Recent activity in the Calgary real estate market has discount realtor Roy Almog thinking back to the frenzied days of 2007.
In late June, he listed a “modest” house in the northwest neighbourhood of Mount Pleasant. In less than 24 hours, it had 14 showings and nine offers. The house sold for close to $30,000 above the asking price in less than 20 hours on the market.
“It was like 2007 all over again,” said Almog of 2% Realty.
“It’s been very busy this spring and summer. Very steady activity. We’re not seeing so much a huge increase in price but just the speed of sales. The properties are not lasting as long. They’re usually selling quite quickly. The days on market are a lot lower and getting lower.”
Almog said that’s the first step to seeing prices on the upward swing. Inventory is not lasting as long. People are starting to lose out on properties so they get a bit nervous.
“And the latest thing which I think really took it over the top was the mortgage rules that have just changed where a lot of people were rushing in to lock in their mortgage before the new rules commence in early July,” he said of the federal changes recently announced to tighten lending across the country.
Total MLS residential sales in the city, according to the Calgary Real Estate Board, rose by 12.12 per cent in June from a year ago to 2,202 transactions and the average sale price jumped by 3.61 per cent to $441,418. Days on market to sell a home dropped from 45 in June 2011 to 40 last month.
“The sky is not falling. Despite the fact of everything else that’s going on in the States, in Europe, with Greece, with this and that, I think we’re still humming along,” said Almog. “We’re always a bit sheltered and a little bit more buffered than some of the other places that are susceptible to these spikes up and down. We’ve still go a very strong economy. The banking system. Interest rates aren’t going anywhere. All of those contributed to a healthy market and encouraging people to get out and purchase.”
Single-family home sales increased in June year-over-year by 16.17 per cent (1,609) while the average sale price rose by 1.87 per cent ($489,271). The condo apartment market saw sales rise by 0.89 per cent (340) and the average sale price jump by 9.03 per cent ($300,806). And the condo townhouse category had a sales hike of 4.55 per cent (253) and a price hike of 0.40 per cent ($326,053).
“There are a couple of reasons leading to the increase in sales that we seeing this year compared to 2011,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. “Mortgage rates are still relatively low and home prices are experiencing some upward pressure with the market more balanced. The growing economy and tighter labour market conditions has also helped lift income levels for many prospective buyers.”
Ann-Marie Lurie, CREB’s chief economist, said recent mortgage rule changes may dampen some of the gains in the resale market.
“But this is not expected to cause a full reversal of either sales or price growth, provided the global economic situation does not significantly worsen,” she said.
“Our housing market is returning to normal levels of activity, supported by the improvements in our employment sector and rise in migration.”
At the midway point of the year, the following are year-to-date sales and average prices for the city market and percentage change from the same period last year:
Total MLS — Sales 11,752 (15.78 per cent); Average price $429,453 (2.53 per cent)
Single-Family MLS — 8,520 (18.53 per cent); Average price $480,294 (1.68 per cent)
Condo Apartment MLS — Sales 1,858 (7.15 per cent); Average price $278,040 (1.24 per cent)
Condo Townhouse MLS — Sales 1,374 (11.89 per cent); Average price $318,947 (3.18 per cent)
CREB also released Tuesday its benchmark prices for the month of June. Benchmark prices indicate how typical properties are valued in the market and are calculated using a statistical model that estimates prices based on several factors. Benchmark prices in June and their percentage change from a year ago were: Total MLS for the city, $385,800, 5.87 per cent; Single-Family, $430,800, 7.35 per cent; Condo Apartment, $246,300, 1.48 per cent; and Condo Townhouse, $278,000, 3.27 per cent.
“Overall the Calgary market is trending towards long-term stability,” said Bob Jablonski, CREB’s president. “Activity levels are consistent with our expectations, and are not demonstrating an overheated market. We’ve seen a slight lack of supply in single-family homes, but this is not the case in the broader residential market, including surrounding towns.
“Homebuyers are confident about long-term prospects in our city, and continue to search for homes in those communities that align with their needs. People who are in the market to buy right now have to make their decisions quicker, but they are well informed and they continue to seek out value for their money.”
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