The Calgary housing market continues to show signs of a sustained recovery according to figures released January 3, 2010 by the Calgary Real Estate Board.
”The number of single family homes sold in December 2009 in the city of Calgary was up 78% from the same time a year ago, while condo sales saw an increase of 66% from the same time a year ago.”
“What a difference a year makes. Undoubtedly the recovery in Calgary’s housing market came sooner than expected this past year,” says Bonnie Wegerich, president of CREB®. “Pent up demand by first time buyers, record low mortgage rates and improved affordability have helped bolster the Calgary market in 2009.”
In fact, we are close to seeing a sellers’ market. With continued limited resale home supply and a robust buying public…the pendulum is swinging in favor of sellers which will, more than likely, push prices up.
There are also fears that interest rates are going to rise and this has buyers anxious to lock into more favorable rates now.
With the additional fear that the government may make 10% down payments mandatory and maximum 30 year amortization periods, we may see many buyers pushing their plans forward.
If you are thinking of purchasing a home, moving up or down sizing, now would be a most favorable time to do so and I would love to help you.
I was on my way to do a listing presentation tonight and was pulling up the statistics for April. What a month it has been did you know the inventory has shrunk from 5.6 months (worth of inventory) the end of March to 3.3 months now at the end of April. Northeast condos have the highest inventory versus sales and southeast single family homes have the lowest.
Dare I say that we are in a balanced market? You might be prone to say that but when you dig deeper what you find and it is certainly no surprise that Calgary has 2 very different markets at the moment. 57% of all sales for the past 30 days have been under $400,000 which is down from 68% the end of March. We are starting to see a movement come back to the $400,000 - $500,000 as people in the lower price ranges start selling their homes and buying ‘move up’ homes. $400,000 - $500,000 price range accounts for 23% of sales for the past 30 days. The second market of anything over $500,000 is still experiencing slow sales with only 20% of total sales. That being said aggressively priced homes are selling in the above $500,000 price category.
If you are priced to sell and are under $400,000 then there is a great market out there. Multiple offers are happening again in this price range to an extent. Dust is starting to settle and people are taking advantage of these unprecedented market conditions of low interest rates and well priced homes.
If you are thinking of selling prepare your house and have a strong marketing plan including pricing and the market will respond.
Please contact me if you have any questions about buying or selling in Calgary (403) 923-7237 or at homes@linahorner.com
Well here is a previous post that I managed to delete.
I am sure that we all have our eyes and ears open to what is happening with the world’s economy. Stock exchanges around the globe are experiencing historical drops, oil prices are tail spinning, world leaders are holding summits to try to get a handle on this snowballing economic crisis. Not to mention the all fearful ‘R’ word is becoming more and more prevalent. What does this mean for Calgary’s already suffering housing market?
I don’t have a crystal ball nor do I assume to know what is going to happen in this turbulent time. It is unlike anything that I have seen and from what I can gather it is even beginning to baffle the most renowned economists. What I can provide for you though is some insight to what has been happening in Calgary’s real estate market up until this point.
September 2008 vs. September 2007
The month end inventory for single family housingis down slightly from 2007 with a 3.15% decrease but the monthly listings added is significantly down from this time last year siting a 15.29% difference with the number of monthly sales up by 8.27%. The sales to listings ratio has increased by 10% September 2008 vs. September 2007. However, if we look at September 2008 compared to August 2008 we see another trend with listings on the rise, up 15.9%, while sales stagnated with only a 1.5% difference. Historically sales slow from August to September and inventory added rises.
The month end inventory for condos is up significantly from 2007 by 19% the number of listings added during the month was down 10% but sales were also down 3.73% compared to the same time last year. When we compare September to August the number of listings added has decreased by 9.8% with a 12.5% decrease in the total number of listings. Sales were also down by 6.1% in September from August.
Price Category break down
This is where I think people will see what is really going on out there in the market. Let’s look at what is happening in price ranges this year compared to last.
Single Family
- In the 200,000 - 299,999 price range we saw a double in the number of sales this year compared to last
- In the 300,000 - 349,999 price range we saw a 37% increase in the number of sales
- In the 350,000 - 399,999 price range we saw an 18% increase in the number of sales
- In the 400,000 - 449,999 price range things remained even to the same time last year
- In the 450,000 - 499,999 price range saw a 25% decrease in the number of sales
- For price categories up to $1,000,000 all showed decreased sales
- In the 1,000,000 and over price range it remained even to the same time last year
Condos
- In the 100,000 - 199,999 price range we saw a 150% increase in the number of sales
- In the 200,000 - 299,999 price range we saw a 23% increase in the number of sales
- In the 300,000 - 349,999 price range we saw a 67% decrease in the number of sales
- All categories up to 600,000 showed significant decrease in sales numbers
- In the 700,000 - 799,999 price range we saw a double in the number of sales
- In the 1,000,000 and over price range there is no sales compared to 4 sales last year
My thoughts on this . . . .
This is a basic supply and demand principle and it is not hard to understand with a substantial increase of inventory combined with a marginal decrease in demand it is the recipe for a buyers market. Prices will of course adjust accordingly it is something that simple economics dictates. Don’t be fooled by reports that the average home price in Calgary is going up. The numbers are clear that this is not the case. Averages can be dramatically skewed by the sale of a high end house if you look at the numbers closely you will see the real trend. Houses in the $400,000 - $1,000,000 range have been the hardest hit and prices in these categories have decreased by as much as 10-15%.
The burst of the bubble. . .
With prices climbing at recording breaking rates prior to 2007 it was only a matter of time until there was an affordability breaking point. A sustainable market growth for housing over time is around 5%. The inflationary growth is something that can be maintained however when the rate of growth is 20 - 30% year after year it won’t take long until the market needs to correct itself. In terms of affordability if the incomes aren’t rising to match the rise of the cost of housing then it of course cannot be sustained. However, the market is correcting and we are nearing a point where the correction will be in line with the sustainable 5% year after year growth. Calgary’s market will eventually start to plateau and the trend of September 2008 is a positive one when compared with 2007.
Investing . . .
With the turmoil of the stock markets and commodities real estate has been and remains one of the best long term investments. Real estate is a tangible asset that while in the short term can decrease in value over the long term it is a hard asset that will gain value. If the last week has shown us anything it is again reminding us of how risky stocks can be (I am not saying it is not a viable term of investing) you need to diversify. There are great deals to be had in Calgary’s real estate market right now.