Housing market shows 'momentum' in February
Real Estate Sales, Prices Firm Up
By Mario Toneguzzi, Calgary Herald
March 2, 2010
The local housing market showed signs of balance, not a bubble, in February, according to the Calgary Real Estate Board.
In releasing its official MLS numbers for the month, the board said sales and average prices increased in both the single-family home and condominium markets compared with year-ago levels.
"We're just pretty steady and we're getting some momentum, but that's fairly typical in a normal year and I don't even compare it to last year because last year wasn't a normal year," said board president Diane Scott.
"Right now, where we sit in February, it's pretty stable. It's a comfortable market and we're almost close to equal buyers and sellers."
Single-family home sales for February were 1,035 units, up 25.5 per cent from February 2009's 825 units. The average sale price hit $458,254, an increase of 10.3 per cent from last year's $415,568.
Also, condo sales were up a whopping 56.3 per cent to 536 units compared with 343 sales in February 2009. The average price also increased by 5.2 per cent, to $282,880 from $268,971.
Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said market watchers have to be careful when comparing February numbers with a year ago.
"In many ways it would be like comparing apples to oranges," Cho said.
"Market conditions now are stronger compared to this time last year, when conditions were more uncertain. We are still seeing steady demand for homes, especially for the entry-level product. Low mortgage rates continue to support demand for home ownership.
"The selection of homes for prospective buyers has also improved, with active listings trending up. The resale market has settled into balanced conditions, putting modest pressure on prices."
A year ago, Cho said, people were losing their jobs. They were waiting on the sidelines to see where the economy was going and where house prices were headed.
Now, with things improving and the economy and housing market stabilizing, prospective buyers are more comfortable with making larger purchases such as homes, added Cho.
Scott agreed the economic situation last year had an impact.
"We were in such a slump and there was no consumer confidence," she said. "It looked like we were going downhill for a long period of time.
"This year, the consumer confidence is up, the interest rates are low still and hopefully that will stay for a little while longer and afford-ability is there. A lot of people who were sitting on the fence last year are coming off."
She said the Calgary housing market has shifted from fragile to fervent in just over 12 months. The city is also seeing a moderate rise in the number of competing offers on homes.
For towns just outside Calgary, sales were up 55.8 per cent to 335 units from 215 a year ago but the average sale price dropped by 4.82 per cent to $353,912 from $371,829.
In the country residential market, which includes acreages, sales increased by 84.38 per cent, going from 32 last year to 59 last month, with the average price remaining virtually the same at $748,506.
Scott said many first-time buyers are seeing this as the time to take advantage of record-low interest rates.
"We will see a rise in both our inventory and demand this spring -- and we expect both to stay in a healthy balance. Prices will edge up as the year progresses, but the rise in prices will be moderate," added Scott.
Single-family listings in Calgary added for the month of February totalled 2,154, a 4.72 per cent jump from a year ago.
New listings for condominiums for February were 1,109, up 24.3 per cent from last year.
"The story of the housing market is all about interest rates at the moment," said Scott. "When the rates will rise is the wild card. Canada's economic recovery showed marked improvement in the final quarter of last year. This will put pressure on the Bank of Canada to begin raising rates sooner than planned to curb inflation."
Calgary Home Sales In February
Single-family homes 2009 2010 Change
Sales 825 1,035 25.5%
Average Price $415,568 $458,254 10.3%
Median Price $375,000 $411,000 9.6%
Condominiums 2009 2010 Change
Sales 343 536 56.3%
Average Price $268,971 $282,880 5.2%
Median Price $249,900 $265,900 6.4%
Source: Calgary Real Estate Board
