My warnings last year of a looming inventory shortage have become reality and it’s an entrenched seller’s market. If you’re looking to sell your home, chances are good that you’ll have a bidding war from prospective buyers. In March, 34% of homes sold for list price or higher. That’s the highest it’s been since the insanity of 2006-2007. Call me for a free evaluation 403-650-2514.
For a more detailed summary of the month-end stats , go to my website
Record sales in July
Update Aug 1: The Financial Post Magazine contacted me today regarding a story they’re doing about the real estate market across Canada. The reporter was asking why Calgary was so different from other cities. I have my opinions which will eventually be published. What’s your take? (I had to chuckle when they asked about Garth Turner’s bad predictions for Calgary!)
How do you achieve record sales when there’s almost nothing to buy? Inventory is at its lowest point since 2006, so you know that attractive new listings are going fast. As we learned from the craziness of 2006 – 2007, a runaway market is no fun for anyone except a few sellers who are moving to cities where the prices are low or dropping. Many homes are sold by the time a buyer comes to view them. Sellers can realize a quick sale, but if they are moving up or across town, they have all the headaches of looking for a new home with all the difficulties and turmoil of an over-heated market. We require lots more inventory before things will settle down, and there is no sign of that happening.
First-time buyers were up 39% compared to the average of the past 3 years.
The sales-to-new-listings ratio at 80% is the highest it’s been since 2005. Homes under $500,000 are in huge demand, with an absorption rate of 1.1 in July. That is an entrenched seller’s market. Over the last four days of July, 15% of sales were for list price or higher. As Brad stated in his recent comment, Garth Turner looks very foolish for his dire predictions of a nosedive in Calgary’s sales. Be careful who you listen to.
A record high price was set in June for single-family homes. The average single-family home price hit $527,162, up 7.7 per cent from last year, and eclipsing May’s record of $521,887.
Inventory was low before the flood. It is now seriously low.
First time buyers were up 37% compared to the 3-year average, and up 8% compared to last year.
The Calgary Herald has reports of homes selling sight-unseen. “We have seen in the past week properties sell, sight unseen, for families that have lost their homes in the flooding…. It is shifting into a sellers’ market where buyers must buy immediately when a property enters the market or risk losing it to competing offers if they wait. The rental market is becoming non-existent so the families must purchase an alternative.”
Read more: Record month in Calgary real estate
Average and median prices reached an all-time high in May. A dramatic increase in first-time buyers bodes well for the move-up buyer and the long-term health of the market. For the last two days of May, 21% of homes sold for list price or higher, so bidding wars are still going strong. You can see a more comprehensive update on my Monthly stats update.
With inventory approaching the 3500 level, I’m hopeful we’ll see a moderation in prices and an end to the bidding wars for the remainder of the year.
From the Calgary Herald: Calgary housing market smashes records in May
A spike in new listings led to a dramatic rise in first-time buyers in April. Bidding wars are at their highest level in years. Over the past 3 days, 24% of homes sold for list price or higher. With new listings up 5%, I would have expected to see a drop in the median price, but the pent-up demand from buyers kept sales and prices up there. When 24% of homes are selling for list price or higher, you can be assured that inventory levels are not making for a healthy market. Let’s hope for a surge in new listings in May. You can see a more comprehensive update on my Monthly stats update.
The median price hit an all-time high for Calgary at $450,000 which obliterates the previous high of $439,000 set back in Jun 2007.
There’s an overwhelming demand for homes priced under $500,000 with only a 36-day supply of homes on the market. Last year in this price range, there was a 51-day supply.
Read more here Monthly stats update
Does the phenomenon of recency distort our views? How far back should you examine the numbers when considering housing data? From the Globe and Mail: Housing bears need to relax and take the long view.
Even with inventory down by 25%, sales were still up by 3.8% in Feb compared to the average of the past 3 years.
- The average price hit an all-time high for Calgary at $518,452 but it’s well-known that I put more credence in the median price, which hit an all-time high for Feb at $437,500. It’s still $1500 less than the record high of $439,000 in Jun 2007.
- First-time buyers were up 6.8% compared to last year.
A seller’s market
- There’s a huge demand for homes priced under $500,000 with an absorption rate of 1.3 which means there’s a 39-day supply of homes on the market. Last year in this price range, there was a 60-day supply.
- For homes priced above 500,000, there’s a 111-day supply.
- Bidding wars are going strong, with 17% of homes selling for list price or higher in the last four days of the month.
Read more here Monthly stats update
From the Calgary Herald: Calgary housing market sets all-time record
The following chart comes from Scotiabank. Read more Scotiabank Globalviews
Calgary and Edmonton were the only two cities to show an increase in sales in Sep 2012
Looking at the September statistics in isolation will not tell you the complete story. It still looks like we’ve got increasing sales along with an inventory shortage, while the median price is up:
The trend is your friend
More importantly, it appears from the table below that we will see decreased sales in October if the trend continues. We’ve had eight consecutive months of sales increases, but I predict that will come to an end next month. What’s the reason for the imminent sales drop? We’ve had sales increases despite extremely low inventory. Is the long-awaited correction finally going to hit Calgary, or is it that buyers have finally run out of homes to purchase?