MEASURING THE MARKET!

Sales decline within city
Where have first-timers gone?
By Marty Hope, Calgary Herald
September 25, 2010

Calgary appears to be bucking the national real estate trend -- and not in a good way.

On a seasonally-adjusted basis, sales across Canada in August were up slightly more than four per cent, says the Canadian Real Estate Association.

Sales in Calgary declined 32 per cent in August compared to the same month last year -- and for January to August, down almost 14 per cent compared to the same period in 2009, says the Calgary Real Estate Board.

"Calgary's housing market has been undergoing a measured correction over the past four or five months," says CREB president Diane Scott. "Sales are trending lower as a result of a decrease in first-time home buyers entering the market and a decline in pent-up demand following a strong post-recession recovery."

From January to August, the number of sales were up 2.2 per cent compared to the first eight months of last year.

Transactions rose sharply during the second half of 2009, reaching levels unlikely to be matched in the home stretch of 2010,

"High sales activity late last year and earlier this year borrowed from sales this summer and will continue do so over the coming months," says chief economist Gregory Klump of CREA. "This makes the return to more normal levels of sales activity look like a steep downward trend."

What he termed the "hangover from accelerated home purchases" is likely to continue for rest of 2010, he says -- adding that while economic figures and job growth are expected to be "tepid, they will continue to support housing markets."

Activity was cooking, though, in Ontario and B.C., with monthly gains in these two provinces accounting for most of the improvement in national sales activity in August -- and that's despite the introduction of the harmonized sales tax.

Seasonally adjusted sales activity either increased or remained stable in over half of all local markets across Canada, says CREA.

In Calgary, the listings story is mixed.

They increased for detached single-family homes, but pulled back in the condominium area. Provincially, though, listings were on the decline.

The number of new listings brought to the Canadian market edged up 1.9 per cent in August compared to the previous month.

Despite having edged slightly higher in all provinces except Alberta, new listings remain 16 per cent below the peak reached last April on a national basis.

The average price of homes sold via Canadian MLS systems in August was $324,928, which is on par with the same month last year ($324,843).

Average home prices eased slightly in Alberta and New Brunswick in August, but gains in every other province exceeded the national increase.

Average prices rose or were stable in nearly two-thirds of all local markets on a year-over-year basis, but increases were shrinking in Canada's most active and priciest markets.

Again in Calgary, the direction of prices was dependent on what was being bought.

Detached homes fetched an average of $445,617 last month, down about $8,500 from a year ago, while the condo average went up slightly more than $3,000.

"Rising interest rates and a projected slowdown in job growth mean that the Canadian housing market is expected to continue to cool," says CREA president Georges Pahud.

"This is overlooked in recent commentary that suggests further changes to mortgage regulations may be needed. A further tightening of regulations could negatively impact Canada's softening housing market and consumer confidence."

Photo by: Jek in the Box