GOTTEN GAINS

Condo market gains strength
By Kathy McCormick, Calgary Herald
August 6, 2011

The story of the resale condo market in Calgary is positive, albeit fragile, say some of the city's realtors.

For the first time since April 2010, sales of resale condos have gone up year-overyear - and in terms of new condos, several inner-city highrise projects that were in limbo have been brought back to the market.

For April 1 to the end of June, sales of resale condos reached 1,617 within the city.

The Calgary Real Estate Board's Zone C - which roughly corresponds to the city's southwest and includes the Beltline - posted the most sales from April 1 to the end of June at 881.

Not surprisingly, the busiest communities during that period were in the innercity neighbourhoods of Connaught with 95 sales and Victoria Park with 50 sales.

"Condo sales bounced back this month (in July) and we now have less than four months of supply on the market," says Sano Stante, president of the Calgary Real Estate Board. "Stronger condo sales, combined with a decline in inventory, will lend more balance to this market in the months to come."

The key, though, is prices, says Marlene Swinton of Real Estate Professionals Inc.

"Buyers today are extremely nervous and a lot of them come in well below list price," she says.

"A lot of sellers, on the other hand, haven't recognized that prices have changed. They don't want to hear that the marvellous prices they heard they could get for their place once isn't there anymore."

That resonates with Chris Zaharko of Royal LePage Foothills. "My gut feeling is that people are only in the position to buy and pursue it if they think it's the absolute bottom line."

Prices during the second quarter of the year averaged anywhere from $77,600 for five sales in Forest Lawn in the board's Zone B - which roughly corresponds to northeast Calgary - to $850,000 for one sale in Bayview in Zone C.

But overall, affordability was key. A total of 30 communities within Calgary had average sale prices under $200,000 - with more buyers purchasing condos under that price range this year compared to last year during the same period.

"Buyers in this market expect value and many are taking advantage of some affordable buys in both the single-family and condo markets," says Stante.

He expects this fall to be more active. "I think as the inventory is absorbed, more particularly in condos, the shift will be to sellers and there will be slight increases in price."

Swinton, who has a condo apartment building of 11 units among her portfolio of properties for sale, says she had three calls for showings for that development on the last weekend of Stampede - traditionally a very slow time for real estate transactions.

"It was priced well and a good product, but still, that is investors looking to buy, so that's positive."

Zaharko, too, points to the new condo market where several highrise developers are starting marketing or re-starting projects that had been on hold during the downturn in the inner city.

"The big developers are coming back to the table," he says.

"They've got their pulse on the market, and see what the oil and gas industry will be doing in the next couple of years. The timing is right to start now."

Typically, a highrise project can take two years or more for construction to be complete.

Zone C, which is mostly southwest Calgary and the inner-city neighbourhoods in the Beltline, was not surprisingly the most active for resale condos in the second quarter.

It also had the highest average price and highest median price at $317,301 and $285,000 respectively. The median price is the mid-point of all sales.

Overall, most condos took an average of 54.5 days to sell - but if it's the right product at the right price in the right location, it will sell quickly.

A $835,000 condo in Eagle Ridge in Zone C, for example, sold in just nine days during that period; another condo in Citadel in Zone A went for $440,000 in just four days.