Calgary’s sizzling resale housing market is showing no signs of cooling as the city recorded the highest year-over-year hike in prices across the country in January – and early indications show February is experiencing a continued escalation in what it costs to buy a home.
The Canadian Real Estate Association released its monthly MLS data on Friday and listed Calgary as the top centre in the country for annual growth in the MLS Home Price Index at 8.98 per cent. Nationally, prices, in the 11 centres surveyed, rose by 4.83 per cent.
Crystal Tost, a realtor with RE/MAX Realty Professionals in Calgary, said the city’s housing market has started 2014 with a bang. The market has not slowed down at all from the healthy pace it set in 2013.
“We are seeing multiple offers in all price points. Obviously the lower the price point, the larger pool of buyers there is and hence a greater likelihood of multiple offers in the lower price points,” she said.
But it’s also taking place in the luxury market with 63 homes sold for more than $1 million and eight of those sales involving bidding wars, including a $3.5 million home, added Tost.
“Eager buyers that want to find a home will have to make sacrifices to get to the homes the day they are listed in order to have a chance at buying the home of their dreams. While true average days on market are currently at 40 days, this is not the case in most sales,” she said. “Homes that offer a good location, in desirable areas, priced reasonably will sell in hours to a few days in the current marketplace.”
In January, CREA said Calgary MLS sales of 1,802 were up 14.6 per cent from a year ago while in Alberta they rose by 5.6 per cent to 3,681 transactions. Across Canada, there were 23,636 sales, up 0.4 per cent.
The average MLS sale price in Calgary in January rose by 6.0 per cent to $444,153 while in Alberta it was up 7.3 per cent to $388,073. In Canada, the average of $388,553 represented a 9.5 per cent hike from a year ago.
According to the Calgary Real Estate Board, between Feb. 1-13, there have been 794 MLS sales month-to-date in Calgary, which is up 2.72 per cent from the same period a year ago. The average sale price of $496,665 has increased by 9.35 per cent and the median price is up by 8.42 per cent to $428,250. Active listings of 2,717 are down 19.47 per cent while new listings are off by 1.57 per cent to 1,253.
Tost said in-migration to the city continues to contribute to the already busy real estate market and there is more activity from move-up buyers who have the ability to upgrade because of more equity in their homes now as the prices have gone up.
“With an estimated 30,000 people moving to Calgary for 2014 our housing market and rental markets will remain strong throughout the balance of the year,” said Tost, adding the current market is not ideal for buyers.
“It places so much stress on them to make fast decisions, life changing decisions on a 10-minute visit to look at a home. Sellers still have to be mindful when pricing their home. Smart savvy buyers won’t over pay on an overpriced home, but are more likely to bid in a bidding war on a home that seems like a fair offering.”
Francis Fong, senior economist with TD Economics, said January was the fifth consecutive month in which sales have fallen across the country, marking the longest string of monthly declines since the recession in 2008.
“No doubt the frigid temperatures and heavy snowfall across much of the country prevented many from diving in to the January market,” said Fong. “As such, when the spring thaw . . . makes its way across Canada, a bounce back in sales activity would be entirely unsurprising. Indeed, the upcoming spring market could get an additional boost as prospective buyers lock-in to the recent pullback in mortgage rates.”
Doug Porter, chief economist with BMO Capital Markets, said Canadian home sales are coming back down to earth after a short-lived burst last summer.
“Of the 26 biggest cities, 13 reported double-digit moves from a year ago, with seven on the plus side and six on the downswing,” said Porter, adding that prices remain surprisingly sturdy.