I could see that we had an inventory crunch coming. I said it back in January, but we’re now finally hearing it in the media:
Global TV(Fri May 4): A lot of people are looking to buy, but realtors say there aren’t a lot of homes on the market right now.
Global Calgary | Calgary’s housing market bounces back.
Excerpt from the above story: “The minute a sign goes up a sold sign gets stuck right on the front of it and we’ve been victims of that in the past, where you wait too long and the house is sold.” -Dan and Barbara Mowat
A few statistics will drive the point home:
- Inventory is at 81% of it’s normal level at this time of year.
- Sales over the past 30 days are 32% higher than last year
- Over the past two days, 20 homes have sold for list price or higher(15% of total SFH sales)
- 55% of the homes listed in March already have a firm sale(last year it was 38%)
The first warning signs were posted on my website in January:
Jan 16, 2012(What’s new): Sales for the first 20 days of January are higher than any of the previous 3 years. New listings are lower than the previous 3 years.
I then wrote on Feb 12: Unless we see a flurry of new listings soon, we’re headed for an inventory shortage.
The median price of SFH has risen $32,250(8.2%) since the beginning of the year.
Yesterday, a bungalow in Wildwood which was listed for $399,900 sold for $452,900. It had an offer on the first day.
While I was warning of an inventory shortage, guys like Garth Turner(GreaterFool.ca) were warning of a glut:
“It’s not just poor deluded Calgary…January numbers will be ugly, as sales and prices slide while listings pop.”
Quite the pop. Year-to-date SFH new listings are down 5%.
Bob, what do you say about this really nice neighborhood called “Lakeview Village”? I’ve been watching and watching, since I would LOVE to live there one day…. but the homes have been sitting on market?
The lots are gigantic for inner city, they are 9000+ sqft. Maybe these sellers should just lower their prices already so I can buy….heh.
Patience. Four homes have sold this year in Lakeview Village, but every one had at least one price reduction, and the average DOM was 164(counting re-lists). Eventually the sellers figure it out. -Bob
This statement from the linked article has no merit:
“They say instead of taking two or three months to sell, properties are selling within 15 to 30 days, sometimes sooner.”
Days on Market is virtually the same as last year. Houses are taking the same amount of time to sell.
Absorption rate is increasing, but it is not always a reliable indicator. The absorption rate was even higher in 2009 and then very low in 2010. If absorption rate is a great indicator then 2010 should have been a stellar year.