Monday, December 31, 2007

2007 review

The MLS Rent vs. Buy calculator which had always advised to buy has been removed. See original post.

Edmonton Real Estate Board removes false information from their June 2007 press release without correction.

Confusing Comfree sales statistics sold to listings change to sales success and removed afterwards.

Calgary Real Estate Board spinning seasonality and changing graphs but nothing too overt.

Edmonton Journal uses quote from 2005 'Bubble Watch' study in 2007 article. The 2005 study referred to Edmonton not being a bubble before prices doubled. Small two line correction put into print afterwards but not online. See article and the study from 2 years earlier.

Alberta mortgage brokers encourage not reporting income as described by revenue Canada and setting up illegal basement suites to GIT-R-DONE.

CMHC encourages gambling.

Cheers! Have a safe and happy New Year!

Thursday, December 27, 2007

NEWSFLASH: It's not 1992

There is an article in the Edmonton Journal titled Buy sooner rather than later. The writer was bold enough to buy a townhouse in Edmonton for $55,000 in 1992 and uses this example to make the case for first time buyers to get on the property ladder.
Regardless of the boom and the city you live in, buying your first home is always tough.
However, In the 1990s buying a home in Edmonton was easier. And if you waited a year or so it was no big deal. Below is a chart of % after tax household income dedicated to mortgage payment from RBC Housing Affordability study. Note how all property types are currently less affordable now than at any other time in the chart range.

This number takes into account wages and interest rates so it is a good picture of relative difficulty of getting into the market. It assumes a 25% down payment which is much more difficult to get now because of the appreciation of the last few years. The author of the article was prudent enough to save $10,000 or 18% down payment in 1992 and gives the following advice:

Buy what you can afford: I know you might think it's tough in this market but don't push yourself to the limit.

Too many people are stretching amortization periods and putting down very small down payments.

The cheapest 2 bdrm townhouse in west Edmonton is currently about $200,000. An equivalent 18% down payment today is $36,000. How is it possible to buy sooner rather than later and save up that kind of money? To illustrate see the following average price chart for Edmonton showing both nominal and inflation adjusted prices. A certain percentage down payment will be proportional to the nominal amount and its relative size in terms of buying power would be proportional to the inflation adjust series.

Bottom line is the article is simply not applicable in 2007 Edmonton.

Wednesday, December 19, 2007

keep scrolling, you'll find them

Below is a table of median single family homes across the U.S. with some Albertan locations thrown in. No adjustment was required in currency. Alberta info from November MLS reports. US data from CNN.

Also interesting is Canadian interactive pricing map (These stats are averages and include condos).

City State Median
Youngstown-Warren-Boardman OH - PA $81,600
Saginaw-Saginaw Township North MI $84,900
Decatur IL $85,900
Elmira NY $93,300
South Bend-Mishawaka IN $95,200
Ft. Wayne IN $101,300
Erie PA $103,800
Toledo OH $107,100
Cumberland WV $107,700
Buffalo-Niagara Falls NY $110,900
Springfield IL $111,200
Davenport-Moline-Rock Island IA - IL $114,600
Canton-Massillon OH $115,700
Waterloo/Cedar Falls IA $115,800
Topeka KS $117,100
Wichita KS $118,800
Binghamton NY $119,600
Dayton OH $121,400
Rochester NY $123,000
Amarillo TX $123,100
Charleston WV $123,400
Indianapolis IN $123,500
Akron OH $124,700
Syracuse NY $124,900
Rockford IL $125,100
Peoria IL $125,200
Springfield MO $127,000
Pittsburgh PA $127,700
Appleton WI $128,500
Grand Rapids MI $128,600
Beaumont-Port Arthur TX $129,100
Oklahoma City OK $130,000
Little Rock-N. Little Rock AR $131,600
Cleveland-Elyria-Mentor OH $132,700
Chattanooga TN - GA $133,200
Lansing-E.Lansing MI $133,700
Spartanburg SC $134,400
El Paso TX $135,800
Mobile AL $136,300
Lincoln NE $138,800
Shreveport-Bossier City LA $140,200
Corpus Christi TX $140,500
Memphis TN - MS - AR $141,300
Louisville KY - IN $141,900
Kankakee-Bradley IL $142,100
Champaign-Urbana IL $142,600
Omaha NE - IA $142,800
Detroit-Warren-Livonia MI $142,900
Gary-Hammond IN $144,300
Cincinnati-Middletown OH - KY - IN $145,300
Jackson MS $145,400
Fargo ND - MN $145,700
Dallas-Fort Worth-Arlington TX $146,800
Sioux Falls SD $147,100
Montgomery AL $148,400
Columbia SC $149,500
Lexington-Fayette KY $150,100
Saint Louis MO - IL $150,500
Columbus OH $151,600
Des Moines IA $153,900
San Antonio TX $154,700
Greensboro-High Point NC $155,500
Bloomington-Normal IL $155,800
Houston-Baytown-Sugar Land TX $155,800
Kansas City MO - KS $157,000
Knoxville TN $158,400
Gulfport-Biloxi MS $159,200
Greenville SC $159,600
New Orleans-Metairie-Kenner LA $160,200
Ocala FL $160,800
Bismarck ND $161,600
Green Bay WI $162,900
Reading PA $162,900
Yakima WA $163,200
Birmingham-Hoover AL $165,900
Pensacola-Ferry Pass-Brent FL $170,000
Glens Falls NY $170,700
Kennewick-Richland-Pasco WA $172,300
Tallahassee FL $174,300
Atlanta-Sandy Springs-Marietta GA $175,300
Baton Rouge LA $176,700
Palm Bay-Melbourne-Titusville FL $182,400
Durham NC $186,900
Austin-Round Rock TX $188,200
Jacksonville FL $189,200
Farmington NM $190,400
Deltona-Daytona Beach-Ormond Beach FL $195,000
Albany-Schenectady-Troy NY $204,500
Albuquerque NM $204,800
Gainesville FL $206,600
Spokane WA $206,800
Hagerstown-Martinsburg MD - WV $208,400
Boise City-Nampa ID $209,000
Charleston-North Charleston SC $212,300
Springfield MA $214,900
Pittsfield MA $215,300
Tampa-St.Petersburg-Clearwater FL $218,300
Dover DE $219,800
Charlotte-Gastonia-Concord NC - SC $220,100
Colordo Springs CO $222,400
Raleigh-Cary NC $229,500
Minneapolis-St. Paul-Bloomington MN - WI $229,600
Milwaukee-Waukesha-West Allis WI $231,100
Madison WI $234,500
Salem OR $235,400
Cape Coral-Fort Myers FL $236,700
Richmond VA $238,800
Eugene-Springfield OR $241,900
Philadelphia-Camden-Wilmington PA - NJ - DE $243,000
Tucson AZ $244,800
Portland-South Portland-Biddeford ME $245,900
Salt Lake City UT $246,700
Denver-Aurora CO $254,100
Virginia Beach-Norfolk-Newport News VA - NC $255,000
Phoenix-Mesa-Scottsdale AZ $255,500
Norwich-New London CT $266,000
Orlando FL $266,800
Kingston NY $269,500
Hartford-West Hartford-East Hartford CT $270,100
Allentown-Bethlehem-Easton PA - NJ $272,900
Atlantic City NJ $273,100
Worcester MA $282,800
Chicago-Naperville-Joliet IL $286,400
Sarasota-Bradenton-Venice FL $287,400
Providence-New Bedford-Fall River RI - MA $291,000
Baltimore-Towson MD $291,400
New Haven-Milford CT $292,400
Las Vegas-Paradise NV $295,500
Portland-Vancouver-Beaverton OE - WA $299,700
Reno-Sparks NV $317,300
Trenton-Ewing NJ $328,600
Sacramento--Arden-Arcade--Roseville CA $335,700
Miami-Fort Lauderdale-Miami Beach FL $346,800
Edmonton CMA AB $355,000
Boulder CO $367,500
Riverside-San Bernardino-Ontario CA $377,000
NY: Edison NJ $391,800
Seattle-Tacoma-Bellevue WA $394,700
Barnstable Town NA $400,600
Calgary City AB $407,500
Boston-Cambridge-Quincy** MA - NH $414,700
Washington-Arlington-Alexandria DC - VA - MD $438,000
NY: Newark-Union NJ - PA $459,700
NY: Nassau-Suffolk NY $470,000
New York-Northern New Jersey-Long Island NY - NJ - PA $476,100
Bridgeport-Stamford-Norwalk CT $491,100
New York-Wayne-White Plains NY - NJ $550,900
Los Angeles-Long Beach-Santa Ana CA $588,400
San Diego-Carlsbad-San Marcos CA $589,300
Fort McMurray (Average) AB $635,325
Honolulu HI $649,900
Anaheim-Santa Ana CA $700,700
San Francisco-Oakland-Fremont CA $825,400
San Jose-Sunnyvale-Santa Clara CA $852,500

CMHC forecast changes

Here are some forecast changes by CMHC over 2007 in the following reports:

CMHC Housing Market Outlook Spring 2007
CMHC Housing Market Outlook Fall 2007
CMHC Rental Market Report 2007

CMHC has changed their forecast(s) for Edmonton a couple of times this year.

Vacancy and two bedroom rent:

This spring the outlook on vacancy was 0.7% the actual vacancy was 1.5%.

Spring 2007 Housing Outlook
2007(f) 0.7% $970
2008(f) 0.5% $1115

Fall 2007 Housing Outlook
2007(f) 1.0% $950
2008(f) 0.8% $1090

October 2007 survey
2007 1.5% $958

MLS Sales

The forecast for sales in 2007 was cut by almost 3,000 and may be lower after December's count.

Residential Sales

Spring 2007 Housing Outlook
2007(f) 24,000
2008(f) 22,600

Fall 2007 Housing Outlook
2007(f) 21,200
2008(f) 20,000

November EREB YTD sales 19,687, assuming 1000 sales in December:

The forecast change for listings increased from 28,000 to 38,000.

Sunday, December 9, 2007

EREB - Edmonton Average Price and Analysis

Below is a chart which takes a few quotes from the Edmonton Real Estate Board and places them on a Average price chart.

March - “There are lots of stories about the slowdown or reversal of certain American housing markets,” said Pratt. “But all markets are local and Edmonton is unique in that the fundamentals of low interest rates, strong demand, low inventory, steady in-migration and high consumer confidence are still driving our local economy.”

April - “Price increases may moderate slightly as the market returns to pre-boom levels but I do not anticipate that actual prices will decrease.”

May - “With the average price of a single family dwelling rising by over $400 a day, you need the latest market figures that only a REALTOR® can provide.”

June - “The fundamentals of the Edmonton market are still strong and should sustain steadily rising prices for all classes of property,”

August - “REALTORS® are optimistic and see any price dips as temporary and within the normal range for this market.”

November - “As the current listings become sold or are withdrawn the current inventory will drop. As we move into the spring with a more normal inventory, we expect that prices will again begin to rise slowly,"

Update (thanks rj):

Added another chart based on the quote found in the Edmonton Journal April 4, 2007.

In only the first three months of this year, average home prices have climbed 12.4 per cent, so Pratt has abandoned her earlier forecast of a 15 per cent increase for the full year.

"We're predicting that prices will continue to rise until August, at four to five per cent per month, then at two per cent per month," she said today.

This chart compares the prediction made by the EREB after March stats were released to what has actually happened.

Monday, December 3, 2007

Typical Spin

Typical season
slow down comes to the MLS(R) during the month of November 2007, according to figures released by the Calgary Real Estate Board (CREB(R))
Single family Calgary metro sales for November 2007 were 1,103, a decrease of 21 per cent from the 1,397 sales recorded in November 2006...

Sales in November 2007 21% less than November 2006.
Sales in November 2006 11% less than November 2005.
CREB Nov 2006

It's getting cold out there.