CREB Member Forecast Presentation

Q4-20 CREB Zoom forecast meeting. Ann-Marie Lurie presentation, Calgary Real Estate Board chief economist.

Cole's Notes:
CREB Member's Forecast meeting.  Q4 20

We have more data now about Covid.   1:30

Jumped back from desperation to 200k Alberta jobs lost. 2:00

Alberta is impacted more than the rest of Cannada   2:57

In Alberta Lethbridge & Medicine Hat are the best markets because they are not as dependent on energy sector jobs.  5:20

Analysts are saying markets could go down by as much as 20%.   6:10
We have not dropped as
 much as Ann Marie expected because supply has dropped off in balance to sales.  6:45

Activity is not as bad as what was expected.    8:20

If things don't change the economic fundamentals will continue to weigh on our market.  8:50

August this year was similar to August of 2019 although last year was fairly down.  9:15

In some ways our supply/sales adjusted numbers are (at this point) better than pre-Covid. 11:10
We have a market that is temporarily better than what we expected. Prices are solidifying and in fact going up.
11:55

Most of the improvement is solely in the detached single-family sector. 12:35

The apartment condo market is off the charts.
13:05

Covid has caused the Calgary detached market to become balanced. 13:25

As commute times become less of a factor due to Covid satellite towns are seeing an upswing.  14:40

While we are seeing market stabilization it is dependent on  which segment of the market you are talking about. 15:40

While the detached market has a long way to go to get back to the 2014 market we are beginning to see a trend reversal due to pent up demand of Covid-19.  16:30

The apartment market is seeing a price adjustment of 18% since 2014. 17:00

Market trends are different depending on the sector or market zone you are in.  18:10

The city center and west zones are seeing the least amount of market resilience. Partly because these tend to be the most expensive areas. 19:05

The lower end of the detached market surprisingly has seen somewhat of an upswing during Covid -19 shut downs. 20:30

The lower priced homes are selling well. They are limited by supply more than buying activity. 21:10

Upper price ranges( $600k plus) are seeing price declines. 21:30


The $500 to $700 range is seeing a reduction in the absorption rate. 22:15

Other regions in Canada have seen record high real estate sales prices. Calgary is not experiencing that because our job losses are more focused in the energy sector. 23:40

We were just starting to get back and now they weigh on our market again.  25:35

The market pressure that we are seeing on the top end of our market will persist. 25:45

Higher density product has been the most challenged market sector. This is partly due to new product keeping inventory high. 28:55

Alberta's economy is expected decline by 8.7%. Making it one of the worst recessions that we've seen. 29:43

 Oil prices are expected to remain low with the optimistic projection of energy industry recovery being 2022. 31:37

western Canada Select is down 27% - Active rigs -66% - Oil production -12%  32:08

Provincial migration numbers are not nearly as negative as the early 1980s recession. Migration is a determinant of real estate market buoyancy. If migration levels hold, we should not see as dire a housing market as we did then. This is yet to be seen. 33:32

Alberta employment forecast are better than it was earlier. Job loss expectations are to be in the 135,000 range of jobs lost in 2020.  36:45

Employment recovery is not anticipated until 2023. 37:00

Unemployment in Calgary is expected to remain over 10% for the next two years. 37:22

If the current rate of unemployment is sustained over a long period, we could see percentage price adjustments similar to the early 1980s. 38:40

In the 1980s it took several years for prices to reach bottom. 39:55

In 2020 many of the jobs that have been bolstering the numbers have been part time positions. 40:55

The economy was forecast to be worse off than it is. That has been primarily due to the significant amount of government support. 41:52

 The concern is that once CREB and EI benefits and mortgage deferrals stop there will be an increase of defaults leading to supply gains. 42:51

Low interest rates are helping to buoy up the market. 44:37

Considering the employment numbers there is a significant amount of downside risk. 44:48


Question period. 46:15
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