Calgary housing market surging
One year ago, the downturn in the Calgary residential real estate market was beginning to take hold on the heels of a global financial market meltdown.
But just two weeks into November, preliminary housing sale numbers indicate how dramatically the market has turned since then.
Sales in November of this year will eclipse those for November 2008. And at this pace, average sale prices will also be up from a year ago.
"It has a lot to do with the low mortgage rates," said Nikki Harrison, a realtor with Re-Max Realty Professionals, adding that has stimulated buyers to purchase homes. Last year at this time, the bad and uncertain economic news contributed to people sitting back and not moving, but now the overall outlook for consumers is more positive.
"We're definitely optimistic that things are starting to change," she said Friday at a home listed by realtor Ted Greenhough she is helping market for $1.2 million in the northwest Tuxedo neighbourhood.The numbers seem to back up Harrison's outlook for the Calgary real estate market.
According to the website of Mike Fotiou, of First Place Realty, so far this month until Nov. 18 there have been 662 single-family home sales for an average sale price of $470,774. For the entire month of November last year, there were 670 sales at an average price of $435,471.
Condo sales have already surpassed last-year levels. This month there have been 292 transactions at an average sale price of $300,118. November 2008 recorded 284 sales for an average of $285,820.
"It's very difficult to predict what's going to happen in this market because it's rather volatile as far as interest rates(and where they're) going. We're not really sure and we're just very optimistic that it will continue to get better," said Harrison.
The more positive trend in the local real estate market has been seen since May, beginning six consecutive months of year-over-year sales increases for both the single-family and condo markets.
"Obviously, sales activity continues to remain fairly steady," said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. "The presence of lower mortgage rates continues to benefit the home buyers toward sales growth.
"The economy in general is also showing more signs of improvement. Employment levels on a seasonally adjusted basis have started to trend upwards and employment growth is also one of the primary drivers of housing demand."
The year-over-year gain in sales may appear a bit pronounced in November as sales activity began to slow at the end of 2008, added Cho.
Todd Hirsch, senior economist with ATB Financial in Calgary, concurred that low mortgage rates continue to have a dramatic impact on the residential real estate market. "There is a sense, a correct sense, that these mortgage rates aren't going to stay this low forever, so people are getting in, I guess, while the getting's good. They know that if they wait too much longer, like another year, those rates are going to start to go up," said Hirsch.
Another factor for the housing market, he said, is that the city and the province continue to have positive in-migration numbers. "That's helping when they move here," said Hirsch. "They're not stampeding in like they were in 2006, but they're still moving to Alberta and to Calgary and putting some upward pressure, especially at that entry-level home buyers--the condo market or the smaller single-detached home. That's adding some lift to the market there, too."
(By Mario Toneguzzi, Calgary Herald)
