Moving Calgary Forward

This update covers the activity for the period of June 1 - June 17, 2009

This report is based on data made available by the Calgary Real Estate Board on June 19, 2009.

CREA - The Canadian Real Estate Association publishes a video podcast about once a month, mainly covering the Canadian Real Estate market from a national perspective. The latest episode (which you view here) does a good job of comparing the current market to the past few years and explains how the recent up-trend in activity that we’ve felt in Calgary has also been reflected in many markets across the country.

Where to get it:
in iTunes
CREA Podcast Website

Last month was the first time since September 2008 that we saw a year-over-year increase in the number of single family homes sold in Calgary.

The improvement and increased activity we’ve seen in recent months has increased. Prices are holding steady for the most part and inventory is decreasing gradually while sales pick up.

Both the re-sale condominium and re-sale single family home markets are in balanced conditions based on the pace of sales and the number of listings available with between 70 and 90 days of supply currently listed. This compares to a 258-275 day supply just six months ago (click the absorption rate chart to enlarge).

This can be good news for both home buyers and sellers. If you were nervous about dipping your toes into the market a few months ago when it seemed like nothing was selling, this should give you confidence that you’re not the only one taking advantage of great rates and lower prices. If you’re getting started as a buyer, order a free first time buyer guide or search all homes for sale in Calgary.

For sellers this increased pace of sales is making the process much more predictable and well priced homes are selling in a very reasonable period of time. If you’re planning to sell, contact me to learn about my proven marketing plan or access my online home evaluation tools.

The tone of the news surrounding the local Real Estate market has really improved recently, and with good reason. Today’s Calgary Herald features the headline “Calgary Housing Sales Starting to Rebound”. That article isn’t online yet but I’ll link to it when it’s available.

Here are some other recent articles:
Michael Bladon: April 2009 Market Re-Cap
Building permits record big jump in Calgary, province, nation
Canadian Housing Market Strengthening: Scotia Economics

The spring market is here and it looks healthier than many expected.

May is traditionally the busiest month of the year in terms of the number of homes sold. Last month there were 1,290 single family home sales (94.6% of last April’s volume) at an average price of $426,311 - compared with $420,354 in March). There’s still no arguing with the ‘year-over-year’ price comparisons which are down considerably, but the average has been edging higher since the start of the year (average is up about 3% since January, median up about 1.6%).

Condo sales were almost identical to last year’s numbers with 579 this year (vs. 581 last year) at an average price of 277,953, down from $284,056 in March and up slightly from the start of the year when the average was $274,919.

While sales have increased at a reasonable pace since the start of the year, the number of listings is down substantially. There are now 3.2 months of supply on the single family market vs 8.6 at the end of last year. Condo supply is 3.53 months vs. 9.09 at the beginning of the year. I think this is a key factor to watch for anyone curious about the direction of prices. With supply and demand in balance the way they are now, it’s unlikely that house prices will make any ‘major’ moves in either direction in the short term.

Download the full report in PDF.

CMHC’s Housing Market report covers new home starts, units under construction, RESALE MARKET, and general economic news.

The Resale portion of the report starts on page 3, here’s a excerpt regarding the first quarter of 2009:

Resale market conditions continued to favour the buyer during the first quarter but there are signs that the market is headed towards balanced conditions. Supply to the marketplace has been coming down this year as January, February and March 2009 showed new listings year-over-year decreasing by 31, 29 and 39 per cent, respectively. Two market balance indicators, months-of-supply and sales-to-new listings ratios have both improved during the month of March. (Source: PDF

Their numbers aren’t as current as some of the other Calgary residential real estate absorption rates I’ve published recently but they do suggest, as I have also posted recently, that we’re headed towards more balanced conditions.

Just 4 months ago it would have been hard to imagine the Calgary Real Estate market returning to anything that would be called “balanced” by the Spring of 2009, but the numbers don’t lie.

(According to the Calgary Real Estate Board stats for Single Family Homes for Sale in Calgary) As of today we’re at pace of 1,219 sales per month and there are there are only 4,330 listings on the market. Now the supply is less than half  what it was in December at 3.55 months.

Last April (2008) there were 1,363 sales and 6,881 homes for sale (5.0 months supply).

Generally, absorption rate is used to define whether a market is “balanced” or a “buyer’s market” or a “seller’s market”. Anything between 2.5 - 4.0 months of supply is considered to be a ‘balanced market’ where prices generally just increase with inflation. Anything below 2.5 is a seller’s market where prices increase because of an excess in demand. Anything above 4.0 months is usually called a buyer’s market and prices can decline in this range because there is too much supply.

The April point on the chart is a projection based on the activity so far this month.

The Bank of Canada announced a rate cut earlier today which is being reflected in a prime rate of 2.25% for variable mortgages. Here’s an update on the current rates plus the monthly cost to borrow $100,000 at each rate (35-year amortization).

These costs are estimated based on a 35-year amortization. If you have mortgage questions or would like to get pre-approved, get in touch with me and I’ll be happy to put you in touch with a mortgage expert who is perfect for your situation.