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 of 2007.
“It’s really encouraging to see that the Calgary market remains strong,” said Becky Walters, president of CREB®’s board of directors. “It’s reassuring to both buyers and sellers to see that this area is outperforming many parts of the country.”
Single-family sales totalled 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 of 6.2 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 1,258 units, an 11 per cent increase over the previous year. Sales growth outpaced the number of new listings, causing inventory levels to decline to 893 units. This pushed the market toward a sellers’ market.
Tighter market conditions supported a year-over-year 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, in turn, will provide 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 3,497 new residential listings in the city, an eight per cent increase relative to 2012. Sales activity also increased to a total of 2,376. Residential year-to-date sales improved by nearly four per cent compared to the same time in 2012. Meanwhile, citywide benchmark prices totalled $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,” Lurie said.
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, Lurie said. 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.