To start off the year of predictions and forecasts, I attended the 2011 Housing Forecast seminar at the Shaw Conference center this morning. The seminar features a number of speakers that give us a peak into what may come in the upcoming year with regards to the economy and, of course, real estate. As you can imagine, this can be a tricky thing to do and many of these predictions strongly depend on a number of “ifs”, but these guys know better than I do with what’s to come. The overall message that I took from today was that things are on the up and up, with no significant booms or busts expected, and in the end “boring is good”, as Ian Glassford, CFO with Servus Credit Union states..

Natalie Wellings, a mortgage broker with Mortgage Success, attended the event with me and since she has done such a great job at summarizing what took place, I thought I would share what she had to say. You can view her summary below or view it on her blog by Clicking Here.

There are just a few additional things that I have added to her notes and I have included my points in the related sections below.

2011 Housing Forecast Seminar

“This morning I had the pleasure of attending the 2011 Housing Forecast Seminar at the Shaw Conference centre. I always look forward to this annual event as it helps to give me some sort of idea as to how the year ahead will unfold. Here is the Coles’ Notes overview of this morning’s presentation:

The Economy, Rates and Housing: In 20 Minutes or Less
Presented by: Ian Glassford, CFO of Servus Credit Union

"The Global Economy- will show a continued recovery in 2011 and a weak recovery for developed economies. This sector is volatile but overall positive. There is some concern about dependence on a few economies including China, India and Germany.

The Canadian Economy- the economy can perform better than forecasted if commodities hold on, rates stay low and the dollar doesn’t get too strong. However, the economy can only go so far until the US rebounds.

Interest rates in the short term (next year or so)- will show modest upward pressure. Expecting modest interest rate hikes to start late spring/early summer. In Ian’s opinion, rates that are too low for too long create irresponsible behaviour from borrowers. If the rates increase too much, this could stall the economy so the Government of Canada has to find a healthy balance.

Interest rates in the medium term (1 to 2 years out)- the rates are likely moving up. The Bank of Canada sees “considerable monetary stimulus in place” meaning they have their foot on the gas and are warning that eventually they must put the brakes on.

Housing- the year will likely be very “ho-hum”. I personally think this is great news as the last 5 years have been extremely volatile and that is not good for the housing market in the long term.”

Lisa:
One point that Ian mentioned, is that the opinion of the housing market is likely to change. We have been in a market where owning a home has been about making money and we are so concerned about whether we are going to “win or lose”. Instead he states that at the end of the day it is about Renting vs. Owning. You need somewhere to live no matter what and depending on what makes the most sense to you, this should be your focus.

Edmonton Economic & Housing Market Outlook
Presented by Richard Goatcher, Senior Market Analyst, CMHC Edmonton

“Richard gave an overview of the overall economy as well as the Edmonton housing market. He concluded that the job losses experienced during the recession have reversed in recent months, full-time job gains are slowly returning and that we will really see this significantly in 2012, he also stated that employment growth will return in 2011.

Richard’s graph on interest rates showed annual average interest rates slightly lower in 2011 than they were in 2009 & 2010. Still significantly less than they were during the boom years.

Edmonton residential MLS sales have cooled since the beginning of 2010 (no surprise here) and that many experts believe we’ll have an opposite kind of year with modest sales to start and stronger sales as the year progresses (I tend to agree with Richard on this). Richard also added that we are currently in a buyer’s market with only 1 in 5 listings sell in a given month.”

MLS System Market Forecast
Presented by Chris Mooney, REALTORS® Association of Edmonton

“Rural Recreational Forecast- lots of choice with long days on market. Gasoline prices will have an influence on the value of rural properties.
Forecast: slow & no change.

Commercial Forecast- the 2010 sales were up and could be up even higher if all REALTOR® sales were reported. Commercial clients generally seem optimistic.
Forecast: trend upwards with values over $300 million.

Multi-Family Forecast- the condo conversion trend is over (yay for that!), most multi-family sales will remain as rentals (I kind of disagree with this as lots of singles and child-free couples still choose condos), rents should creep upwards with little incentives for renters.
Forecast: low volume but steady

Residential Single Family Dwelling Forecast- the market will remain stable as long as external forces don’t intrude, steady as we go! Prices should rise 3% overall with seasonal fluctuations. Inventory up to 7,000 units in the spring and then normal thereafter.

Residential Condo Forecast- condo purchase is a lifestyle decision for singles (especially women), young couples and empty nesters. Most condos do not appeal to families. Newly completed condos will create pressure on re-sales.
Forecast: sales and prices to remain static”

Lisa:
Some other points that Chris mentioned are:

• Keep in mind when you see statistics released that real estate is local, and the sales in larger centres, such as Toronto and Vancouver, skew the national figures
• Edmonton’s housing market is considered to be “normal” and stable.
• Real estate purchases are for an investment in Quality of Life, not just an economic investment.

There was one more speaker that I wanted to bring attention to and it was for:

Development Trends
Presented by Patrick Shaver, Urban Development Institute

• The residential single family house, duplex or rowhouse is what the market wants
• The demand for higher density areas such as high employment areas, Urban Village suburbs and infill areas are appealing to younger people and empty nesters due to affordability and low maintenance.
• The capital region was set up 3 years ago and includes 24 municipalities around the Edmonton area
• Over the years there have been development density changes. For instance in 1970, Castle downs had 52 residents per net residential hectare. Where newer areas are experiencing 82 residents and upward per residential hectare.
• The most amount of growth in upcoming years is expected in the Southern area of Edmonton due to the amount of space available, while other areas outside of Edmonton will be appealing for development due to low costs associated.
• Growth will be due to localized demand, availability of services, diversity of housing, cost of services, attitude of the municipality and affordability
• Neighbourhood amenities such as schools, parks and natural areas are in demand. Along with constructed wetlands, park front lots, non-paved trails and LED street lighting.
• Development will be based on delivering on what people want
• Alberta & the Capital Region are positioned for success as there is opportunity, land availability, competition, affordability, creative & hardworking people
• “We don’t move here because of weather, we move here because of opportunities, and we stay because of the lifestyle”

A great conference as usual, with a wealth of information!  It will be interesting to see how the year unfolds in relation to the predictions that were presented today.  Let's hope that all the "if's" that are needed will be in place to keep us moving forward!