August 2008 Market Report
The total number of listings in the single family home market in Calgary has continued to fall from the high reached in May of over 7000 homes to 5,541 at the end of August. This is about 700 more listings than were on the market this time last year. At the same time the number of new listings brought on the market was 20% fewer than new listings last August.
The median sale price of a single family home was $398,000 and the average was $440,000. These prices are down compared with last year when we saw the all-time peak of the average sale price at over $500,000.
The numbers for condos are behaving in much the same way. There were 2,700 listings at the end of August compared with 1,855 last year. The number of new listings was down by 11% compared with last year. The median sale price was $268,500 and the average sale price was $287,000.
As you probably remember from any economics class you’ve ever taken, all things being equal when supply is high and demand is low, prices will be lower. When supply is low and demand is high, prices rise. This is exactly what we’ve seen over the past few years in Calgary. Starting last summer we’ve seen a significant increase in the number of homes on the market while demand has fallen off a little and the prices have moved down as a result.
There hasn’t been an alarming decline in prices overall and a lot of the difference in the averages might be caused by fewer expensive homes selling and a greater number of more modest homes being sold. For example, last August there were 55 homes sold below $300,000 while this August the number was 112, this would have a substantial effect on the average price even though a greater percentage of the homes sold over $1,000,000 this year is greater than last.
There are so many ways to analyze the statistics, it’s important to come to your own conclusions about the market. The headlines in the newspapers don’t tell the whole story. Inventory in the single family home market and in the overall Calgary MLS market has been coming down steadily for a few months and there are plenty of positive stories about the local economy and job market that give a good outlook for housing demand in the future. In the meantime there are some great opportunities for first time home buyers with selection and negotiating power they haven’t had over the past several years. I’ve been blogging some of these stories this week.
You can access the complete statistics package from the Calgary Real Estate Board from this link.
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