Calgary Real Estate News – City Growth Slows While Town Sales Continue To Soar In August 2012!

Residential sales in the city and surrounding towns record respective gains of 10 and 42 per cent - The monthly statistics package is available here.

CREB News Release: Calgary, Sept. 4, 2012

Following several months of higher than expected sales growth, Calgary residential sales in August totaled 1,725 units, a 10-per-cent increase over last year.

“While the sales grow remains strong, it is slower than previous five months in part due to the lack of new listings in the City’s single family market,” said Bob Jablonski, CREB® President.  “With fewer products to choose from, many consumers are holding off on transacting or turning to surrounding towns, the new home market and condominiums.”

New listings within the City of Calgary total 2,585 units in August, down 13 per cent from one year ago and down more than four per cent on a year-to-date basis.  Meanwhile, new listings in the surrounding towns have improved by nearly 10 per cent after the first eight months of this year.

“Improving choice, affordable prices, combined with lifestyle factors and the lack of choice in the single family market within city limits, have driven sales growth in towns surrounding the city,” said Jabslonski.  “In general, the area has witnessed sales activity that is comparable to peak sales activity.”

Single family sales totaled 1,169 in August 2012, six per cent above levels recorded in 2011.  Meanwhile, new listings declined by 14 per cent on a year-over-year basis over the same time frame.  This year, demand has far outpaced new additions to supply in the single-family market, causing a significant depletion of standing inventories.  However, the recent decline in sales growth helped ease the pressure on the market, as months of supply have risen to levels more consistent with balanced territory.

While sales growth activity did cool, the upward price pressure on single family homes will not likely ease until the fall.  As of August, the benchmark price for a single family home was $432,600, an eight-per-cent increase over August 2011 levels.  The increase may seem significant, but the prices have leveled off compared to the previous month and remain nearly $20,000 below peak levels recorded in July 2007.

August sales in both condominium apartment and townhouse units recorded year-over-year growth that outpaced the single family market.  Year-to-date apartment sales have improved by nearly 10 per cent over 2011, while the level of new listings remained at levels similar to last year.  The improvement in sales relative to new listings has helped reduce the elevated inventory levels, keeping this market in balanced territory.

The benchmark price of a condominium apartment for the month of August was $248,700, a 3.6-per-cent increase over the previous year.  Meanwhile townhouse style condominiums had a monthly benchmark price of $278,200, only a 2.5-per-cent increase.  While the upward momentum is a signal of continued recovery in the condominium market, the benchmark price for condominiums remains nearly 16 per cent below peak levels.

“Some continue to foresee a scenario where price declines are looming in the local housing market, especially given national trends,” said Ann-Marie Lurie, CREB® Chief Economist.  “There is no question economic concerns can threaten our housing recovery. However, to date Calgary housing market consumers are exhibiting confidence evidenced through the pick-up in sales activity across all housing types.

“The rapid sales growth caused supply levels to drop, particularly in the single family market, resulting in price gains.  While we anticipate recent movements in the single family resale market will take some pressure off the higher-than-expected price growth, another city wide price correction is not expected given current economic growth expectations combined with one of the best affordability climates in the country.”

We’ve been anxiously awaiting Calgary’s Real Estate stats for July and they’re in and the numbers are very good!

Calgary, August 1, 2012 – Calgary continues to buck national housing sale trends. The 1,936 residential units sold in July represent a 21.3-per-cent increase over 2011.

“Recent mortgage rule changes prompted much discussion of a national housing correction.  While the two largest cities (Vancouver and Toronto) have started to witness declines in home sales activity, Calgary continues to record improving sales and prices,” says Ann-Marie Lurie, Chief Economist for CREB®.

“The gains were supported from the economic growth in the region,” Lurie says.  “Last year, Alberta led the country in economic growth and – with Calgary being the energy capital of the country – the city has benefited from growth in full-time employment, migration and overall improved confidence.”

Year-to-date City of Calgary sales totaled 13,684, a 16.5-per-cent increase over the same time in 2011.  Other sectors within the city limits have also recorded significant growth. The single-family market recorded the largest gains at 18.9 per cent, while the condominium apartment posted a 9.4-per-cent rise year-to-date.

“The housing growth positions us with sales activity that is more consistent with long-term trends, of which we significantly fell short of since the recession,” says Bob Jablonski, President of CREB®.  “Consumers have been cautious of the housing market coming out of the recession, but housing sales have improved considerably, driven by home prices that are still below peak, favourable interest rates and bullish forecasts on the local economy,.”

Consumers have delayed adding listings to the market, and, as a result, there are 7.5 per cent fewer single family listings and 3.1 per cent fewer condominium apartment listings, compared to this July 2011.  July sales activity showed seasonal slowing over June’s level, providing some relief on the balance between supply and demand. Citywide months of supply trended upwards towards 3 months.

With tighter mortgage rules and tighter supply, consumers planning on “moving up” may be forced to revaluate what is within their budget.  This may cause some homeowners to delay listing their homes, contributing to the diminished number of listings.  However, if supply levels remain low, this will encourage consumers to turn toward the new home market.

Single family inventory levels were 3,646 units in June, nearly 20-per-cent lower than supply levels recorded in 2011.

Lower inventory, combined with increased sales, has resulted in stronger-than-anticipated price gains.  The single family benchmark price reached $432,400 in July, a 7.8-per-cent increase over 2011, but on average only 5 per cent higher on a year-to-date basis.  The increase in price has narrowed the variance from the peak of the market, but a 4-per-cent price gap remains.

Both the condominium apartment and townhouse market recorded year-over-year benchmark price gains of 2 per cent in July, for respective prices of $247,600 and $277,400.

“While the economic risks continue to weigh on the market, many consumers continue to see employment opportunities in the city,” says Lurie

How do you feel Calgary is doing economically? Are you optimistic or pessimistic with regard to Calgary’s economic outlook. Whatever you’d care to share in the comments below on Calgary economy or real estate market would be greatly appreciated!

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