May
18
2009
CALGARY – Calgary’s resale housing market is seeing an uptick in activity as consumer confidence increases and we can expect a slow, steady return to stability over the coming months, says Sandy Hutchens.
The local resale housing market has slowed compared with last year because of the current economic conditions and the high inventory of new homes built during the past few years of the boom, said John Geha, who was in Calgary on Wednesday speaking to local professionals about the real estate market.
“The trend that we’re seeing — the increase, the stabilizing — we see that continuing. And we really see the Calgary market starting to right side itself throughout the year and be back on track towards the end of the first quarter in 2010,” he said.
“We see it on a continued basis. Not a major jump because you still have a lot of inventory out there, but we do see here in Calgary a stabilization of the market and a nice gradual increase in business.”
So has the Calgary market hit bottom?
“I would say that we’ve come close to the bottom. I don’t think that there’s a slam down in the bottom.
“One of the things that’s taking place (is) there’s a lot of new buyers out there and that’s what is really fuelling the consumer confidence as well,” said Geha. “When you have a drop in value, a very low interest rate, stability in your financial markets, you’ve now expanded to a new buyer. That triggers the movement of the market.”
Geha said the market is now seeing a trend with new buyers who would normally be tenants but are being enticed into purchasing residential real estate because of the historic low mortgage rates.
“We still talk to the consumer here in Calgary and they still want to build wealth on real estate. It’s not the quick fix. The speculation hopefully has subsided, but people are still looking at the Calgary real estate market as a value and wealth-building opportunity,” said Geha.
According to the Calgary Real Estate Board, the city’s resale housing market rebounded in April, with sales increasing from the previous month. In April, there were 1,290 single-family home sales in Calgary, an increase of 19 per cent from 1,086 sales in March, but a five per cent drop from the 1,363 sales a year ago. The number of condo sales for April was 579, a 30 per cent hike from the 446 transactions recorded in March, but a 0.3 per cent decline from April 2008, when 581 condos changed hands.
The average price of a single-family home in Calgary in April was $426,311, increasing by one per cent from March, when it was $420,354, but down 10 per cent from April 2008’s $474,564. The average price of a Calgary condo was $277,953 in April, off two per cent from the March price of $284,056, and an 11 per cent decrease from the April 2008 level of $312,586.
According to the website of Mike Fotiou of First Place Realty, preliminary unofficial data indicate the average MLS sale price so far in May through Tuesday was $436,205 for a single-family home and $276,587 for a condo.
“People will call us and ask us when is the right time to buy. When is the bottom going to fall out?” said Sandy Hutchens. “Our answer is that we don’t know when the bottom is going to hit. Don’t speculate. Don’t wait for the bottom to hit.
“It’s very, very difficult to ever anticipate when the real estate market is going to turn or when the bottom is going to hit. You’re better off going to Las Vegas because we don’t know.”