Condo Values in Hidden Valley and Hanson Ranch

Welcome to 2013!

Last year was a robust year in real estate in Calgary, and according to the media great gains were made throughout the city in all sectors. I thought I would try to make some sense all of the hoopla and give us a realistic view of what happened in our neck of the woods with condo sales in Hanson Ranch and Hidden Valley.

Before I analyze these communities, I will make a few points regarding general sales and inventory of townhouse condo statistics for all of Calgary Metro. On the low end of the spectrum, in 2011 there were FIVE properties that sold for under $100k, whereas last year there were no sales in that low price category. It is interesting to note that there is one townhouse condo listed for $79,750 today (it is a former grow op). So we will dip down into that price category again this year. On the opposite side of the spectrum, there were 14 sales over a million dollars in 2011 and that number decreased last year to 11, perhaps that is an indication that the range of pricing actually became a bit tighter.

The price category that I am most interested in reviewing here includes condo townhomes that sold between $200k and $350k, within the sales range in Hidden Valley and Hanson Ranch over the past couple of years. The growth in this category increased about 16% in volume from 2011 to 2012, slightly above the total increase in sales volume of 14% for all categories.  It is prudent to note that although we saw a total volume growth of 14%, the average sales price only increased by 2% in 2012.

Now let’s look specifically at Hidden Valley condo sales. In 2011, there were seven sales and the average price was $251,742. Our sales increased in 2012 with 11 firm sales, however, our average price actually dropped to $242,727, a decrease of 4%. That is a huge contrast to the overall trend in Calgary.

Hanson Ranch also increased its sales from 18 in 2011 to 23 last year. Similar to Hidden Valley, the average price also decreased from $299,916 in 2011 to $291,950 last year , a decrease of 3%. I’m sure that many in the area have noticed a decrease in their City of Calgary Property Assessment that were mailed out last week, I’m sure the City has taken this into account in the assessment of the area.

You are probably wondering at this point why this area is trending against the growth that the rest of the City is seemingly showing, and I believe there are a variety of contributing factors to this trend.

Firstly, there were some changes to the mortgage rules that may have affected the affordability for many first time homebuyers, many of which are looking in this price range. This has certainly contributed to a decrease of new homebuyers in the market, and that in turn will negatively affect sales in the medium and lower price categories. If that is true, then why do we see an increase in the general sales across the city, yet we see a decrease in this area? There may be a variety of reasons for this, and one is location with relation to the City Centre and public transportation. I’m sure after deeper analysis of sales across the city we would see that proximity to both of these locations will factor greatly into the decision making process. Do have a look through my last Blog "City Centre Development Driving Our Market" for further perspective on this.

Also of note are “new home sales”. Last year about 7% of the sales of condo ownership of attached homes , duplexes, and townhouses in Calgary were new builds, average price for these new home sales on the MLS was around $367k. In contrast, the average sales price for the remaining sales was closer to $316k, a difference of over $50k – a whopping 14% differential. Hidden Valley and Hanson Ranch have not had a new condo project in over a decade, whereas many of the adjacent communities are still building and developing, contributing to higher price growth. We could certainly go on and on about the attributes of an established neighbourhood (with schools!) and loads of green space, however, many buyers will prefer a new home and are willing to pay a premium for that.

The good news is there are only three active condominium listings in Hanson Ranch, and no Hidden Valley listings as of today. Inventory is extremely low and that may contribute to stronger equity growth. Keep in mind that this is typically a very slow time of the year for both new listings and sales. I would suggest we will see sales and inventory increase substantially as we move toward the spring and warmer weather.