|Are you having Fun? We sure are! April was another wild month in your local real estate market and May will be no different (and it’s already going haywire). The market is showing no signs of slowing down just yet, although it’s possible we’ll see this chaos stabilize this summer and we hope that it stabilizes because what is currently happening simply is not sustainable long term. There is no way of knowing exactly what is going to happen because what is currently happening in the market defies basic economics, which is scary as this could mean it’s a bubble going to pop, however nothing surprises us anymore after what has happened in the past year so perhaps this growth is here to stay which would be excellent for us all! Additionally, builder prices will continue to go up due to the cost of building materials, inherently propping up the resale market. And let’s not forget about interest rates being low and tougher lending rules that come into effect soon – these 3 things are indicators to watch closely in the coming month:
1. Price of building materials such as lumber
2. Interest Rates
3. New Mortgage Rules and a Tougher Stress test – Will this limit buyers enough to cool the market?
In April we experienced a new record high for the month in terms of homes sold, as Calgary’s housing market continues to bounce back from the pandemic lows recorded in 2020. I find that most industry professionals are focusing only on the “record sales” but let’s remember that we’re making up for not just 2020 but the prior years of suppressed markets. We are not trying to be a negative Nelly about it but just realistic and of course we are pumped because we are quickly getting back to previous home prices we were experiencing in 2014 and 2015! So if we can get back to where we once were AND THEN surpass those previous market highs across every market and sector in terms of home prices then that will be absolutely amazing, this is what we’re cheering for over here at the JW Realty Team!
ATTENTION BUYERS & SELLERS – THERE IS A SOLUTION! Ok, so buyers are scared to buy because of the “bidding wars” and lack of options… And sellers are scared to sell and then having to buy. These are both legitimate concerns but like with anything in life you can mitigate the risk! Buyers, if you’re working with an agent who is ready to jump at an opportunity quicker than others then we will get you the right house (unless your search criteria is so slim that you’re looking for a “unicorn”). In the past few months we have beat the competition to the punch and had our offer accepted before the rush got into the house. And for sellers, we can mitigate your risk by ensuring that we get top dollar for your house and also that we get a longer possession date of perhaps 60-90 days if possible, which takes the pressure off to have to “buy now”. These “buy now” buyers are typically the ones in bidding wars because they have no time or options and they’ll happily pay a premium.
Thanks to all of our amazing clients who continue to trust in us, nearly 100% of our business is referral based which has always been our goal and is truly the backbone of our business model. We are so incredibly grateful for each and every one of you.
Have an awesome May!
Justin, Erica, Shay (Trainee)
Spring Market is here and it’s B-A-N-A-N-A-S! The housing market had the best March sales in over a decade in terms of volume of homes sold, we are now roughly 5% behind 2014 prices overall which was arguably the peak of the market. The low lending rates (which will rise again) and consumer appetite to improve their home after spending a lonnnng year in it due to a pandemic are still fuelling the market demand. As mentioned in previous newsletters, the cost of building materials is also driving up the prices for home builders and this is pushing people into the resale market.
So it’s a hot market, how long will it last? Is it a bubble?
Well first of all, it’s only hot in certain sectors and home types. The media is excellent at blowing up the success of particular segments to make it seem like “everything” is doing well. Fortunately most detached homes are experiencing strong market conditions, and since detached single family homes are so competitive right now we are seeing an overflow to semi-detached homes beginning to gain traction as well. Row Townhouse homes & condos are stable – they’re not on fire, which in all fairness is a win after years of sliding. Perhaps we have hit bottom!
Buyer demand in the $300,000 – $550,000 price segment for detached homes is amazing right now. It’s funny because we are experiencing overpriced listings “swinging for the fences”, which still doesn’t work and then we’re seeing homes priced very well that sell firm in less then 30 days and ALSO we are seeing many Realtors underpricing homes to get 15-20 buyers through on day one to create multiple offers and drive the price up. BUT they’re typically getting the same price end result as just pricing right to begin with and if you price right and get multiple offers then you’re truly building extra value on top for your sellers. Anyways, it is interesting times in the Calgary and surrounding cities real estate market and fun to be deploying lot’s of unique strategies.
Human nature is a funny thing, when playing the stock market and a stock catches on fire then everyone all of a sudden wants it and real estate is no different. A fact of the stock market too is that “most” stocks go up and they ALSO go down, it is cyclical and picking an investment that goes up MORE than it goes down over a long period of time is called picking a winner. So why does this matter to mention this in a real estate newsletter? It’s important because we believe that we are IN A BUBBLE. When the bubble pops some homes will still be great investments, but others will lose value and come back down. Therefore, when navigating a market like this it’s incredibly important to ensure that you’re buying or selling with a long-term mindset in place and that you’re considering criteria such as location, community development, trends in the neighbourhood, and historical market trends etc. Understanding the market and where it may go in the short and long term can allow you to make a wise investment and buying/selling real estate is the same as playing the stock market. The market is on a heater right now and hopefully it lasts but it’s not sustainable, so eventually it’ll cool off.
To summarize, there is INCREDIBLE OPPORTUNITY right now in our real estate market, BUT JUST AS MUCH RISK so before you invest or divest give us a call to chat because as you know we will always shoot it to you straight.
March was a whooping month of home sales for us, we had our best month to date and it has rolled over into April. Thank you to all of our clients who gave us the opportunity to help them achieve their real estate goals in a very complicated market, you’re the best!
Enjoy the spring weather, get some sun, go outside and get ready for an excellent summer!
Justin, Erica, Shay (Trainee), Lucy (Shay’s Trainee)
|Holy smokes that was one heck of a wild February in the real estate market. You’ve probably heard or read about the spike in sales last month which was the best February since 2014, particularly for detached homes as the Attached Home and Condo Sectors are still lagging. But how is this growth possible during a pandemic and the current economic turmoil or is it a bubble? Let’s dive deeper into it below!
The traditional indicators such as unemployment, small business failure, struggling GDP etc all point towards the market being suppressed, however the under $600,000 detached home market is absolutely on fire. There are a number of reasons with these below being the main ones:
1. Low Interest Rates (which are on the rise by the way)
2. Covid Stir-Craziness & Vaccine Confidence (People want more space and an office too, compounded with the increased consumer confidence from the Vaccine rolling out)
3. e-commerce is here (what would’ve taken 10 years to achieve happened in one year, many people may even work and shop from home forever now!)
4. Supply Chain Issues Driving up Builder Pricing (Builders cannot build as cheap as pre-pandemic as material costs have skyrocketed, making new builds more expensive and propping up the resale market) ps. Remember last fall when we predicted this would happen 😉
5.DEMAND! Buyer demand right now is strongest in the more affordable $300-$600k market, so of course it’s doing well (see Market Distribution graph below), it’s what the majority of consumers want. Additionally there has been a fundamental change with buyers who would’ve been happy living in the downtown core who now want more space and are moving outwards.
IS THIS JUST A BUBBLE THAT IS ABOUT TO EXPLODE?
The honest answer is that nobody knows for sure and if they say that they do know, well then they must have a magic crystal ball that we want to get our hands on! The truth is that the market will only stay hot “IF” spring market does not provide enough supply of homes to meet the current increased demand from these 5 factors above. Right now most Sellers are aware of what is happening and they’re gearing up to take advantage, therefore, if more homes are listed than needed (and as interest rates go up) this will cool down the market. But nobody knows how many thousands of homes will be listed over this next month and whether it will meet demand, only time will tell.
One thing that comes to mind is that Jan – March 2020 pre-covid, it had seemed as though we had hit bottom at the end of 2019 and that we would see a growth year….but then Covid happened. Now we are 2 months in 2021 and it once again appears that we may see growth and spring market will be the determining factor, and it’s likely we’ll see some growth.
If you’re a seller, you need to call us ASAP as you may shocked what we can do for you right now. We’ve been able to achieve some incredible things for clients lately. If you’re a buyer, you also need to call us because as interest rates rise you may need to get shopping and if you do go shopping we need to discuss strategy as it’s insanely competitive. Or if you’d rather sit back to ride this wave to the moon and watch to see if this bubble pops or keeps growing, then that’s cool too, it’s going to be a wild ride.
February was amazing for us as you’ll see below and we once again have our amazing clients who continue to refer us to friends and family, we are so grateful for your support, THANK YOU.
Have a great spring everyone!
-Justin, Erica, Shay (Trainee)
As mentioned last month, super low interest rates are pushing for a more stable market. We are officially in a Balanced Market in most regions versus the Buyer’s Market of 2020 (and a seller’s market in some segments!). There’s no way to say how long this will last because so many crazy outliers such as Covid Restrictions, Unemployment, Political Turmoil & The Price of Oil all play such a huge part of where real estate prices will be by summer. One thing though that we are confident to say is that we are likely to be in this balanced market until spring – this will be a stable first quarter in the market, which is a huge win in our opinion.
Come spring we expect to see an aggressive surge of homes hit the market (especially if Covid restrictions are lifted & homeowners are more comfortable to list) and with low interest rates hopefully we have enough buyer demand to gobble up the supply of homes.
Every segment of the market is different right now, if you’re selling a condo then you’re almost certainly still in a Buyer’s Market, if you’re selling a $350,000 detached home then you’re likely in a Seller’s Market. If you’re selling a $650,000 home it’s likely going to be a balanced market and the higher end luxury segment is still a Buyer’s Market. Sorry for repeating this every single month but it’s just so incredibly important to understand that even though the market as a whole is balanced, that is just an average and your specific market segment may be a Buyer’s or Seller’s market. Long story short, just ask us and we will shoot it to you straight because there is a ton of questionable information being published right now and when you hear other Realtors or people in the media declaring that it’s a “Seller’s Market”, well that is just false in our opinion, it’s Balanced unless they’re specifically speaking to a community and the precise price point that perhaps indeed is a seller’s market.
In a nutshell, 2020 was a beast with aggressive spikes up and down in the market, it was very volatile. In 2021 so far (as predicted last month) we are seeing stability and as restrictions ease and small businesses hopefully survive and interest rates stay low, then just maybe we will see some growth, AKA our home values going up! But let’s not get ahead of ourselves just yet.
Rewind to the start of 2020 – we were predicting growth and we were on track for it too, well until Mid-March of course when you know what happened. So will we pick up where we left off almost a year ago? Likely not, but the economic indicators so far in 2021 aren’t too shabby so the chance of a stable market with potential minimal growth is pretty awesome.
Thanks for all of our clients for making January our busiest one yet. We are off to a solid start in 2021 ready to shatter real estate records and it’s all because of our amazing clients who love that we are real estate nerds, thanks for continuing to support us.
Coming hot out of the bullpen sometime next month is Mr.Spring Market and rumour has it he is going to be throwing some heat.
Have an awesome February everyone!
Justin, Erica & Shay (Trainee)
Happy New Year!
We loaded this months newsletter with pictures and infographics, because they’re way more fun to look at rather than reading 🙂
But first, it’s time for the BIG QUESTION….What’s going to happen with Calgary, Airdrie, Cochrane and surrounding area real estate in 2021? Everyone wants to know!
The answers depend on who you ask and be careful who you ask or what you believe, we have seen some very misleading predictions lately. Factors currently shaping our market include COVID-19, low interest rates, low housing supply, builder prices rising in 2021 due to increasing materials cost meaning the resale market will be propped up, and a still questionable oil and gas industry, with some recent consolidation that could spell more layoffs. Our prediction is that we will see a balanced market in 2021, the positive factors above such as crazy low interest rates are off setting the negative factors. If someone says it will go up or down an exact percentage, well then that’s simply a guess, in our opinion (unless they have a crystal ball). We advise that everyone should expect a balanced market with minor increases and decreases depending on what market segment you are in, especially in this first quarter of the year.
Meanwhile, Canadian economists and other realty firms are saying 2021 should be “similar to 2020” or “up” slightly. On pricing, many analysts expect the average to increase by 4% to 6% nationally, keyword here is “nationally”. Alberta’s economic conditions are not comparable to the National averages. Here in Calgary, industry watchers anticipate that a possible increase to be about 3%, (keyword “possible”) keeping the YYC average price somewhere in the mid- to higher-400’s for the year. Again, take this with a grain of salt, it’s completely a guess to say 3%. Hopefully they’re right but these industry watchers saying 3%, how do they know what is going to happen with Covid, High Unemployment Rates, Small Businesses Failing due to Covid Restrictions, or Interest Rates 6\six months from now? They’re guessing. Long story short, expect balanced conditions! Which is super awesome considering the Calgary Real Estate board last April was predicting a largely inaccurate 10% decrease in home prices by Jan 2021, which didn’t happen. Instead we saw mostly minor decreases in the market.
Lastly, anyone thinking of selling should know that there is low supply of housing on the market right now. Typically there is a lower level of supply this time of year but year over year it’s even lower. Meaning that it’s a great time to sell because Buyers are quite literally waiting for more listings to come on, there’s not even choice for them in some segments of the market!
Thinking of listing soon? January/February 2021 could be a great time to do so with such little competition before everyone floods the spring market, likely creating a competitive landscape. Looking for a new place with more space (for the swanky home office and gym)? We know where you can find it.
We hope that everyone is off to a great start in 2021. Stay healthy and be safe.
Justin, Erica & Shay (Trainee)
|2020, it may have been a tough year for you or maybe it was a great year, but we know one thing for sure, let’s stop talking about it, WHO CARES anymore. Regardless of how challenging or rewarding it may have been we all need to put it behind us and begin thinking about how important it is to spend time with family over the holidays (pending restrictions of course). AND then 2021 is going to be a great year for all of us. Mindset is incredibly important and we truly believe that each and every one of us can have the best year yet if we have that positive vision, we take care of each other and we all work our butts off, so we encourage you to take the reins to dominate 2021.
The real estate market continues to break normal seasonal trends. This past quarter has been higher in terms of sales year over year, however we still haven’t made up for the original spring losses in sales volume. We are close though only 3% lower in total sales over 2019 which in our opinion is a HUGE WIN considering the wrenches thrown our way in 2020. Furthermore, overall home prices are stable in the $500,000 and below sectors while there is a ton of volatility in the luxury segments. Overall 2020 has still been a great year to buy or sell a home, it was just trickier than usual to navigate the market and many sellers got out of the market at a strategic time while some buyers took advantage of the market conditions.
What does this mean for 2021? Well in our opinion it’s going to be a busy market and that may be a good or bad thing depending on what market segment you are buying or selling in. We still have record unemployment and job loss across Calgary and the surrounding cities and we are smack in the middle of a second Covid wave that will inherently cripple many more businesses and create more job loss. Remember that real estate moves in line with the economy, let’s not all be too naive to forget this. This means that there will likely be more supply of homes hitting the market in early 2021 as homeowners may no longer be able to afford their homes, but this also means that more buyers are going to be salivating at the mouth to take advantage of the new inventory with record low interest rates! It’s just a matter of whether the demand from Buyers can match the increased supply of homes on the market…..At the time of writing this some lenders are offering mortgages for 1.69% (note that we are not mortgage professionals so talk to your mortgage advisor directly for what rates are applicable to you), that’s insane and that alone is fuelling much of the demand in the market.
Another interesting theory that pertains to our market conditions is the threat of interest rates rising in combination with people who have secure jobs. These people are eager to get into the market to upgrade their home with low rates. While some are playing it safe and burning through the doors at Home Depot to do a quick renovation to appease their appetite for change, many others are taking this as an opportunity to buy at record low rates, something like the lowest in 20 years! People are saving more money right now due to Covid restrictions and they’re sick of sitting in their current homes, they’re looking to improve their living conditions. Additionally, we will also add to this theory that people are spending way more time in their homes than usual due to Covid, and unless their home is spectacular already it leads to people wanting a change. And they’re saving money on top of this all and if they feel financially secure they are utilizing the extra time on their hands to upsize or downsize accordingly.
One more interesting tidbit to chew on. Due to the inability of home builders to gain enough access to building materials right now, the price of materials are rising across the board. This means, in our opinion, that in 2021 the builders are going to increase their new home pricing to account for the extra cost in materials. Naturally this may boost the resale market on the MLS! To explain, if you can buy a new house for say $500,000 in a similar community then the resale home will likely be lower, let’s say $480,000, because it’s not new and less sought after. But if builder pricing goes to say $525,000 for that same home then your resale home may have stronger demand pushing you closer to $500,000. Please keep in mind that this remains to be seen, but it’s a solid scenario that we may see in 2021 if building materials remain high.
So long story short, we are in unusual market conditions due to 2020 and it’s creating opportunity for both Buyers and Sellers. We believe that the first quarter of 2021 is going to have an aggressive amount of listings hit the market and “if” interest rates stay this low it’s going to be strong market conditions for most people. If you’re unsure how this will impact you, just ask us!
2020 was the best year yet for JW Realty, we doubled our clients and doubled the amount of people we were able to help out! THANK YOU to everyone who has trusted in us and continues to support us as we embark on our mission to just do real real estate better, with solutions that actually make sense for 2020. And 2021 too 😉
Happy Holidays Everyone!
-Justin, Erica, Shay (Trainee)
We imagine that everyone is sick of hearing about how “weird” (or bad) 2020 has been so we’ll skip doing that this month with a different approach that will hopefully leave you feeling inspired & get those wheels turning. 2020 has had some major victories and is also the dawn of a new age, the digital age of e-commerce. Never before has the world mobilized so quickly so everyone can digitally work from home during a pandemic. Many offices may never open again, and that may be a great thing for the companies bottom line and also allow workers more freedom to avoid commuting/ rush hour traffic, providing the ultimate victory of all —> spending more time with family!
Now why does this matter in a monthly real estate market report? Well because everything is shifting to e-commerce and those who do not jump on the train will be left behind. With people working from home this means that the type of homes people want will change, to maybe have an office space, or more outdoor space for example. This also means that when selling a home, it must be marketed properly with the intention of it showing to the best of it’s ability online in order to attract the right buyers!
The days of print brochures and sign branding to sell homes are done. Sorry Re/Max, you may as well call yourself Fee/Max until you change your business model for the future. And to be clear we are NOT mocking Re/Max agents specifically as some of those agents are the amongst best in the game, we just do not believe in the brokerage model of Re/Max and the marketing power behind the brand is soon to be ancient history, in our opinion. Furthermore, the days of just popping up a listing on the MLS are dead and although many of those agents are still in business, they too will become obsolete soon like many of the offices that are now empty. It’s so incredibly important in our opinion to market real estate digitally in a way that you maximize the amount of buyers stepping foot in the door, after all that’s truly our job, to maximize the amount of buyers viewing the property.
Additionally, the digital age of e-commerce that we’re entering means that it’s easier than ever before to research real estate and to make a wise investment decision. Although it’s easier than ever before to find a great property, there are still many aspects to consider that a wise agent can assist with like the future potential of the land, rentability, or what is trending in that community. Most agents focus on helping their clients find a house right? Well that’s part of it but they should be focusing on helping people find the right community, the right land/lot and then the right house comes third. The recipe for success includes all three of those pillars, not just one or two. To summarize, we will see the real estate industry take a heavy shift into e-commerce in 2021 and we will be there to ensure we’re on the bleeding edge of the sword with innovation so please watch for updates as we adjust to a new world of real estate.
If you don’t believe us, maybe this will solidify some validity. With growth of 475% in the past 2 years Maclean’s & Canadian Business have named Grassroots Realty Group a top 500 Canadian Business, ranked 51st in Canada! Started in Northern Alberta by some extremely motivated entrepreneurs, we were fortunate to team up with them to lead the expansion into Calgary and it feels great to have the recognition we deserve for changing the game and doing exactly what we all set out to do. Innovation and the digital age of e-commerce for real estate has already begun.
So far in 2020 our local real estate market has had a decent rebound considering the initial hole we were in from the pandemic but we are still behind last year with total sales roughly 6% below last years levels and prices about 1% lower overall. That’s a victory, take it because we’re still in a pandemic whether we like it or not! Also take the numbers with a grain of salt because your community may be 5% down (or up) for example, the market is still incredibly fragmented so the overall numbers do not truly mean much, it comes down to the specific community you are invested (or investing) in.
Despite uncertainty in the market, last month we had record sales for the JW Realty Team and it appears to be continuing into winter. We are so incredibly thankful for our amazing clients who continue to work so hard with us. It’s no secret that our business model is built around the simple concept of REPEAT & REFERRAL…. And it’s working! There’s no secret ingredient, it’s called doing an excellent job, working hard, always shooting it straight and then our clients refer us. So thank you to everyone who continues to support us as we aspire to change the game with how real estate should be done. Much love to you all and your families!
Justin, Erica & Shay (Trainee)
|What an amazing Fall we are having so far with this weather. We hope that everyone takes advantage of these last weeks of warm fall weather, we sure plan to!
In a normal year the real estate cycle would be much easier to predict moving from Fall into Winter, however, this is not a normal year. Instead of predicting the market we would rather look at the facts and express our optimism towards market conditions while being realistic that there are major global, political and economic influences that can significantly impact our market in a heartbeat.
2020 has certainly been an “odd” year in the Calgary and surrounding area real estate markets. We have seen the market crumble and then rebound (in some segments, not all). Although the market as of today is seemingly stable, it’s also very volatile. This can be a good thing or bad thing depending on how and where you’re investing or selling your property. The volatility is being influenced by the local economy, the pandemic and record low interest rates. We have seen some markets adjust downwards with significant decreases, BUT others in the lower price segments are actually trending up which is great to see. Really it’s not a surprise that more affordable housing is doing well during a time of economic, political and global uncertainty.
One thing that is driving us NUTS is how some Realtors are saying “Record Sales”, “The market is HOT!”, yadda yadda. #Classic
YES, we did have more sales activity June to September 2020 versus 2019, however this was simply making up for an absolutely horrible March – May that was crushed by the pandemic, and we’re still behind if you look at March to September versus just June to September. Realtors can sway numbers in their favour to be deceiving and that’s not what we are about at the JW Realty Team, we cut through the noise to shoot it to you straight. So we urge you to take these headlines with a grain of salt and to instead look at the long term numbers.
Year-to-date sales activity remains nearly nine per cent below last year’s levels, but the positive side is that prices are only just over one per cent LOWER than last year, which isn’t bad considering the curve balls we have been thrown in 2020.
We are not in a bad market by any means. Although it is very volatile, much of the market will remain stable so there should be little to no fear for most people, depending on your community and price point.
September was a busy month of sales for us and we are incredibly thankful for all of our amazing clients who trusted in our business model and processes.
Seriously, THANK YOU!
Make sure that you spend lots of time with family and friends this October, while staying safe and enjoying some great weather.
Justin, Erica, Shay (Trainee)
|We are now nearing the end of a wild summer, hopefully you had a great Sept long weekend with family and friends as that is what it’s all about. We also hope that everyone has taken advantage of all the sunny summer days versus the previous years of rainy or smokey weather. 2020 has been an “odd” year so the decent weather has been a victory, soak it up and take the win!
September 2020 will be an interesting month in our real estate market. With kids back to school, a world pandemic still in motion, mortgage deferrals ending, extremely low interest rates and high Alberta unemployment rates, we are riding a rollercoaster of ups and downs. June to August we experienced a rebound in the real estate markets (specifically due to the under $500k market having high demand, see chart below) after everything was suppressed in the spring months due to Covid-19. This rebound means that we had a high volume of sales for these months compared to the previous year, to make up for what was lost in previous months, but we’re still behind year over year so take it with a grain of salt.
We have been watching other Realtors post about “record sales” happening in their brokerage or local markets but that’s not reality because it’s such short term thinking. We need to be realistic and we all need to continue working our butts off to get back on track. We are Albertans which means we work hard and we must keep our foot on the gas. Long term we’re still making up for the damage done. AND, it’s naive to believe that we are back on track already and that it’s all sunshine and rainbows. Calgary’s unemployment rate sits at 15%, which is well above the national average of 11%, and many businesses are holding on by a thread and this fall is likely when we’ll see some more fade away…. AKA more job loss.
By nature we are optimistic people at JW Realty, but we also believe in being realistic and shooting it to you straight. Yes, June to August has been unbelievable for home sales, trust us, we know as we broke records too for volume of homes sold. September will likely be decent as well pending no further major disruptions in the market. However, in our opinion, this fall we will see an adjustment in the markets overall. Some communities and markets will escape unscathed due to higher demand, but overall we’re going to see a drop in home values. Don’t panic, it may be minor or stable for your specific home value, and if you’re buying then I bet you’re just salivating at the potential opportunity.
The past few months have been awesome for the JW Realty Team in terms of amazing clients who have trusted in us to get the job done, we’ve been very fortunate. We remind everyone to understand that we are not yet through 2020 and that there are hardships to come, but also some victories so keep your chin up! Brace yourself for an interesting fall and please do not panic as there is a solution to any real estate need that you may have. And probably more opportunity than you suspect…when there is uncertainty, there is opportunity.
August was a busy one and it’s all thanks to our wonderful clients trusting in our process and supporting our business model to achieve the sale they needed and then referring us to others, you rock!
Enjoy September folks, it’s going to be a great month and don’t forget to soak up some sunshine while you can 🙂
After a rainy beginning to our summer we’ve finally been getting the sunshine (and hockey!) that we deserve & we hope that you’ve been taking advantage of it. In 2020 we haven’t experienced too many “victories” for us Albertans so if we can get some good weather then heck yes lets enjoy it! The Calgary and surrounding area real estate market is going through an “unusual” period right now. Typically the real estate cycle slows down significantly in August as buyers & sellers go on holiday, plus many buyers want to buy before August if they have kids so they can be moved in prior to September when school starts. With Covid suppressing the market this spring we are likely to have some elevated numbers in August in terms of showings & demand because we’re still on the tail end of a wave making up for a lost spring market.
That being said, you may be wondering what the fall market is going to look like? What we can say is that it’s not going to get better than it is today for home prices. The Calgary Real Estate Board chief economist is saying to brace for a 3% drop overall in the market. Now, this is a stupid number because some markets may change by 0.5% while others change by 10%, so please take it with a grain of salt. What we can take from this 3% prediction is that there is much uncertainty in our economy right now & this will inherently have a negative impact on the markets this fall when it compounds together. Government assistance for many will end, mortgage deferrals will end causing an influx of listed homes (increasing supply without the demand to meet it), we have record unemployment rates, many businesses will fail due to being suppressed during the pandemic and the energy sector which drives our economy is a wild card, to name a few…..
To summarize, and it’s probably no surprise to you, we predict that our real estate market is going to trend downwards for the remainder of 2020, and likely into 2021. For how long? Nobody knows. I wish I was saying the ladder, however the truth is that we are going to feel the repercussions of the above economic factors this fall. But DON’T PANIC, you may be in a market that will escape unscathed. For example, homes priced in or around $400k are on fire right now, the demand exists for this price point, therefore you may have nothing to worry about. If you’re priced at $700,000+ then there will likely be more volatility in your market. Or you perhaps are in a market with a unique home that is in high demand, therefore prices remain stable. To no surprise, the most important factor to sell a home right now is to understand the market and price your home right.
If you’re curious what your home is worth, how the downturn will impact it, or if you’re curious how a prospective home purchase will be impacted this fall, then please just let us know as we will ALWAYS shoot it to you straight.
On another note, despite being in a pandemic and wacky 2020 chaos, we continue to break records at JW Realty Team selling homes like crazy and it’s all because we have amazing clients who trust in us, so THANK YOU to the amazing people who have given us the opportunity to work together.
Enjoy the last month of summer folks 🙂
Justin, Erica, Shay (Trainee)
2020 has been a real curve ball for Calgary & Area real estate including spring market in July!? Somewhere around June 10th we began to see the amount of daily showings actually surpass last year at this time. Now keep in mind that we were down roughly 80% at one point this spring so it’s no surprise that we had an increase once all the suppressed buyers entered the market once again in June. To be clear, just because we have more buyers in the market this does not mean that it directly equates to more sales. Sales are certainly improving the past month but we are actually about 2% down year over year in June which isn’t bad considering the variables we’re dealing with.
Truth be told, in our opinion, we are living in a bubble right now. We are yet to feel the effects of unemployment (that is in the double digits!), the energy sector is a wild card that drives our economy and let’s not forget that Coronavirus is not gone just yet, it’s still tanking global markets with repercussions coming. There recently have been some economists writing articles projecting that we’ll see a massive drop in Calgary home prices but to us that is pure speculation. Yes there will be an adjustment but it may be 1% in your community while it’s 10% in others, therefore take those articles with a grain of salt and ask us instead what we think will happen in your local community market. What does this bubble mean for real estate in general? If you need to sell then you better capitalize on this bubble because who knows how long it will last before home prices adjust and if you need to buy then there is more supply of homes entering the market then demand so you can have your pick of the best listings.
June was a busy month for us at JW Realty, we were slapping up sold stickers on signs like crazy and helping many buyers achieve their goals. Thanks to everyone who gave us the opportunity to assist them, you rock! Also, we were incredibly busy training a new member of the team, Shay. After rigorous training and many sleepless nights we finally have her pulling her weight and chipping into the family business. Below you can check out some pics of Shay’s first day on the job. She’s a natural.
Have an amazing July and try to enjoy some summer sun, you deserve it 🙂
Justin & Erica
Welcome to the “Now Normal”. The past few months have been nothing short of weird and it has been tough for everyone to transition during these challenging times. However, we are happy to report that there is light at the end of the tunnel. The Now Normal is very different from the Old Normal and we certainly have not fully recovered, nor will we in 2020 (in our opinion) but what we can say is that the market is slowly stabilizing and buyers/sellers are once again entering the market. Which is great news! Below you will see a graph showing how Coronavirus caused a devastating dip in home showings, inherently this suppressed sales over the past few months but we are now seeing the line on this graph improve. It’s not perfect, but it is positive news so let’s take a small win and run with it!
In May there was a 44% decline in sales from last year’s figures and to no surprise much of the activity has shifted towards more affordable homes. With significant job loss, business failure, oil & gas struggles, low consumer confidence, political turmoil and still many unknown variables, there is no timeline to when we will see a recovery. What we can say is that 2020 will not see any growth, we will be licking our wounds well into 2021. What does this mean for sellers and buyers? Sellers need to act now, in our opinion, or they need to wait until 2021 or maybe even 2022 to once again be able to sell at today’s home values. For buyers, you can lick your lips in excitement because there is ample opportunity today to find a great home and it’s going to be great for the rest of 2020.
An interesting theory we have is that since we had a suppressed market in April & May when we typically see the highest volume of home sales, AKA “spring market”, is that we will have a late spring market in June – August. As of today sellers now seem to have the confidence to list their homes and to have buyers enter their homes once again. On the flip side, buyers now feel comfortable entering people’s homes. To summarize, there is still a need for many people to achieve their real estate goals and those goals will be achieved, they were just delayed for many people!
Thanks to all our amazing clients for riding out the past few months with us and trusting in us to assist them during a challenging period. We are extremely grateful for you all!
Justin & Erica
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