Calgary Stats and the Edmonton Journal is misleading again

Bob Truman updated Old Criteria stats for Calgary so it's time to look at seasonally adjusted data to guage where we are at.

Listings stayed at the same level both in both raw and seasonally adjusted terms after big jumps in February and March. At this level of listings inventory is still accumulating rapidly, reaching 10,078 in April. This is double the low of 5,018 in December and up from 8,688 this time last year.



Sales decreased slightly while normally we should expect to see a slight increase from March to April. Sales have maintained their position above the dismal pace set during the financial crisis, labeled scorched earth, but still below the bounce we saw in the second half of 2009. From this I expect YOY declines in sales to widen going into the second half of this year.



Seasonally adjusted there was a slight deterioration in the market compared to March, with the sales to new listing ratio dropping to 42%. This is the sixth consecutive month of falling sales/list ratio. A ratio under 50% leads to falling prices.


On another note - Here is an article I missed last week from the Edmonton Journal: Yes, there's a housing bubble in Canada -- but only in three cities

Kevin at the Edmonton Housing Bust Blog does a good job discrediting the article. Read it. The article argues that the relatively slow price appreciation in Alberta last year indicates a healthy market. However, it neglects the rapid price appreciation that occurred during the boom.

In addition to that I noticed that the Edmonton Journal makes a faulty comparison to U.S. bubble cities in terms of affordability.

When U.S. house prices got to their most extreme levels during the U.S. housing bubble, the ratio of average household income levels to average local house prices got to 10 times or more in overheated markets like Los Angeles and Phoenix.

Wrong. While Los Angeles did exceed 10, other ground zero housing bubble cities such as Phoenix were not even close. The 3rd annual Demographia affordability survey shows that in 2006 some of the cities which have seen spectacular collapses had price to income multiples well under 10.

2006
Los Angeles-Orange County 11.4
Las Vegas 6.5
Fort Myers, Florida 5.3 (see video)
Phoenix 5.1

2009
Los Angeles-Orange County 5.7
Phoenix 2.6
Las Vegas 2.4
Fort Myers, Florida 1.9

2009 (Canada)
Vancouver 9.3
Toronto 5.2
Calgary 4.6
Edmonton 4.1

Just because Alberta is below some of it's Canadian counterparts does not mean the market is healthy. The Edmonton Journal states that affordability levels are "reasonable" in Alberta even though the demographia survey labels the market as "seriously unaffordable" using the price to income measure.