A low inventory is continuing to drive resale housing prices upward with the city poised to set numerous all-time records from February MLS sales.
As the housing market comes to the end of another month, Calgary is on the verge of hitting new highs for average sale prices and median prices in both the overall city market and in the single-family sector.
According to the Calgary Real Estate Board, from February 1-26, the average MLS sale price for all city sales was $485,085, up 6.94 per cent from a year ago while the median price has jumped by 7.80 per cent to $425,000. Also, the single-family home market has seen the average price soar to $553,077, up 8.16 per cent from a year ago while the median price has risen by 10.98 per cent to $485,000.
“We are seeing record sale prices throughout the city and throughout various price points. Plain and simple, buyers are getting desperate,” said Tamara Pilipchuk, a realtor with RE/MAX Realty Professionals. “With low inventory and competing offers becoming more and more common, we are seeing buyers get more aggressive in their hopes to secure a property. My clients know that if an appealing property comes onto the market, we must see it within hours or they know to expect that it will be sold the same day that it is listed.
“Momentum appears to be continuing to build, especially in entry-level pricing of product in all neighbourhoods. With the median home price on the rise, first-time homebuyers and those looking to enter the market are finding the biggest challenges. There is a multitude of reasons as to why we are seeing record sale prices and all-time record highs. Coupled with record low vacancy rates, Calgarians look to purchase their own homes instead of renting because of rental prices skyrocketing. As well, investors have rejoined the buyer pool looking to purchase rental properties to capitalize on market conditions.”
According to CREB, the average monthly MLS sale price record for all city sales is $466,466 set in June last year and the median price record of $417,250 was set in January of this year.
For the single-family home market, the average sale price record of $527,634 was established in December of last year as was the median price record of $463,500.
“My clients have competed with nine and 10 other offers the first night of a property being listed which is indicative of how unbalanced the buyer pool is in comparison to inventory. Sales and home prices are rising, hitting all-time record highs. People see opportunity in the resale market as new construction and lot prices increase making building your dream home unattainable for many. Low interest rates, low unemployment rates, high net migration and a booming economy in our city is the cause of this upward trend,” said Pilipchuk.
So far this month, total MLS sales of 1,672 in the city are up by 7.59 per cent from the same period last year. New listings have increased by 1.37 per cent to 2,444 but active listings are down 19.24 per cent to 2,850.
Single-family sales have increased by 1.18 per cent to 1,114 but new listings are down by 5.11 per cent to 1,596 and active listings are off by 22.02 per cent to 1,852.
“In an unfortunate metaphor given last summer’s floods, Calgary’s housing demand dam has burst,” said Don Campbell, senior analyst with the Real Estate Investment Network. “Those sitting on the sidelines waiting for a lull, combined with renters who are witnessing dramatic rental increases in key areas of the city, are combining with regular housing demographic requirements to push the demand curve up much more quickly than the available listings.
“This strong seller’s market, in the heart of the winter, has pushed average sale prices up more quickly than would be economically expected. Given this, we should see sellers begin to move into the market to take advantage of this profit opportunity.”