Calgary Housing Market Smashes Records in May
CALGARY HERALD — Calgary’s resale housing market set a number of records in May.
According to the Calgary Real Estate Board, new levels were reached during the month for median and average MLS sale prices in the single-family market as well as for total residential sales in the city.
Also, the month had the highest level ever for luxury home sales of properties more than $1 million, according to Mike Fotiou, associate broker with First Place Realty in Calgary. There were 84 luxury home sales in May, besting the record for any month which was previously 80 in May 2012.
Kaitlyn Gottlieb, a realtor with Century 21 Bamber Realty in Calgary, said the upper-end market is seeing an increased demand for inner-city luxury homes with areas such as Hillhurst, Crescent Heights, Capitol Hill, Altadore and Parkdale some of the most coveted for homebuyers who are seeking the level of craftsmanship and detail you traditionally find in estate-style homes. It’s a development trend that shows no signs of slowing down.
“Today’s Calgary’s real estate market continues to show positive growth with steady price increases which are especially apparent in the starter to average single-family home sales, signalling a high level of confidence in both buyers and sellers,” said Gottlieb. “Inventory is increasing, although remaining lower than last year and properties particularly under $500,000 are selling very close to asking price in a shorter period of time, as buyers are prepared and ready to move on properties as they become available. We are also seeing an increase in competing offer situations as a result of the high demand and the lower inventory currently on the market.
“As we move into a more balanced market, buyers are also seeing great opportunities in Calgary’s market and as prices increase, the inventory increases, offering more choices for buyers. Calgary’s growing economy coupled with the tightening rental market and recent rental increases (contribute) to the market’s activity as renters move away from renting and into home ownership.”
The average sale price of a single-family home in May reached a record of $521,887, eclipsing the previous mark of $518,604 which was set in March of this. Average sale prices during the month were up 4.03 per cent from a year ago. The median price was also a record at $454,400, up 4.24 per cent from last year. The previous median price record was $450,000 in March of this year. The benchmark price in May, looking at typical properties sold, was up 6.88 per cent to $456,900.
Record prices were also set in May for total MLS residential sales in the city with the average price at $462,076, up 3.83 per cent from last year, and the median price at $406,500, up 4.23 per cent from May 2012.
Previous record prices for total MLS residential sales were set in March of this year at $460,903 for the average and $403,000 for the median. The benchmark price in May was up 6.89 per cent to $409,600.
“With Calgary’s moderate but steady increases in the average home price and increasing number of sales, both buyers and sellers can expect a positive and opportunistic spring market. Overall these factors equate to a positive housing market and long term sustainability for Calgary,” added Gottlieb.
In May, total MLS sales in the city of 2,544 were up 6.85 per cent from last year while single-family sales of 1,766 increased by 3.46 per cent.
Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said home prices in the city posted some impressive year-over-year gains last month.
“With sales up, combined with a decline in active listings and days on market, prices have experienced some upward pressure,” he said.
Ann-Marie Lurie, CREB’s chief economist, said “improvements in Calgary’s resale housing sector are being fuelled by the combination of employment gains, migration growth and tight rental market conditions.”
“However, resale price growth will likely moderate, as competition in the new-home sector and sluggish economic growth expectations will weigh on the housing market,” she said.
Meanwhile, a special housing market report released Monday by TD Economics, said resource-based economies, like Calgary, are facing better economic prospects over the next two years.
“Known for better job opportunities, more and more new immigrants and Canadians are choosing Calgary as their main destination,” said the report. “The inflow of people is expected to help support housing demand and help mop up some of the large amount of new homes currently under construction in the metro area.”
Calgary is also starting 2013 from a stronger position than some other markets. Calgary’s housing market peaked in late 2007, at which point the market looked to be overpriced and overbuilt, said TD Economics.
“But, the housing market went through its correction once the recession struck in 2009 and there has been less froth in the market since. Existing home sales are down 32 per cent from the peak experienced in 2007, while home prices have remained relatively flat since 2009 – helping to stabilize the home price-to-income ratio,” it said.
“Growth in Calgary home prices is likely to moderate from the current pace, but should remain slightly positive over the forecast horizon. Furthermore, home sales are likely to continue to grow moderately and housing construction ought to occur at the pace of household formation.”