Market Stats for Calgary Metro
Median Price of Single Family Homes down from high of $439,000 in 6/07
Median Price and Unit Sales - March '08 to July '08
Single Family Market
July 2008 July 2007
Median Price: $408,500 $435,000
Unit Sales: 1313 1495
June 2008 June 2007
Median Price: $408,000 $439,000
Unit Sales: 1439 1757
May 2008 May 2007
Median Price: $419,000 $435,000
Unit Sales: 1368 1995
April 2008 April 2007
Median Price: $420,000 $432,000
Unit Sales: 1363...... 2086
March 2008 March 2007
Median Price: $420,000.... $427,000
Unit Sales: 1418... 2272
Condominium Market
July 2008 July 2007
Median Price: $273,500 $297,900
Unit Sales: 535 603
June 2008 June 2007
Median Price: $282,000 $304,900
Unit Sales: 556 792
May 2008 May 2007
Median Price: $285,000 $308,00
Unit Sales: 577 887
April 2008 April 2007
Median Price: $290,000.... $309,000
Unit Sales: 581... 839
March 2008 March 2007
Median Price: $293,000..... $290,000
Unit Sales: 565.... 1026
MLS Average Prices
Two markets in Calgary...the luxury/estate market and everything else...
There are two distinct markets to track in Calgary and area, which has been the case since mid 2007. The activity in the luxury market now leans towards a more balanced market and thus the average price", which reflects the market as a whole, is showing a decline. In Calgary Metro in April, there were 179 sales above $600,000 (42 over $1 million) and in May there were 190 sales above $600,000 (50 over $1 million). Country residential sales (acreages) were down in May by 21%, but the median price was up by almost 10% to $855,000. You need not be a rocket scientist to note why average and median prices are still showing as high as they do. The media and regulatory bodies should take note.
The average price, and the median price, for single family, Calgary Metro, rose between January and early April 08 due to a substantial increase in sales - and an increase in the sold prices - in the luxury/estate market. In the price ranges below $500,000 in particular, housing prices continue to fall due to this market being a buyer's market. Effective August 8/08, CREB lists 991 SF properties for sale at $350,000 or less; effective June 30/08, according to CREB, there were 1047 SF properties listed (active) at less than $350,000; effective, April 30/08, there were 851 units.
Listing and Sales Activity in Calgary Metro
July 31/08 - Calgary Metro Condo Listings: 2888
June 30/08 - Calgary Metro Condo Listings: 3093
July 31/08 - Calgary Metro Single Family Listings: 6038
June 30/08 - Calgary Metro single Family Listings: 6543
May 31/08 - Calgary Metro single Family listings: 7099
July '08 - Calgary Metro Condo Sales: 535
July '08 - Calgary Metro Single Family Sales: 1313
May '08 - Calgary Metro Single Family Sales: 1368
Sales/ Listings ratio: SF 21% , Condos 18.5% (July/08)
That means 2 homes out of 10 are selling in Calgary Metro. What's the bottom line? Sellers should lower their expectations for high selling prices (asking prices should be no higher than the last comparable sale) and buyers may be able to find an affordable single family home if they work diligently with an experienced agent, as there are some motivated sellers in the market. Selling prices can be as much as 10% or more less than asking prices.
Where are prices headed?
Unless someone can disprove the supply and demand" theory, selling prices in a buyer's market are unlikely to increase; conversely, they decrease. But consumers should bear in mind that real estate markets are" local". If the sought after neighborhood offers 3 listings as opposed to 12 somewhere else, don't expect a steal". That's supply and demand principles at work, obviously. But even those three sellers will have to price realistically, for market conditions overall.
The other consideration relative to pricing is affordability. Many buyers have been driven from the market due to their inability to qualify for mortgages. Ergo, if a district appeals to average" buyers, not affluent buyers, and there is an abundant supply of listings, sellers should be establishing their asking prices based on the most recent sales - pricing at or below the previous sale price. There's always some other seller more motivated than you, as a seller.
The media seems to have finally woken up to the fact that the housing boom is over. Many REALTORS have been trying to drive that point home for months. Even the Canadian Real Estate Association was erroneously describing Calgary's market as balanced over the latter months of 2007 and the spring of 2008. The local CMHC office, moreover, comments in mid April 2008, that prices in the resale single family home market are holding, that there's not much of a change." In June, they revised their housing forecast, and suggested Calgary would be lucky" to see any price appreciation this year, and then again the last week of June are telling the media that prices haven't really changed. To many observers they seem intent on trying to disprove the theory of supply and demand".
Buyers may feel that prices will continue to decline; as mentioned above, that may depend on the area of activity. When the listings inventory decreases to more normal levels (thousands less than now) and when sales activity increases to a more normal level for this size of market - resulting in a sales to listings ratio of 50% or more for total listing inventory (not new inventory added", as CREB likes to publicize)) one can expect prices to stabilize.
Media Reports mislead consumers...prices are down
Sellers in the Calgary market have long been under the false impression that prices have been stable since the peak of June 2007. Why else do we have 7100 single family listings in Calgary metro alone, and almost 15,000 total MLS listings ending May 2008? Either that, or expect a mass exodus of Calgarians when sellers finally come to their senses and accept that 2007 prices are long gone. Local media in Calgary have made little effort over the past year to analyze sales statistics that are published (and available to anyone) by the Calgary Real Estate Board (CREB). Nor do they challenge comments that are solicited, and subsequently published and aired, from various bank economists and organized real estate spokespersons, including CHMC - all who ought to know better.
All of the above have towed the line about Calgary market prices holding up". CMHC and others, including a major national real estate franchise and a prominent local real estate investment company, are even forecasting price increases for the year - with a significant increase forecasted by the latter. The average price" that CREB quotes for the local market is weighted by some new home inventory, but more importantly some fairly strong activity in the estate market; ergo, the average price" is usually a distorted figure...it certainly does not reflect a price for an average family home in Calgary and area.
In the Calgary Herald of May 2, 2008, a spokesperson for the Calgary Real Estate Board comments that, in his opinion, that the market continues strong in a normalized sense" if the years 2006 and 2007 are taken out". Assuming the quote is correct, one has to conclude that he hasn't had the time to check previous years, as city single family sales (Calgary Metro) for the past 2 consecutive months are significantly less than 2004 sales figures. Tell that to buyers and sellers, sellers who are selling for less than their mortgage balances in some cases, and buyers who have to cough up more funds to close on new home purchases because the appraisal is thousands of dollars short.
Economic impact of inflated prices and the housing slow down
For the past two consecutive months April and May, total MLS sales are down 1141and 1178 units respectively from last year. At an average, conservative sale price of $427,000, that's $50 million approximately, just in real estate fees that the local economy won't see, and some of the housing equity that won't be spent. Never mind the spin off effect that housing activity creates in the economy, from related closing fees to furniture, appliances, building supplies, moving expenses, and other consumption activity.
Add to this the substantial reduction in new home sales activity, and one can see that it's not a pretty picture. Compounding all of this troublesome economic activity is the change in net migration into Alberta, a loss of 4196 people in the last half of 2007, and the threat of recession in America - if not already existing - and of an economic downturn in Central Canada. Housing activity and prices are falling right across the country.
Is an American style housing crisis coming?
No, not in the sense of a sub-prime mortgage fiasco resulting in bargain basement prices; but in terms of housing affordability for buyers - yes. The average Joe" in the USA still can't afford to buy in many American markets, even with the drastic price reductions in effect. When it comes to measuring affordability, organized real estate in America is much better at it than Canadians.
Sellers in Calgary and area would be wise to give pause to the thought that an economic downturn isn't going to help sell property. Calgary average wages are not on a par with Victoria, Vancouver, and Toronto. (Moreover, Calgary prices exceed those in many areas of the Toronto housing market.) But what does this writer know...I am not an economist, just a REALTOR for the past 27 years.
