Sylvan Lake Weekly Market Update – July 28/10

Thu, 29 Jul by Dale Russell

Market Update to July 28/10 – Sylvan Lake & Area

 

Active Listings

Sales

Price Range

Active Today

Pending

Active 1 Year Ago

Sold MTD

July 21/10

Sold MTD

July 28/10

Sold MTD

July 28/09

0 – 100

2

0

5

0

0

0

100 – 150

6

0

11

1

1

2

150 – 200

19

0

14

0

0

1

200 – 225

9

0

6

3

3

3

225 – 250

14

0

8

1

1

1

250 – 275

22

1

20

2

3

7

275 – 300

25

1

28

6

6

2

300 – 350

30

0

31

8

10

10

350 – 400

42

0

27

2

2

6

400 – 450

24

0

15

0

0

2

450 – 500

17

0

24

0

2

1

500 +

76

3

76

1

1

2

Total

286

5

265

24

29

37

Days On Market

80

82

57

53

58

Market Update – The article below indicates that Consumer Confidence in Canada is low right now which nicely explains why the housing market is a little slow.  “Consumers are sitting on their wallets” is the term used.

 

The article says that Canadians are worried about the future but really doesn’t say why, except that we have been hearing an undercurrent of bad news in the media.  We shouldn’t be surprised that the media is full of negativity.  That’s nothing new.

 

There’s an old adage that says that 90% of what we worry about never happens.  We all know that the smart investors are the ones who do the opposite of everyone else.  They buy when the market is down and sell when it’s up.

 

Smart homeowners should pay attention!  The real estate market is down and opportunity abounds.  There has never been a larger selection of homes available to choose from.  Prices are the lowest they’ve been in three years and interest rates are unbelievably low relative to the past 30 years – five year mortgage money is available for about 4%!

 

Ask anyone and they will tell you the slow economy won’t last forever.  When it turns the corner, the opportunities will very quickly disappear.  Why is it we have to wait until it’s too late?

 

Financial Post · Friday, Jul. 16, 2010  – OTTAWA — Lingering concerns over Canada’s long-term economic performance are stifling chances of a sustained consumer-led recovery, according to a monthly national survey released Friday.

 

“Canadians are worried and wary when it comes to Canada’s economic future,” said Michael Antecol, vice-president of TNS Canadian Facts, a marketing and research group. “Indeed, worries about the future have only intensified in the last month. . . . The question has to be: is it eventually going to sink the recovery?”

 

TNS said its overall consumer confidence index dropped 4.5 points in July from 98.9 the previous month.

 

The group’s expectations index — a measure of how consumers see the economy, household income and employment in six months —declined for the fourth straight month. It lost 1.6 points in July, falling to 104.2 —the lowest level since July 2009.

 

The buy index, which monitors views on whether now is a good time to make major purchases, dropped 9.3 points to 87.7 —the lowest point since January 2009.

 

Also down in July was TSN’s present situation index, which tracks sentiment about the overall state of the economy and the labour market. It fell 3.2 points to 92.1, reversing recent monthly increases.

 

“Its not that there hasn’t been good short-term economic news lately. But there is also an undercurrent of bad news filtering through the media,” said Antecol.

 

“All this negative news is acting like an undertow, pulling down consumers’ economic confidence. Until those positive short-term developments inspire future-oriented confidence, the chances of a sustained economic recovery will keep receding into the horizon.”

Antecol added: “Consumers will simply keep sitting on their wallets.”

 

TNS said it polled 1,015 Canadians between July 5 and 8. The survey’s margin of error is plus or minus 3.1 percentage points, 19 times out of 20.

Sylvan Lake Weekly Market Update – July 21/10

Fri, 23 Jul by Dale Russell

 

Market Update to July 21/10 – Sylvan Lake & Area

 

Active Listings

Sales

Price Range

Active Today

Pending

Active 1 Year Ago

Sold MTD

July 14/10

Sold MTD

July 21/10

Sold MTD

July 21/09

0 – 100

2

0

4

0

0

0

100 – 150

6

0

12

1

1

2

150 – 200

19

0

15

0

0

0

200 – 225

8

0

5

1

3

3

225 – 250

13

0

8

1

1

1

250 – 275

21

1

19

0

2

6

275 – 300

25

2

28

4

6

2

300 – 350

32

2

31

4

8

10

350 – 400

42

0

28

1

2

5

400 – 450

26

0

16

0

0

0

450 – 500

19

0

26

0

0

0

500 +

74

2

75

1

1

2

Total

287

7

267

13

24

31

Days On Market

75

81

51

57

58

The Exchange Rate and Inflation – The fear of deflation in the US appears to be on the rise once again. It’s rooted in the fear that private spending hasn’t yet strengthened sufficiently to offset a substantial reduction in stimulus spending (support for which is waning). At the same time there’s rising concern over the trade imbalance between China and the US. The link between the two, however, hasn’t really been discussed.

 

Deflation fears are rooted in the fear that reduced spending will further decrease capacity utilization (i.e., more factories will be idled more often). The increase in hungry firms, combined with a paucity of buyers, results in a possibility of general price declines. In isolated North Korea, this would be the end of the story, but for countries that are open to trade then consumer prices depend on another factor: the price of imported goods.

 

This channel of inflation is known as the exchange rate pass through. Its name reflects the fact that imported goods and services need to be purchased in a foreign currency, making the exchange rate vitally important. If the price of the foreign currency increases then so does the price of the goods and services that country produces, relative to the importing country, all else equal.

 

For instance, in the early 90s another North American country had a severe trade imbalance: Mexico. The Mexican central bank was maintaining the value of its currency artificially high vis-à-vis the US dollar. It simply wasn’t sustainable and devaluation followed.

 

Notwithstanding the fact that the local economy was in shambles, inflation soared from about 7% to 35% between 1994 and 1995. Why? One reason was due to the fact that imported goods became incredibly expensive overnight when their currency collapsed. This, of course, is an extreme example, but it illustrates the point.

 

Earlier this decade, between 2000 and 2005, the exchange rate pass through to inflation was a topic high on the radar screen for researchers at the US Federal Reserve Board and the Bank of Canada. Researchers were finding that this channel was becoming very weak. That is to say, exchange rate movements weren’t impacting import prices to the same extent that they were in the ‘80s.

 

What was the general consensus explaining the reduction? One explanation given was related to the change in the mid-‘90s by developed countries to implement a fixed inflation target. According to Professor John Taylor at Stanford, this change lowered the relative power of sellers relative to consumers, lowering their ability to pass increased costs on to customers. Another explanation, associated with Mario Marazzi work at the Federal Reserve, was that there was a fundamental shift that occurred in the economy, with the share of goods and services that are less sensitive to exchange rate changes dramatically increasing their share of imports.

 

A final rationale, also from Mario Marazzi body of work, highlights the important impact of China and its decision to peg its currency to the US dollar. Chinese exporters are effectively shielded from any exchange rate movement. Exporters from other foreign countries are cognizant of this fact and must compete for access with the US market with China, making them less likely to change their prices in response to exchange rate fluctuations.

 

The timing is fairly good for the US for it to fix its trade imbalance. Efforts to fix the US trade deficit with China will no doubt revolve around the latter’s policy of fixing its exchange rate with that of the $US and making Chinese imports more expensive, while at the same time making US exports cheaper.

 

The US economy could sure use the boost in demand and at the same time could easily handle any related price inflation (we’d expect that the exchange rate pass through channel will strengthen the larger the movement in the currency). The trick will be in making sure the shift is controlled and not a stampede, the risk of which is pretty low given the Chinese inherent preference for stability.

Sylvan Lake Weekly Market Update – July 14/10

Fri, 16 Jul by Dale Russell

Market Update to July 14/10 – Sylvan Lake & Area

 

Active Listings

Sales

Price Range

Active Today

Pending

Active 1 Year Ago

Sold MTD

July 7/10

Sold MTD

July 14/10

Sold MTD

July 14/09

0 – 100

1

0

5

0

0

0

100 – 150

6

0

13

1

1

2

150 – 200

16

0

13

0

0

0

200 – 225

10

1

6

0

1

2

225 – 250

10

0

8

1

1

0

250 – 275

22

3

19

0

0

5

275 – 300

29

2

27

3

4

2

300 – 350

30

3

25

1

4

9

350 – 400

42

2

27

1

1

3

400 – 450

26

0

13

0

0

0

450 – 500

20

0

24

0

0

0

500 +

73

1

74

0

1

1

Total

285

12

254

7

13

24

Days On Market

75

81

42

51

45

·         ATB Financial – Weekly Bulletin – July 10 – Residential developers in Alberta started construction on 24,900 homes in June 2010, a drop of 1,800 compared to the month previous but well ahead of the pace one year ago when builders started only 17,800 homes. All figures have been seasonally adjusted and annualized, which means it is the number of homes that would be built during the year if construction continued as it did for the month. This was the second consecutive month of declining housing starts in Alberta, confirming that the mood has cooled in the residential construction sector after a fairly strong period in late 2009 and early 2010.

 

Drilling down by region, it appears that multi-family construction (includes condominiums, duplexes and town houses) in Edmonton bore the brunt of the provincial drop in housing starts. However, housing starts have been much stronger in Edmonton than Calgary over the last few months, so even though starts in Edmonton slipped from the month before they are still higher than in Calgary.

 

Moving forward, it is very likely that housing starts will continue to stay subdued compared to the beginning of the year. So far in 2010, housing starts have averaged 26,700 units, which is much stronger than during 2009 which saw fewer than 20,000 new home starts.  However, it’s still well below the pace of 2006 and 2007 when over 40,000 new homes were started.

 

·         Local Market Comment – The central Alberta market is a reflection of what is happening in the rest of the province.  The reason new housing starts are slowing is because we haven’t had the population growth to sustain the pace we were on.

 

The reason we haven’t had population growth is because we had negative job growth in the last two quarters of 2009 and only a very small net gain in the first quarter of 2010.  There were a lot of jobs created in Canada in the last quarter but almost all of them were in Ontario and Quebec.  For the first time in years, Alberta has been lagging behind the rest of the country when it comes to job growth.

 

The reason we haven’t had job growth here is because there has been low demand for commodities in the world wide economic slowdown we have been experiencing for the past two years.  It’s never quite that simple though.  There are other factors that have had an effect on our local economy.  As an example, the Alberta Provincial Royalty review and subsequent changes to the oil and natural gas royalty structure caused jobs and workers to move to Saskatchewan and B.C.

 

There are some positive signs that job creation in Alberta may be on the upswing. Well licences are up over last year, oil and gas land lease sales are up over last year, there are more drilling rigs working than at this time last year and well completions are up over last year.  All very positive signs of recovery in the energy sector and when the energy sector recovers in Alberta, everything else follows behind.

 

Red Deer

Sylvan Lake

Lacombe

Ponoka

Blackfalds

Central AB

Sales June 2009

213

45

20

15

11

457

Sales June 2010

133

38

18

10

5

308

% Change

-37.65%

-15.56

-10%

-33.33%

-54.55%

-32.6%

YTD Sales 2009

887

152

84

61

61

1819

YTD Sales 2010

760

162

102

42

75

1599

% Change

-14.32%

+6.58%

+21.43%

-31.15%

+22.95%

-12.09%

Active Listings July 1/09

585

256

119

109

61

3364

Active Listings July 1/10

815

270

121

106

96

4207

% Change

+39.32%

+5.47%

+1.68%

-2.75%

+57.38

+25.06%

Median Price 09

$282,900

$310,000

$273,500

$222,000

$269,900

$277,000

Median Price 10

$292,500

$308,000

$259,500

$219,500

$278,500

$284,500

% Change

+3.39%

-0.65%

-4.97%

-1.13%

+3.19%

+2.71%

 

 

 

 

 

 Sylvan Lake Stats - June 2010

Sylvan Lake Weekly Market Update – July 7/10

Fri, 09 Jul by Dale Russell

Market Update to July 7/10 – Sylvan Lake & Area

 

Active Listings

Sales

Price Range

Active Today

Pending

Active 1 Year Ago

Sold MTD

June 30/10

Sold MTD

July 7/10

Sold MTD

July 7/09

0 – 100

1

0

5

1

0

0

100 – 150

6

0

11

3

1

1

150 – 200

16

0

11

3

0

0

200 – 225

11

2

6

5

0

2

225 – 250

9

0

11

0

1

0

250 – 275

17

2

22

4

0

2

275 – 300

29

2

31

3

3

1

300 – 350

31

3

29

8

1

2

350 – 400

39

2

36

3

1

2

400 – 450

28

0

16

3

0

0

450 – 500

19

0

21

0

0

0

500 +

75

1

74

5

0

1

Total

281

12

273

38

7

11

Days On Market

71

84

59

42

52

Central Alberta Market Update

 

Red Deer

Sylvan Lake

Lacombe

Ponoka

Blackfalds

Central AB

Sales June 2009

213

38

20

15

11

457

Sales June 2010

133

45

18

10

5

308

% Change

-37.65%

+18.42%

-10%

-33.33%

-54.55%

-32.6%

YTD Sales 2009

887

152

84

61

61

1819

YTD Sales 2010

760

162

102

42

75

1599

% Change

-14.32%

+6.58%

+21.43%

-31.15%

+22.95%

-12.09%

Active Listings July 1/09

585

256

119

109

61

3364

Active Listings July 1/10

815

270

121

106

96

4207

% Change

+39.32%

+5.47%

+1.68%

-2.75%

+57.38

+25.06%

Median Price 09

$282,900

$310,000

$273,500

$222,000

$269,900

$277,000

Median Price 10

$292,500

$308,000

$259,500

$219,500

$278,500

$284,500

% Change

+3.39%

-0.65%

-4.97%

-1.13%

+3.19%

+2.71%

 

 

 

 

Canada’s Economy Stalls in April – Dan Sumner – Economist, ATB Financial – June 30, 2010

 

The Canadian economy has been the golden child of developed nations during the last half year or so, but according to a Statistics Canada report released this morning, Canadian economic output stagnated in April.

 

Following seven consecutive months of very strong growth, Canadian gross domestic product (GDP) was unchanged in April 2010. GDP is a measurement of how much goods and services an economy produces, from the extraction of oil from Alberta’s oilsands to legal advice provided by a lawyer, the more stuff that an economy produces the richer a country is considered to be.

 

After the 2008/09 recession, Canada’s GDP rebounded very strongly, driven partly by strong gains in consumer spending which propped up GDP in areas like retail sales and the housing market. However, recently consumers have stopped to catch their breath and this is weighing on Canada’s overall economic growth.

 

Despite the stagnation in total Canadian GDP, output in Canada’s mining and oil and gas extraction sector, which is concentrated in Alberta, advanced by 0.5% in April. Statistics Canada noted that this was due to increased production of oil and oil services, while GDP from natural gas extraction shrank during the month.

 

The weak reading on Canadian GDP rounds out a host of other indicators which all show that Canada’s economy stalled during the second quarter, including manufacturing shipments, retail sales and housing market indicators.

 

Although Canada’s economy was largely expected to cool in the second half of the year it seems to be happening faster than many economists anticipated. While it is still far too early to say that the recent weakness is the beginning of a trend, economists will be closely watching these economic indicators moving forward.

Sylvan Lake Stats - June 2010

Sylvan Lake Weekly Market Update – June 23/10

Tue, 06 Jul by Dale Russell

Market Update to June 23/10 – Sylvan Lake & Area

 

Active Listings

Sales

Price Range

Active Today

Pending

Active 1 Year Ago

Sold MTD

June 16/10

Sold MTD

June 23/10

Sold MTD

June 23/09

0 – 100

2

0

5

0

0

1

100 – 150

8

1

11

1

2

3

150 – 200

12

0

13

2

3

1

200 – 225

11

1

4

3

4

0

225 – 250

11

0

16

0

0

3

250 – 275

16

1

23

3

4

4

275 – 300

28

1

30

3

3

2

300 – 350

29

3

33

6

7

13

350 – 400

32

2

42

0

1

4

400 – 450

30

0

16

1

3

1

450 – 500

15

0

19

0

0

0

500 +

75

2

73

3

4

2

Total

269

11

285

22

31

34

Days On Market

72

80

65

62

66

Last week we said that in order to see a change in our housing market, we need population growth.  In order to have population growth we need jobs and the place we’re currently lacking jobs is the energy sector.  According to this news article, the jobs will soon appear.

 

Energy sector short 24,000 workers by 2014 – By: Lauren Krugel – Winnipeg Free Press

 

CALGARY — Energy firms should build talent within their own ranks before the next labour crunch hits rather than look outside when they’re in the midst of a shortage, a human resources consultant said in a report Monday.

 

Many in Alberta’s oilpatch adopted a “buy talent” strategy during the boom times between 2006 and 2007, scrambling to fill jobs with workers from across Canada and abroad. Salaries and wages spiralled out of control as energy firms vied against one another for labour.

 

“I think if you talk to HR executives in the energy sector, they’ll tell you they don’t want to go back to that,” said Stephen Doitte, Mercer’s talent management consulting leader for Canada.

 

Assuming employment demand grows by four per cent annually, Mercer predicts the energy sector will be short some 24,000 workers by 2014.

 

The survey of 135 oil, natural gas and utility companies included permanent jobs across all job types, from tradespeople to engineers.

 

A study by the Petroleum Human Resources Council of Canada found the sector would need 100,000 workers by 2020 to support oil and gas activity.

 

Demographics are not working in the energy sector’s favour, Mercer said.  The bulk of the workforce consists of baby boomers, many of whom are nearing retirement. Another large chunk includes workers in their 20s and early 30s, known as Gen Y.

 

“The energy and resources sector in Canada basically skipped a generation,” Diotte said. “As the baby boomers retire, there’s a big gap in knowledge and skill and experience between those that are leaving and the ones that are coming in behind.”

 

That means companies should tailor their programs to suit the needs of each group, rather than adopting a one-size-fits-all approach.  — The Canadian Press

 Sylvan Lake Stats - June 2010