Real Estate Forecasts and Loving Your Job
By Danielle Rourke
Ann-Marie Lurie loves her job. I mean she really truly loves her job. It’s one of those phrases so many of us strive to truly feel. With 11 years of working as chief economist for CREB under her belt, Ann-Marie is no stranger to forecasting real estate. And she adores every minute of it. Many of you may know her as a popular CREB forecast speaker, this year recent presentation being no different. I had the pleasure of speaking with Ann-Marie, a born and raised Calgarian, uncovering a little more about her, and about what she sees in our future for 2022.
While studying at U of C, Ann-Marie originally planned on becoming an accountant. With the encouragement of several professors, she was drawn into the world of economics. Ann-Marie quickly discovered she thrived here. There was no turning back. This is where her analytic real estate journey began. From the pension assessment company in Edmonton, onto CHMC doing analysis and underwriting, over to Colliers International, she ended up where she remains today, at CREB.
Three years ago, this working mom Ann-Marie’s role grew from the economic analysis of Calgary, to the entire provincial analysis, and most recently, expanding to that of Saskatchewan. Thus, she shares her expertise and time between CREB, AREA and SRA.
Now let’s get to the facts. Generally speaking, Ann-Marie shares that mostly every area of Alberta hit record sales last year. Prices improved and hit new highs. On the whole, the low lending rates prevalent in the market during the pandemic benefited the housing market. Looking forward, regional differences will be related to what the economic recovery looks like in each place, and what will drive this economic recovery. For the most part, all centers should likely see improvements in their job markets.
The first of Ann-Marie’s top 3 macroeconomic factors to watch for in the housing forecast for 2022 is obvious. Supply. Calgary has seemingly had a sudden increase in demand for sales. Ann-Marie shares this could very likely be the result pent up pandemic demand, and partly uncertainty about what was leading up to the energy sector. It’s hard not to notice the historic housing demand currently in progress.
Ann-Marie’s Calgary forecast considers the following:
1. Supply Changes. One area where supply increase will ideally occur, will be the new home sector. She explains that Calgary has less land restrictions than other centers. This is helping meet the new home market demand. As we see construction levels improve, it’s adding to the overall supply. Although new home builds began to improve last year, they took much longer to complete. They came in at much higher prices, and there were other delays for various reasons. Thus year, this sector should offset the high demand, low inventory impact. Factoring in this sector, must consider when these products will be available on the market, and when they can be added to the supply.
2. The employment market. Ann-Marie explains that we always have to consider what is happening in the employment market. This is an area where Calgary has had positive growth in the tech and professional development services; both tending to be higher paid industries. We must all keep our eyes on improvements to other sectors, as the Covid restrictions ideally ease. Further growth is expected in other higher paid industries, including the energy sector, all of which is fabulous for the future growth of our housing market.
3. Interest Rates. Low rates are what drew both seasoned and new buyers into the market. Ann-Marie’s opinion is that there is no doubt we will see an increase in the interest rates this year. Other forecasts will disagree, but in Ann-Marie’s view, it’s not a mater of if, but when. The general expectation is that we will begin to see a gradual 1% rise in rates to occur gradually over the year. This will further encourage and support the current demand for housing today, as buyers want to get in prior to this projected increase. She points out the important difference between the posted rate and the discount rate. This ‘discount rate’ is what aided so many people to get into the market when they did, however some lenders are already seen this rate moving up.
Although Ann-Marie has never sold a home, I asked the highly experienced economist on her advice for agents during these tight market conditions. Ann-Marie realizes it is a challenge to say the least. It’s obvious we went from a buyers market to an extremely strong sellers market rather rapidly. She understands the competition of obtaining the affordable detached product, and that facing multiple offers is common. If there is any advice that she can share, it’s this:
1. Make sure agents are representing buyers who are prepared, who know exactly what they can afford and have a good understanding about what their long term goals are.
2. Understand the Market. As she explains, “Very different things are happening. For example, what is happening in the apartment/condo market is not the same tight conditions as in the single family detached homes. Clients need to be educated about the fact that the price games are not as strong within the condo/apartment sector. There isn’t the same supply challenges within the condo/apartment sector, – clients need to be made aware of these things.” Ann Marie shares that there has been an oversupply in this sector for the better part of 5-6 years now. 2021 was the first time price changes improved in the condo sector. Members need to inform clients about the differences within the market. There are overall market conditions, but many differences between property types, location and price range, so a member will have a very different experience based on what their client is looking for, and/or on what they are selling. So, an important consideration is to clarify those expectations. Lower priced homes are very different from higher priced.
The overall prospective from Ann-Marie is that Calgary is becoming attractive to home buyers again. The third quarter of 2021 saw many migrations from Ontario to Alberta and international migration is starting to come back. This is good news.
As she explains, “Migration is key to future growth, so it’s very important to see that turning around for Alberta. We are one of the largest cities of Canada and our prices are far lower than the other big city markets of Vancouver, Victoria, Toronto, Montreal, etc. Calgary’s single-family detached benchmark comparisons to other big cities, adds to the attractiveness and affordability of buying a home here in Calgary. A benefit in the long term for 2022.”
Ann-Marie enjoys working on the forecast materials for CREB members, ensuring that they are comprehensive and informative, and Ann-Marie most certainly won’t be leaving CREB anytime soon. When asked what she likes most about working for CREB, she replies that it’s the same things she strives to instill as a leader. “I love the fact that they let me do it how I think it should be done. They give me a lot of flexibility. They provide me with a great balance of not just work and personal life, but also creative flexibility to carry out things the way I think that they should develop. This is probably the main reason I have been here with CREB all these years.” We will continue to follow Ann-Marie and her forecasts through 2022 and beyond.
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