Single family home prices reach a new high in Calgary – Sellers’ market conditions push up prices across all categories
Calgary, May 1, 2013 – The benchmark price of single family homes reached a new high of $452,900 in April, as market conditions that favour the seller finally drove prices above the unadjusted peak in 2007. “It’s really encouraging to see that the Calgary market remains strong,” said Becky Walters, CREB® President. “It’s reassuring to both buyers and sellers to see that this area is outperforming many parts of the country.”
Single family sales totaled 1,611 in April, nearly two per cent higher than the previous year, but year to date figures are similar to levels recorded in 2012. Sales growth in the first part of the year was stifled by a shortage of new listings and inventory. However, the year over year increase in new listings of 5.4 per cent helped support sales growth in April.
“Declining selection in the lower price range and market conditions that favour the seller in the overall single family market has resulted in a boost in demand in the condominium market and surrounding towns,” said CREB® Chief Economist Ann Marie Lurie. “Inventory levels declined across all of these segments. However, surrounding towns remain in balanced territory, as they experienced the effect of previously elevated inventory levels.” After the first four months of the year, condominium apartment sales totalled 1,259 units, an 11 per cent increase over the previous year. Sales growth outpaced the number of new listings, causing inventory levels to decline to 871 units. This pushed the market into sellers’ territory.
Tighter market conditions supported a year over year condo apartment benchmark price growth of 7.35 per cent. Unlike the single family sector, however, condo apartment prices remain well below unadjusted highs recorded in 2007. Walters said a move to a sellers’ market will encourage those who have been waiting for price recovery to put their homes on the market. This will offer more choices for buyers. “New listings have been declining for the last few years as prices had not recovered,” she said. “People who did not have to sell chose to hold off. Price improvement can encourage new listings, easing some of the tension on the supply levels.”
There were 3,476 new residential listings in the city, a seven per cent increase relative to 2012. Sales activity also increased to a total of 2,381. Residential year to date sales improved by nearly four per cent compared to the same time in 2012. Meanwhile, citywide benchmark prices totaled $406,000 a seven per cent rise over the previous year. “Calgary’s housing market continues to defy national softening trends as gains in the employment sector, migrant growth, rising wages and low interest rates are translating into growing demand for housing,” said Lurie.
For the first time since 2007, conditions favour the seller. However, economic conditions today are vastly different, making it unlikely that Calgary will see a repeat of those conditions, said Lurie. Our economy faces some challenges this year, and consumers still have options in both the new home market and surrounding towns, all factors that will temper price growth.