CREB says city real estate market settling into 'the new normal' - Calgary Sun - Canada News Media
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CREB says city real estate market settling into 'the new normal' – Calgary Sun

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Calgary housing prices are expected to stabilize in 2020 as the city’s real estate market settles into what is likely a “new normal,” the Calgary Real Estate Board said Tuesday.

Calgary housing prices are expected to stabilize in 2020 as the city’s real estate market settles into what is likely a “new normal,” the Calgary Real Estate Board said Tuesday.

Six years after the oil price crash, Calgary’s real estate market is slowly moving toward more balanced conditions, CREB chief economist Ann-Marie Lurie said at the organization’s annual forecast event. However, detached home prices remain nearly eight per cent lower than 2014 highs, and the days of buying a house and selling it for a tidy profit five years later aren’t coming back anytime soon.

“It’s not going to be like what we had prior to 2014,” Lurie told reporters. “We’re moving into slower, more normal conditions. When you compare it to other markets across the country, we’re looking a lot more like them.”

According to CREB, overall sales activity in 2020 is expected to improve by two per cent over 2019. That, combined with easing inventories, should help slow the pace of decline in the average benchmark price for a home to just 0.5 per cent in 2020 (versus the larger-than-expected 3.3 per cent decline in the benchmark price that occurred in 2019).

Driving the stabilization is the improvement at the lower end of the Calgary real estate market, Lurie said. In 2019, sales growth in the under-$500,000 market grew by seven per cent, while resale sales for the over-$500,000 segment declined by nine per cent. The most affordable areas of the city — such as the northeast, southeast and far north — saw the least amount of price decline in 2019 while the more expensive areas, particularly the city centre, saw the steepest drops in price.

While improving conditions in the lower end of a market can eventually spill into the upper end of the market, this is not expected over the next year, Lurie said. Part of the problem is that while the city’s unemployment rate has improved from 2016, it is still high (6.9 per cent in November) compared to historic norms. The employment situation isn’t expected to improve significantly in 2020, and most of the gains that have been made so far have been in education and health care, not in the higher paid scientific and technical occupations.


In 2019, home sales in the under-$500,000 range remained strong, despite overall weakness in the market.

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“We don’t have the same type of job growth in those higher-paid sort of salaries that we’ve seen historically, so, for that reason alone, it will take a lot longer to see those improvements filter through the higher end of the market,” Lurie said.

Lurie said there are risks that could threaten CREB’s 2020 forecast. If recent job losses in the Calgary market continue into 2020, it will affect consumer confidence and housing market activity.

In addition, if new-home construction projects exceed anticipated demand growth, this will slow the downward adjustment in overall housing supply and affect price stabilization. According to the Canada Mortgage and Housing Corp., there were 3,101 housing starts in Alberta in December 2019 — a 117 per cent increase from December 2018.

Still, CREB CEO Alan Tennant said evidence of market stabilization is a reason for optimism, and added he believes “the new normal” is nothing to be afraid of.

“Normal may not be sexy and fun, but there’s still a lot of business to be done there,” Tennant said. “That’s the start of maybe the dominoes starting to fall in the right direction.”

astephenson@postmedia.com

Twitter: @AmandaMsteph

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Island real estate market has been booming – Manitoulin Expositor

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Lots of buyers has made big dent in ‘for sale’ inventory

MANITOULIN – Manitoulin Island’s housing market has seen a record number of property sales in the past year, indicative of the number of people who wish to purchase a home, cottage or land on the Island that have brought the number of available listings down to levels not seen in living memory.

“I think I can safely say this is probably the first time we’ve ever broken 300 property sales in a year,” said Gore Bay’s Hugh McLaughlin, broker of record at McLaughlin Manitoulin Inc. Real Estate Brokerage.

Mr. McLaughlin began his real estate career in 1974 and said he has never seen the listings supply run as dry as it is now. He referenced a Multiple Listing Service (MLS) figure that 317 properties sold on Manitoulin in 2019. That number was 258 in 2018 and the 2017 sales totalled 273.

This newspaper has reflected the changing Island real estate market. The regular advertisements in the rear pages of this newspaper have shrunk considerably in recent editions, most visibly on the Bousquet advertisement on the outside rear cover. Last week marked the first time in nearly 20 years that the Bousquet advertisement only took up half of the back page. 

Chris Bousquet, broker of record at Little Current-based J. James Bousquet Realty Inc., said the number of listed properties peaked in July 2015 at 517.

“This summer, we were still over 300 (available listings) and demand for the last few years has been quite strong,” said Mr. Bousquet. 

January and February tend to be the months with the smallest number of active listings on Manitoulin Island. During the lowest month in 2015, which came in January with 351 listings, there were still more properties on offer than the peak month in 2019 (June, with just 326 listings).

Data for December 2019 shows 184 Island listings at that time—the only month that has dipped into the 100s since January 2015.

Rolston Real Estate Ltd. broker of record Steve Rolston said this reflects the cyclical nature of real estate on Manitoulin Island. 

“These sorts of things take place every 10 to 15 years on Manitoulin, roughly speaking. We’re just going through another one of those cycles. Unfortunately, it’s tough on our clientele when we get into a market like this—either a strong buyer’s or seller’s market—because it can raise anxieties a bit,” said Mr. Rolston.

While the current market conditions may be anxiety-inducing for some, others find the present prospects positively promising.

“It’s the best market I’ve ever seen,” said Jordan Stephens of the Jordan Stephens Real Estate Team, a Royal LePage-affiliated brokerage.

He said homes are spending far fewer days on the market than ever before. Properties that would normally be tougher to sell, such as high-end waterfront homes, are now getting multiple offers and bidding wars.

“I’ve been working with one buyer for a year and a half now trying to find a suitable house in the $300,000 to $400,000 price range, and it’s almost impossible,” he said.

Mr. Stephens said the massive growth in the Toronto housing market has had trickle-up effects to the North and Manitoulin Island in particular. He said many of the people looking North are retirees. 

Manitoulin’s appeal is aided by roadway improvements that make the journey from Toronto much easier than years past.

According to Mr. Rolston, however, Toronto has never been as connected to the Manitoulin market as are southwestern and central Ontario. He said Manitoulin’s popularity has been growing due to other cottage country areas.

“Some people in the Muskokas are saying it’s too busy there now, and we’re seeing some owners bail out for quieter, more peaceful locations like Manitoulin,” said Mr. Rolston.

He added that housing tends to follow a few years behind the global economy and the Canadian Mortgage and Housing Corporation predicts a continued upward pricing trend in the next year or two.

When comparing figures from 2015 to 2019, the changes are remarkable.

Manitoulin properties sold in 2015 totaled 192, a number that soared to 317 in 2019—a 65 percent increase. 

Monthly active listings on Manitoulin, on an annual average, dropped from 441.8 in 2015 to 271.1 in 2019, or a 39 percent decrease.

The price of homes, however, shows a different perspective that reflects the laws of supply and demand. Selling prices in 2015 averaged $138,004, which rose to $187,416 in 2019. That’s an increase of 36 percent.

For perspective, a property worth $200,000 in 2015, if it were to follow the average increase in price, would have been worth $272,000 just five years later.

Even more of a change was within that five-year period, between 2018 and 2019, when home prices raised by 26 percent year-over-year.

Both Mr. Bousquet and Mr. McLaughlin agreed with Mr. Rolston that Manitoulin real estate tends to operate cyclically, with the pattern based on 10-to-15-year cycles.

“In the early ‘70s there was a push in prices. Fifteen years later in 1989 there was another push in prices, especially waterfront. Those tripled that summer,” said Mr. McLaughlin.

He said the last big push was from 2004 to 2006, and he has been calling for another rise in 2020-2021.

“Maybe this (listings) shortage is just the quiet before the storm. As realtors, we hope so,” said Mr. McLaughlin.

Mr. Bousquet said high demand and lower amounts of available properties are visible across Canada due to a lack of new housing inventory. Manitoulin, however, is unique in the many recreational and waterfront properties that have been driving demand.

“Lots of people are getting out of the cities and the stressful life, and are looking at more affordable areas where they can change their lifestyles a bit. The cottage and waterfront properties here are very affordable compared to down south,” said Mr. Bousquet.

The tight market makes things challenging for the 25 active real estate agents working on Manitoulin Island. Mr. McLaughlin said the market conditions tend to be the same in all communities from Gore Bay to South Baymouth. Western Manitoulin has always been—and continues to be—a different (and much slower) market altogether from the portion in Gore Bay and to the east.

Mr. Rolston said he had faith that his team would pull through the challenging market conditions.

“I’ve got a great crew here. I’m telling our salespeople to keep concentrating on getting what listings we can,” he said. 

By all indications, property owners on Manitoulin who may be looking to move elsewhere are in the most advantaged position in the present market. 

“If anybody is thinking about selling their place, now is the time. It’s a strong seller’s market,” said Mr. Stephens.

Although the current real estate market may seem overwhelming in some ways, Mr. Rolston said turning to professional realtors will make the process much easier to handle.

“If I can recommend anything, it’s to find a good salesperson, stick with them and hopefully things will work out without too much stress,” he said.

Mr. Bousquet added that Island-based realtors who live, work and play on Manitoulin and understand the lifestyle will be best prepared to handle the changing market.

As for the current listings lagging behind the strong demand, some choose to view it as an endorsement of all that Manitoulin has to offer.

“We live in the greatest place in the entire world; honestly, it’s surprising we haven’t seen this sooner,” said Mr. Rolston.

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Reports: Flooding risks could devalue Florida real estate – 570 News

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MIAMI — Flooding due to climate change-related sea level rising, the erosion of natural barriers and long-periods of rain pose substantial economic risks to Florida, particularly to the value of South Florida real estate, according to two new reports released last week.

For years, Florida lawmakers mostly ignored climate change under then-Gov. Rick Scott, who is now a U.S. Senator. But GOP Gov. Ron DeSantis has taken a more aggressive stance at tackling the issue, although environmentalists want him to do more.

Based on past trends, losses from flooding in Florida could devalue vulnerable homes by $30 billion to $80 billion, or about 15% to 35%, by 2050, according to a report from McKinsey Global Institute.

Average annual losses for residential real estate due to storm surge from hurricanes amount to $2 billion today, but that projection could increase to about $3 billion to $4.5 billion by 2050, the McKinsey report said.

“Flooding in Florida could not only damage housing but also raise insurance costs, affect property values of exposed homes, and in turn reduce property tax revenues for communities,” the McKinsey report said.

Furthermore, the impact of a 100-year-storm event could be even more devastating over time, going from $35 billion today to between $50 billion and $75 billion by 2050, the McKinsey report said.

A separate report from the climate-risk analytics firm Jupiter Intelligence said the percentage of vulnerable oceanfront properties affected by extreme flooding will rise in Miami-Dade County from 5% in 2019 to 98% by 2050.

By 2050, annual flooding damage county-wide in Miami-Dade County is expected to roughly double, leading to shortages in affordable insurance coverage and real estate market instability, according to the Jupiter Intelligence report.

“Ignoring, or underestimating, the actual economic risk posed by moderate flooding is common to other geographies in the U.S. and around the world,” said Rich Sorkin, CEO of Jupiter in a statement. “Almost none of this risk is reflected in prices. Most of this dynamic is not yet understood, nor is it implemented into the decision-making of financial institutions.”

The short-term impacts of flooding will be felt within the next decade, according to the Jupiter report.

The impact from moderate flooding of up to one foot in an oceanfront city in Miami-Dade County will increase from 13% of total properties to 48% of total properties. Properties at risk from extreme flooding will jump from 5% to 86% of the total, according to the Jupiter report.

The increased risks of flooding could leave lenders exposed to greater losses and insurers in need of adjusting their pricing to include the greater risks, the Jupiter report said.

“Homes, livelihoods, and the viability of financial institutions and the economy as a whole may find themselves under a Sword of Damocles, unaware of the extent of risk they bear, and without time to prepare,” said Sorkin, referencing the ancient parable about living under imminent peril.

Associated Press, The Associated Press

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Reports: Flooding risks could devalue Florida real estate – Toronto Star

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MIAMI – Flooding due to climate change-related sea level rising, the erosion of natural barriers and long-periods of rain pose substantial economic risks to Florida, particularly to the value of South Florida real estate, according to two new reports released last week.

For years, Florida lawmakers mostly ignored climate change under then-Gov. Rick Scott, who is now a U.S. Senator. But GOP Gov. Ron DeSantis has taken a more aggressive stance at tackling the issue, although environmentalists want him to do more.

Based on past trends, losses from flooding in Florida could devalue vulnerable homes by $30 billion to $80 billion, or about 15% to 35%, by 2050, according to a report from McKinsey Global Institute.

Average annual losses for residential real estate due to storm surge from hurricanes amount to $2 billion today, but that projection could increase to about $3 billion to $4.5 billion by 2050, the McKinsey report said.

“Flooding in Florida could not only damage housing but also raise insurance costs, affect property values of exposed homes, and in turn reduce property tax revenues for communities,” the McKinsey report said.

Furthermore, the impact of a 100-year-storm event could be even more devastating over time, going from $35 billion today to between $50 billion and $75 billion by 2050, the McKinsey report said.

A separate report from the climate-risk analytics firm Jupiter Intelligence said the percentage of vulnerable oceanfront properties affected by extreme flooding will rise in Miami-Dade County from 5% in 2019 to 98% by 2050.

By 2050, annual flooding damage county-wide in Miami-Dade County is expected to roughly double, leading to shortages in affordable insurance coverage and real estate market instability, according to the Jupiter Intelligence report.

“Ignoring, or underestimating, the actual economic risk posed by moderate flooding is common to other geographies in the U.S. and around the world,” said Rich Sorkin, CEO of Jupiter in a statement. “Almost none of this risk is reflected in prices. Most of this dynamic is not yet understood, nor is it implemented into the decision-making of financial institutions.”

The short-term impacts of flooding will be felt within the next decade, according to the Jupiter report.

The impact from moderate flooding of up to one foot in an oceanfront city in Miami-Dade County will increase from 13% of total properties to 48% of total properties. Properties at risk from extreme flooding will jump from 5% to 86% of the total, according to the Jupiter report.

The increased risks of flooding could leave lenders exposed to greater losses and insurers in need of adjusting their pricing to include the greater risks, the Jupiter report said.

“Homes, livelihoods, and the viability of financial institutions and the economy as a whole may find themselves under a Sword of Damocles, unaware of the extent of risk they bear, and without time to prepare,” said Sorkin, referencing the ancient parable about living under imminent peril.

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