

1. Quarter shares

2. $1 sales

3. Mobile Homes

Bruce Fletcher, PEng

Associate Broker,  RE/MAX Alpine Realty

Spring is the time for many things. Flowers, rain, sunshine and, it seems, real estate reports. Our next two blog posts will focus on 2 insightful reports that have been produced this week.

The 2009 RE/MAX Recreational Property Report and the 2009 Canmore Development Report from CEDA (Canmore Economic and Development Authority)

This post will focus on the RE/MAX Recreational Property Report, that reports these 3 main factors:

• -Gen X is the new strength in recreational markets across Canada, driving the measured recovery in these areas.
• -Prices have softened while inventory remains healthy or high
• -Increasing trend is for Baby Boomers to sell rec property locally and purchase South of the Boarder

 

Gen X driving force in Canadian recreational markets.

Several factors contribute to this new trend. 

• lower prices and low interest rates open doors of opportunity previously not available.
• lower risk factor for this generation to invest in real estate as will be able to hold long term. Boomers do not necessarily have that luxury with retirement looming on the horizon. 
• boomers preparing for retirement by selling local rec properties to purchase in warmer locals. 
• Gen X adding recreation properties to their lifestyle as their young families grow.

Prices softer, inventory available

Now days, purchasers can breath and make well thought out decisions when buying recreational properties. This was a non-existent luxury during the peak of our market.  At this time, with softer prices, and more inventories, buyers are reemerging in a calmer, more cognizant manner that will hopefully lead to a stable, healthy long term recreational market. 

Boomers heading for the Border

• taking advantage of low prices of recreational properties in warmer States in the US
• have plans to ” Snowbird” (part time living in both US and Canada)
• selling their local recreational property to downsize due to empty nest
• selling their local recreational property to purchase retirement recreational home (warmer location)

Have these 3 factors affected  Canmore?

This year we have seen:

• -the majority of recreational property sales in town have  sold in the lower or mid range of the market,  indicative of  GenX driving many of these purchases. 
• -a slight softening of prices and very high inventory
• -Boomers selling to purchase in the US

Canmore seems to be following much of the same pattern of other recreational areas and destinations throughout Canada.  Canada has an abundance of natural space  and the recreational property, condo, cabin or cottage is hard wired into Canadian culture. It is unlikely to lose its appeal anytime soon!

For the full 2009 RE/MAX Recreation Property Report visit www.alpinerealty.ca  To  sell or view Canmore properties, contact us at www.alpinerealty.ca   We are happy to help. 403-678-5890 0r 1-888-678-0236 toll free.

Follow us on Twitter http://twitter.com/remaxcanmore

First Time Home Buyers and the Canmore Real Estate Market

 

 

 

Average Sold Price Per Sq Ft                              Average Days on Market

January 2009      $429    ↓                                                     79    ↑

February 2009    $414     ↓                                                    104   ↑

March 2009         $376    ↓                                                    121   ↑

April 2009            $358    ↓                                                   128   ↑        

April 2009 sales volume was approximately double of the average sales volume over the past 5 months. Though most of Western Canada saw a significant increase in February, it was really the later part of March and all of April that Canmore experienced such a return. Volume is still lower than previous year’s averages; however the upswing in momentum is welcomed by buyers and sellers alike. With many Canmore sellers reluctant to reduce prices significantly, many buyers are exercising patience and waiting until prices are more affordable. However, not all buyers and sellers are willing to wait.

First-time home buyers currently are a driving force in keeping the marketing moving. With interest rates at historical lows, compounded by considerably high inventory, and increased days-on-market for listings, first-time home buyers see an opportunity previously unavailable to them. These groups of buyers are using this opportunity to search for the ideal property at their own speed, research the best terms in financing and negotiate an acceptable purchase price. While first time home buyers are creating a small flurry of activity at the entry level, it is expected that this may result in increased activity in the mid-to-upper end markets, by freeing the up-sizing market.

Some tips for first-time home buyers in today’s market:

1. Visit your mortgage specialist first, before looking at homes. You should know what price range you can afford.

2. Always put a financing condition in your offer! A pre-approval is not the same as an approval.

3. Negotiate for the best financing terms. Though mortgage funds are not as readily available as in previous years, lenders still profit from lending funds to you. They need you as much as you need them.

4. A RE/MAX Alpine Realtor can set you up with your personalized MarketWatch webpage that will populate with properties in your criteria. Keep an eye on the market, so you can make informed decisions about reasonable purchase prices.

5. Negotiate a purchase price that is satisfactory for both parties. Buyers are fortunate as they currently have more negotiating power, but unreasonably low pricing expectations leads to a stalemate for both parties. Successful negotiations do not have winners and losers. If no transaction results due to unreasonable expectation, you have both lost. If you have found a home you desire, demand a good deal, not an impossible one.

6. Always be protected and get expert assistance. Your RE/MAX agent can help you navigate negotiations, contracts, legalities and recommendations to protect you.

For your personalized MarketWatch webpage, visit www.alpinerealty.ca and contact a REALTOR of your choice.

 Follow RE/MAX Alpine Realty on Twitter.

What Needs to Happen in the Canmore Real Estate Market?

In One Paragraph
The Canmore, AB real estate market has 3X the regular inventory. Sellers are less than motivated, as they want their pricing for the sale of their recreation property and have the time to wait for such an offer. However, buyers have no interest in purchasing properties at 2008 or even 2007 prices. They are looking for excellent value or even down right deals. Successful sales are priced at approximately 2006 pricing. Because of the discrepancy between sellers and buyers expectations, sales volume in Canmore is low.

Low sales volume does not help potential sellers or buyers, as neither accomplish their goal of selling or obtaining property in Canmore.

In More Detail
Recreational markets in Western Canada, including Canmore, AB have very different factors effecting activity, than found in markets made up of primary residences. In areas heavy in recreational properties, many 2nd home sellers desire to sell, but do not have the same need to sell. As this is not their full time home, they do not have time constraints to sell within. They do not need to move by a particular date, or coordinate their sale with a subsequent purchase of another home. The desire to sell lacks the very urgency that often compels two parties to stick through tough negotiations and ultimately make a deal.

A market of less than motivated sellers is difficult, but buyers in a recreational market are even less motivated than the sellers! When buying a primary resident, buyers are under the same time constraints as the sellers. They may have to coordinate the purchase with the sale of their current home, or synchronize the move with the start of a new job, or their children’s school year. Recreational buyers have no such requirements and can take all the time they desire to find the ideal recreational home. And that is clearly what buyers are doing!

Buyers have the time to seek out excellent value. Though buyers do not have market or external time pressures, the large majority still would rather not take the time to put forth many different offers on over priced properties. What we are actually seeing are buyers seeking out the best priced properties and those offering the highest value, and pursuing those. If a property is over priced, they tend to disregard it, as it is an indication of a non-motivated seller.

Over priced properties are never a good idea for sellers, however in today’s Canmore market, with 3X the regular inventory, over priced properties tend to be ignored completely. It is important for sellers to acknowledge that if there are NO showings on their property, that the buyers are speaking loud and clear. The buyers market is unwilling to accept the asking price of that home.

So the BIG QUESTION is: What is Current Market Value in Canmore?
With lower than average sales volume, it is somewhat difficult to see what pricing needs to be today to sell. The large majority of sellers still have their home listed at 2008 or 2007 prices, believing this is enough of a discount to garner interest from buyers.
However, currently as a rule of thumb, properties that successfully sell in Canmore, sell at 2006 prices.

What To Do?
This is difficult to accept but simple to do. Sellers, to sell, you must price your home at approximately 2006 prices. Others may tell you you can obtain a higher price, and if this happens it is necessary for you to look at the stats yourselves.
Relevant stats are:
-Average days on market of both sold properties and those still listed for sale.
-Number of price reductions on current and off market listings.
-Sale prices of sold properties, and how that compares to past sale prices of similar properties.
-Sale prices and how that compares to current similar listed properties.

The pattern is clear.
2007 or 2008 pricing= multiple price reductions, longer listing period and low likelihood of sale.

2006 pricing = minimal or no price reductions, faster sales times and successful sales transactions.

Sellers, contact a RE/MAX Alpine agent for this information relevant to your property.
Buyers, contact a RE/MAX Alpine agent to find the motivated sellers and the Canmore real estate deals!

RE/MAX Alpine Realty
403-678-5890
1-888-678-0236 toll free
info@alpinerealty.ca
www.alpinerealty.ca