Well that was by far the weirdest April we have ever experienced! There is no perfect way to summarize how odd everything has felt, we are simply in uncharted waters. We hope that everyone is safe, taking care of their families and we wish you nothing but happiness this spring. That being said, we believe that there is also more clarity this month versus last month. We entered April with intense fear of what may happen and as a community we are persevering. We are yet to be in the “safe zone” from Covid-19 and we by no means are declaring that we are. However we have all adapted to a lifestyle that is needed to fight the virus so we can get back on track and we just think that it’s incredible how everyone is coming together as a community.
In terms of the real estate markets, as projected over the past month, they are suffering. April sales declined 63% over last year. This isn’t a surprise since real estate moves directly in line with the economy and Alberta is facing some challenges with a Covid-19 economy and the state of the energy sector. We are going to see some decreases in home values over the next few quarters. BUT don’t panic, the drop in your home values may be minor (or major drops depending on how over supplied your market segment is) and if you’re not selling your home then who cares! If you plan to sell a home this year then you need to get on it ASAP, because the remainder of 2020 won’t be better than it is today for your home value, so get top dollar while you can. If you’re buying, well then you’re going to see some great options!
In terms of Canadian real estate, there are two important pieces of good news at the moment: The first is that you can defer mortgage payments for up to six months if you need to. The second is that the Canadian Mortgage and Housing Corporation (CMHC) has begun to purchase mortgage debt from the banks in order to provide them with cash and keep them in the black.
Although April was certainly an odd month, we are thankful for all of our clients who continued to work with us despite the challenges we faced. You are our heroes for persevering. Now it’s spring and we should all be excited for the sunshine, the outdoors and for normalcy coming soon.
Justin & Erica
The most important message that we can express right now is that we must all stay safe, stay home, take the proper precautions seriously and take care of each other. Of course this means listening to our provincial leaders and social distancing, but in our opinion, it also means that it is imperative that we pull together as a community to support small businesses when possible, help out our neighbours when possible, all while respecting the guidelines we are under. There is no single person who isn’t affected by this Covid-19 pandemic, therefore, we must all work together so we can be stronger as a united community.
Just as an FYI in case you haven’t already heard, the buying & selling of Real Estate in Alberta (AKA housing), banking, lawyers and land titles, have been deemed essential services. Therefore the markets will remain open in April. Now this does not mean that everything is “normal”, it is actually far from normal, we are living in a brand new world that none of us have ever experienced. Buyers and sellers who need to move, sell or buy a home still have the option, however there are some extreme precautions in place to ensure it is done in the absolute safest possible manner. If you do not need to be buying in April then now is not the time to be out shopping around, but if you do then we can still make it happen. Once the dust settles in a month or whenever that may be, real estate is going to be extremely busy while the markets shift to a new normal that is influenced by job loss, business failure and low consumer confidence. to name a few variables. The best positioned sellers and buyers who are ready will be able to take advantage and achieve some amazing real estate goals in the short term. Long term however, there will be some challenges……
In terms of the state of the market today, you can probably guess without us telling you what is happening right now. In March we had levels of transactions that haven’t been this low since 1995. (The only constant here is that the Pittsburgh Penguins were also the best team in 1995!) Simply put, demand is way down and supply is still up. We are in a buyer’s market and will be for all of April.
Normally this is an opportunity for a monthly rant on shooting it to you straight on what is truly going on in the markets and why most media updates (and many other real estate professionals) are misleading. However, with so much uncertainty around how long these changing variables such as low oil prices, suspended businesses and Covid-19 will exist, we will hit the pause button for a month and revisit much more in depth this coming May in order to avoid speculation or offending anyone during a sensitive transition. For this month’s newsletter we want focus to be put on all of us working together so we can all get through the pandemic and support each other during & after.
If it is time sensitive to you to learn more about what we think about the current market because you are currently in the market, then send us a quick message. We are happy to inform you on where we believe the market is going in the short/long term and what to expect this summer, because we certainly do have a strong opinion on this. If it’s not urgent to you to know this information then please stay home and focus on taking care of yourself, your family, your business and your neighbours during these challenging times.
Thanks to all of our incredible clients who persevered in March during a global pandemic to achieve their real estate goals. You truly are heroes in our eyes for staying the course until you found success.
Take Care Everyone,
Justin & Erica
Welcome to Spring, a peak season for home sales, prematurely planning camping trips and firing back up those BBQ’s!
As you may have heard, the Calgary & Area real estate market is off to a positive start in 2020. After the first two months we are currently ahead of 2019 by 12%, however, take this with a grain of salt because February 2019 was our worst February since the 90’s. So let’s not get too excited just yet, but lets absolutely take this small win for now and dig a bit deeper into what is really going on below.
A few months back we predicted a very “fragmented” market in 2020, well that is absolutely what we are now seeing. Some specific home classes such as inner city infills North of the Bow have 50+ Active homes competing for only 1-ish sales per week while other segments have 75%+ of homes selling each month, and many with multiple offers.
Obviously it’s more fun to be on the quick sale/top dollar for your home side of the spectrum, but even if you’re planning to buy or sell in a hot market you still need to understand how to be positioned. We are seeing hot markets right now with some of the best homes not being positioned properly and unfortunately those homeowners are missing out on all of the fun. The old school Real Estate Agent tactic that is not so secret or at least shouldn’t be a secret of “List your home high and then we’ll do price drops so I can keep my sign in the ground and market myself longer” is still very much a real thing. We’re not saying that there is anything wrong with those agents that choose this as their business model. But we will say that we would rather sell your home and preferably do it quickly for top dollar versus messing around for months.
So even though we are working with this “fragmented” market it is tough to see through all of the noise because so many listings are either overpriced, not marketed properly or have become stale. This leaves buyers and sellers who are looking from the outside in confused to whether the market is truly improving or not. If 10 for sale signs go up in your neighbourhood that may be a good thing, or a bad thing for you. Curious about your street? Just ask us for our honest opinion. That aside, we can tell you that the market is certainly improving, however it’s only relative to what you compare it to. If we compare to last year, then yes we’re kicking ass, but if we are to compare to 10 year averages then it’s a different story.
The point here is that yes we are seeing some awesome growth and some markets are becoming ripe with opportunity for the picking, while others are becoming more over supplied with no demand to keep up. Confusing? Well it’s a fragmented market, there is no one term to describe what’s happening right now in the Calgary and Area real estate markets other than that you must understand the market data and be able to see through the noise.
Lastly, we wanted to mention how we’re starting to see a trend of people “accepting” that today’s market is the new norm. In Alberta for years we got used to the Alberta Advantage, boom & bust, big gains – but now we’re seeing a steadier cycle and buyers/sellers have seemed to accept this versus last year when it seemed that lots of people were still holding on to some hope for a miracle boom. We personally think that this is a good thing, a nice reset for us all. And we also think real estate is cyclical, runs in line with the energy sector and yes we do believe that we will someday see a boom again. But without a crystal ball the timeline for a boom remains uncertain.
Lastly, a huge THANK YOU to all our clients in 2020 so far for allowing us to fulfill our goal of helping as many families as possible with their real estate needs. If you know of a family member or friend who could use some help to fulfil their real estate needs, we are happily accepting more clients in 2020 and would be grateful for the referral.
Justin & Erica
Just like that the first month of this decade has cruised by! We hope that everyone has had a solid start to the New Year by sticking to those resolutions and crushing your goals.
We’ve been busy getting a jump on the new year with helping our clients navigate the 2020 real estate market but behind the scenes we have been working on some stuff and we have a few big announcements this month that we are excited to share with you!
First announcement, Justin is now licensed to trade in Commercial Real Estate. We would like to announce that we are officially opening the Commercial Real Estate arm of our business to coincide with our Residential side of the business. The commercial real estate market is completely different from the Residential Market and it’s exciting for Justin to be able to actively put his business skills to work with a new real estate challenge.
And heck while we’re at it, why not announce a third arm of the business that we’re kicking off in 2020, flipping homes! Not only will we be working on projects ourselves flipping homes in the Calgary market (HGtv, here we come!), we are also working with investors to help them structure the right strategy to flip homes, including how to buy the right home, what renovations to complete to have the highest ROI and how to sell at optimal margins. We now have three arms of business at JW Realty, however we don’t like odd numbers……so you’ll have to stay tuned to hear what the 4th arm is 🙂 Coming Soon!
If you recall our market update from last month, we focused on how the market is going to be extremely fragmented in 2020, not “stabilized”. I hope that you’ve been ignoring the mish mash of media saying that we are balanced, or a buyers market or that we’ve hit bottom. That’s all a crock because it’s not specific enough. The truth still is that it depends on which market you are buying or selling in. There is little to no consistency that warrants saying that the market as a whole is stabilized, it’s just too fragmented and there are too many styles of homes.
So with that note, let’s remember that in order to sell for top dollar or purchase at or below market price, 2020 will be a year that understanding the economics of real estate is extra critical. That being said, don’t be afraid to use us as a resource or as a sounding board, we understand the data very well (#RealEstateNerds) and we can 100% help you achieve your real estate goals or at least give you the information that you need to make an educated decision.
Lastly, a huge THANK YOU to all our clients in January for allowing us to fulfill our goal of helping as many families as possible with their real estate needs. If you know of a family member or friend who could use some help to fulfil their real estate needs, we are happily accepting more clients in 2020 and would be grateful for the referral.
-Justin & Erica
Happy New Year!
Welcome to a new decade! We hope that your holidays have been the perfect measure of food, wine, family, friends, fun and laughter.
This year at JW Realty we are focusing on having a 20-20 vision, pun intended. We are looking forward to growing our team of real estate professionals, introducing some new divisions of the business (stay tuned in the coming months!) and also continuing to provide industry leading service and skill. Currently we (Justin & Erica) are working as a team to better service our clients and we are committing to a level of service and skill that freaks out traditional real estate teams. We feed on our aggressiveness to be better, different, value driven and modern with our business model because we are in a decade that will thrive on having stale business models disrupted. And let’s embrace it because this is what will make 2020 part of the most interesting and exciting decade yet!
Instead of writing a long boring update on how 2019 overall home prices declined by 3%, marking a 10% decline since the 2014 slowdown in the energy sector and overall sales volume was up by 1% (which are true stats by the way), rather lets focus on 2020 and discuss how home values will be affected this year instead of last year, including a “stability myth” to look out for.
Although most headlines from the media or other Realtors will read that the real estate market in Calgary is “stabilizing”, this is very narrow focused because the truth is that when you dissect the market, there are many communities that are far from hitting bottom, in our opinion. Additionally, some communities are now balanced, while others are in an upswing. Our point here is that we are at a point in the real estate cycle where there is little consistency across the market as a whole to signal stability.
For example, in 2014, almost every piece of the market was in an upswing, while in 2017 most of the market was depressed, yet in 2020 we will have a diverse mix. So yes it is true that the overall real estate market is “stabilizing” compared to the year before because some pieces of the market have indeed hit bottom and we are seeing some communities recover, however, be careful how you interpret that because the market you are currently invested in, or plan to invest in, may not have even hit bottom yet. Therefore, instead of being like every other Realtor and just saying that the market is stabilizing, we are saying that it is fragmented. Fragmented in a way that you simply can’t listen to headlines and believe that they for sure apply to you, you must dig deeper.
We predict that every community in Calgary will perform differently causing huge inconsistencies. Meaning that 2020 more than ever if you are buying or selling real estate will present huge risks AND more importantly, huge opportunities. It is extremely exciting to think about the opportunities that exist in a market like this, especially when you can buy under valued properties, trade up to a better property, do flips, sell your home at it’s highest value, acquire income properties etc, just by having an edge on understanding the market. Opportunity exists in 2020, we just need to block out the noise of a so-called stabilized market in order to see it.
To summarize, 2020 will be a fragmented year in the real estate markets we live and invest in. At JW Realty we believe that 1. geopolitical influences on industry, especially Oil & Gas, 2. growing net migration and 3. Albertans getting back to work with optimistic attitudes in order to spike consumer confidence, all need to coincide together first in order to be able to say that we have a true stabilized real estate market. Until then, let’s enjoy the opportunities presented right in front of us, because there is much fruit to bear!
For the analytical folks, i’ve included some extra stats below to highlight how Airdrie and Cochrane have performed over the past 10 years compared to Calgary, year over year.
Lastly, a huge THANK YOU to all our clients in December for allowing us to achieve our goal of helping as many families as possible with their real estate needs. December was one of our best months of 2019 for transacting homes, which is great to have in a season where real estate can sometimes slow down, so thank you for allowing us to achieve this! If you know of a family or friend who could use some help to achieve their real estate needs, we are accepting more clients in 2020 and would be grateful for the referral.
Consider what 20-20 vision you want to follow and then get out there and make it happen 🙂 Again, Happy New Year everyone!
Justin & Erica
Suite # 717, 203-304 Main Street South
Airdrie, AB T4B 3C3