Read all about it! Don’t miss the most important events in Calgary real estate news for the weeks of December 29, 2013 - January 11, 2014. Compliments of the Calgary Home Team.
Banks, Insurance Companies Clamp Down On Financing Post-Flood, CBC
Residents are in a state of frenzy and frustration following the recent announcement by many banks and insurance companies that, due to Calgary being an unpredictable area post-flood, financing options will be reduced for home owners. The news comes seven months after the southern prairies were destroyed by the torrential phenomena.
Companies are laying down a blanket policy, wherein any homes within the vicinity of certain high risk area codes must inherit extra conditions to mortgages and financial contracts. Many prospective home owners are being forced to either pursue ancillary insurance options, pay for home inspections, or lay down 50% of the property purchase price up front, in order to satisfy these new blanket policy terms. A number of these "suspect" homes are not even within the flood fringe zones, but reside within the area code of properties that were.
The aforementioned insurance options are no easy task to take on for Calgary home owners either, with premiums having increased by 80-100%. Meanwhile, residents must decide if purchasing this insurance would even be worth the money, as mandatory deductibles have skyrocketed upwards to $20,000.
While these policies are showing no signs of stopping anytime soon, residents of Calgary real estate are urged by industry specialists to consider that this is not the decision of city officials, nor is it the fault of local bank and insurance company managers.. These policies were put in place by executives based primarily in Toronto headquarters, who are simply interested in recovering their assets after the insurance industry took a hit following the Calgary floods.
Calgary Luxury Homes Still A Hot Commodity, CREB
Keeping consistent with past growth in the luxury real estate market, Calgary led the nation in terms of overall sales growth for properties worth over $1,000,000. Setting records throughout 10 of the past 12 months, 722 Calgary real estate properties worth over one million dollars were sold throughout the year.
This massive growth maintains the same trend as previous years, boasting an incredible 94% increase in sales year-over-year of attached luxury homes. Many experts are attributing this affluent market increase to the rise of interprovincial migration due to job opportunity in Calgary, as well as the rise of foreign investment in the city.
Housing Market Forecast For 2014 Is Promising, Calgary Sun
According to market analysts at the Calgary Real Estate Board, new home starts in the city are expected to be higher than in 2013, with single family home construction looking to increase by over 6,500 units. These starts will be comprised mostly of single family and multi family constructions, and will attempt to satisfy the current demand boom in the city, as real estate supply has been unable to keep up.
Resales within the city are suggested to increase by 3.6% in number of actual sales, while the estimated price increase for these Calgary properties will be on average 4.3%. Even outside of the city limits, residents will continue to invest, bringing the forecasted number of new starts outside of the city to ~30%.
Home Values Near Boom Levels Despite Flood Impact, Calgary Herald
Although a number of neighbourhoods in Calgary experienced a sharp decline in property value after the flood, analysts have found that home values outside of flood zones have risen by 6% since 2013, with a handful of regions experiencing even more fruitful gains.
The standard single family home in 2013 was valued at $410,000, while current Calgary properties values are being estimated at $430,000. This increase represents the highest pricing levels since the 2008 real estate boom, where detached houses were stated to be worth $447,500 on average.
Suggesting a potential recovery from the financial crisis hit, this change is a beacon of hope for home owners looking to sell within the coming year, or those eager to see higher returns than previous years allowed.
Developers & Calgary Officials Can't Agree On Future Land Supply, CREB
Urban developers are concerned that Calgary's land supply may run out by 2018. The Genstar Development Company states that city hall hasn't given approval for any new communities in the past number of years, leading to job layoffs and contract losses.
City officials offer a differing opinion, however, maintaining that they have a constant inventory of land available, which they are constantly adding to and using up. Officials claim they have enough land to supply at least 3 years of current growth, at a rate of 5,500 new lots being used each year, up to 5 years.
Meanwhile, while the Suburban Residential Growth 2013-2017 report forecasts a need for 38,320 new units developed in the next 5 years, the city believes that they can accommodate at least 32,000 of these units, though their inventory does fluctuate and is not set in stone.
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Ryan MacDonald, B.Sc. Real Estate Professional
Million Dollar Club Member
Top 1% Real Estate Professional in Calgary
O: 403.278.2900; F: 403.592.8008