Some welcome changes are occurring in the Calgary housing market. It’s been a long time since buyers had the upper hand, and it’s also been a long time since buyers had a good selection of homes from which to choose.
Bidding wars are almost a thing of the past with only 9% of homes selling for list price or higher in January. It takes about six months for the realities of the market to hit home with most sellers and that’s why you haven’t yet seen a corresponding drop in prices yet.
“Two consecutive years of relatively strong employment and population growth, combined with rising wages and low lending rates, have supported demand growth in our housing sector,” said CREB® chief economist Ann-Marie Lurie.
“All citywide resale segments have recorded a moderate easing of supply constraints, which should help stabilize prices as we approach the end of the calendar year,” said Lurie. “Nonetheless, consumers should be aware that market conditions can vary significantly depending on the location and property type.”
In Oct, 16% of homes sold for list price or higher.
More home owners have been motivated to list their homes and reap the rewards of the recent price increase. As a result, new listings are up slightly for the sixth consecutive month.
For September, 17% of sales were for list price or higher. If you bought an average house 12 months ago, it has increased in value by $38,750.
Calgary continues to experience a shortage of inventory with 17% fewer listings than normal for this time of year. There is only a 60-day supply of single family homes on the market. In the lower price ranges, it’s even more severe. For homes priced under $500,000, there is only a 42-day supply.
Despite the shortage of listings, it was the third-best August ever for SFH sales(second-best for overall sales due to strong condo sales).
If you had any doubts about the lack of inventory, bidding wars are still going strong with 18% of sales for list price or higher.
If you bought an average home in Calgary in Aug 2013, the price has increased $29,100 in the past year.
As always in the summer, the price dropped slightly in July. Sales activity is still strong, and more homes are being listed compared to historical averages. Inventory is still low. 19% of homes sold for list price or higher.
If you bought an average home in Calgary in July 2013, the price has increased $29,000 in the past year.
Slightly better conditions for buyers in June
- More homes are being listed
- Bidding wars have eased, but are still commonplace.
- 26% of homes sold for list price or higher in June.
- The average amount paid over list price was $6,417.
- The median price did not increase
- Average DOM(days-on-market) increased by 2 days
- Inventory is almost up to last year’s level
- The trend is your friend: The sales-to-new-listings trend is decreasing. Last year it was increasing.
If you bought an average home in Calgary in June 2013, the price has increased $40,000 in the past year.
It’s enlightening to look back and see what the experts were predicting about Calgary real estate immediately after last June’s flooding. One got it right, one got it wrong. Mike has the details on his blog http://calgaryrealestatereview.com/2014/06/08/june-1-7-2014-calgary-real-estate-statistics-trends/
Market update for May 2014
If you bought an average-priced house in May last year, you’ve just made a profit of $37,000. The median price has risen from $453,000 in 2013 to $490,000 today. If you bought at the previous peak in 2007, you’re now up $55,000.
With 31% of homes selling for list price or higher, it’s still a frenzied market for buyers, but a sign of hope: new listings are up by 12%.
For a more detailed summary of the month-end stats , go to my website
The Conference Board of Canada rates the Alberta, Saskatchewan, and Newfoundland economies as the best in the world. Canada’s overall economy comes in at #5 when compared to other countries. “Alberta, Saskatchewan, and Newfoundland and Labrador are “A+” economies—they rank higher than any advanced country in our analysis,” said Glen Hodgson, Senior Vice-President and Chief Economist. “Rising income in these provinces has led to higher consumer spending, which has boosted the services sector and real estate activity.”
Read more Resource-rich provinces earn top grade.
What are the implications for the Calgary housing market considering we already have low inventory?
It should be noted that the Conference Board of Canada, like all economic forecasters, has not had a stellar track record when it comes to accurate predictions. Perhaps they are one of the few who have been “less-wrong.”
Has Mayor Nenshi’s desire to see Calgary build “up” rather than “out” resulted in a lack of land on the outskirts of the city for new builds? The director of the University of Calgary’s School of Public Policy, economist Jack Mintz thinks so…
“Calgary now has moved towards what’s called an intensification strategy. And it’s a good thing to have some intensification because you don’t want to hollow out the middle of the city,” says Mintz.
“But you have to have some balance and if there’s no more expansion that’s going to be allowed, maybe we have to close down parks to make way for new housing. Otherwise prices are going to go up because you’re simply going to have higher land prices.”
Mintz says the city needs to think carefully about limiting new housing development if it wants to make housing more affordable.
“The prices can be policy induced. and if you think of it being artificially high that can happen if you’re no longer getting enough supply relative to the number of people who want to move into Calgary.”
ATB economist Todd Hirsch has a different theory…
“I think that’s part of the reason building costs and material costs and labour costs are a little bit elevated in Calgary still because again we’re not seeing the same impact in Edmonton. So I think Calgary’s flood last year still having some residual carry over effect to these new home prices even today.”
Hirsch says once the flood rebuilding is complete, building costs will come down — and we will likely see more moderate growth in new home prices.
Read more Curbing urban sprawl, flood driving up new home prices
What we didn’t hear in this story is that Calgary is inundated with thousands of new residents every year. Last year alone, net migration to Alberta from the rest of Canada totalled almost 45,000. Would there be a problem with supply, and higher prices, if we weren’t growing so fast?