Let’s Talk Real Estate se-3
May 6, 2016
Lots to discuss here
- Is the Bottom Forming
- Price, Price, Price,
- Previous comments and Impacts of Accepted low offers
- April Stats
Is the Bottom Forming; hard to say; the price of oil seems to be holding above $40 with forecasts of supply/demand balancing in the 3rd quarter. Real estate as previously mentioned is a lagging indicator, meaning we “lag” behind what happens to the O & G by several months to a year. Resent press releases by CREB report the number of sales is down by 10% year to date, and supply is up by almost the same amount for Calgary. Locally in Heritage Pointe, MLS sales for the month of April have come in stronger, recording better activity than any previous April month going back to October 2014. Confusing; no kidding. These results can be explained by pent up demand where we had little to no sales activity for several months, pricing of new builds in competing neighborhoods are higher than expected, and a larger than normal quantity of listings, now standing at 51, stimulates buyer interest. CREB claims buyers are still holding off, trying to time the bottom of the housing market; we know statistically that few are successful and most buyers act more in a “herd mentality” as demonstrated in both Toronto and Vancouver with record buyes into rising markets.
Price Price Price; The public and realtors often compare the current listed price to the sold price to calculate the strength in the market, e.g offers are closing 5% below list or at list or above list as is the case in an overheated market like Vancouver. What seldom is looked at is the original listed price, how many price adjustments to establish the current asking price and even trickier if the original listing expired and a new listing on the same property is written which effectively erases the cumulative days and previous history to this home from the public. The selling price continuously seeks the sweet spot where a home ultimately sells, this is important in a free market pace and establishes value. All realtors work for their clients and take direction from same, the original list price is likely influenced by the seller and his/her perception of worth, the current list price likely is a response to realtor reports of actual market results of similar properties, the closing price is established by the buyer. The health or strength of a market is rated against a narrow differential between original list and closing price.
Comments from residents to previous articles;
- This resident wanted to add further to the listed amenities of Heritage Pointe of two nearby proposed LRT lines; the Seton SE line, I believe the Green line terminating at the SE Hospital and 2nd LRT south of 194 Ave and north of 210 Ave west of MacLeod Trail
- Another resident suggested that the marketing of golf course properties should not be targeted to retirees, the golf course provides one of the best youth golf training programs in Calgary and an additional reason for families to choose our community
- Also a recommendation to convert the un-used baseball diamond at the corner of Dunbow and Pine Creek Road to tennis courts
Impacts of Low sold prices to property values. In response to a direct resident question;
“Good Morning, yes the selling price of #1 Ridge will place downward pressure on the price points of golf course bungalows, how much of a negative impact is hard to say. There are other considerations as well.
Number 1 Ridge Pointe has been on the market since May of 2013, this in itself isolates their price from the rest of the golf course homes and focuses more specifically to this home; 2nd the location of the home was challenged, paralleling the parking lot and third, homes presented for sale in their original state do get penalized more than those that are upgraded. Taking these observations into consideration will offset some of the downward arguments on a price/sq ft basis. Conversely, #10 Heaver Gate in the Ranche listed for $2.2M, received an offer pending conditions. This will mitigate some of the negative price pressure as well.
- All the solds for 2016 occurred this April (excepting one Ravine Villa sold in March).
- Including Artesia, April had the strongest performance going back to 2014
- There is a direct correlation with increased solds to increased inventory levels at Heritage Pointe
- Average sold prices year to date “detached”
Heritage Pointe - $913,125
Auburn Bay - $569,264
Chaparral - $516,304
Legacy - $497,129
Mahogany - $589,264
Walden - $479,053