May Brings MarkedDecline in Home Sales
Average price risesas move-up buyers enter market
Calgary, June 1,2010 – Calgary home sales showed a marked decline in the month of May, according to figures released today by the Calgary Real Estate Board (CREB®).
The number of single family homes sold in May 2010 in the city of Calgary was down 20 per cent from the same time a year ago,and condominium sales saw a decrease of 21 per cent from the same time a year ago.
May 2010 saw 1,262 single family homes sold in the city of Calgary. This is a decrease of 7 per cent from 1,352 sales in April 2010. In May 2009, single family home sales totaled 1,584. The number of condominium sales for the month of May 2010 was 518. This was a decrease of 19 per cent from the 639 condominium transactions recorded in April 2010. In May 2009, condominium sales were 653.
“The first quarter of 2010 was exceptionally strong with our spring sales coming early in the wake of anticipated mortgage hikes,” says Diane Scott, president of CREB®. “We believe there are a number of factors contributing to this marked slowdown including a declining number of first-time homebuyers in the market, a rise in monthly carrying costs as mortgage rates rise and to some extent market jitters in the wake of Greece’s financial crisis,” says Scott.
“Consumers are feeling a little nervous about the recent instability of the stock markets—and with mortgage rate hikes behind us, it’s understandable that feelings of urgency among buyers have lessened,”adds Scott.
The average price of a single family home in the city of Calgary in May 2010 was $483,240, showing an increase of 5 per cent from April 2010, when the average price was $460,378, and showing an increase of 11 per cent from May 2009, when the average price was $436,427. The average price of a condominium in the city of Calgary was $304,662, showing a 5 percent increase from April 2010, when the average price was $289,588 and an 11 per cent increase over last year, when the average price was $275,212. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods,or account for price differentials between geographical areas.
“Our inventory is shifting to higher price points as move-up buyers enter the market. This has resulted in an overall boost in average price,” says Scott. “Nonetheless our days on market year-over-year has decreased—suggesting that competitively priced homes are selling.”
The median price of a single family home in the city of Calgary for May 2010 was $420,000, showing a 1 per cent increase from April 2010, when the median price was $417,000, and an 8 per cent increase from May 2009, when the median price was $390,000. The median price of a condominium in May 2010 was $279,900, showing a 5 per cent increase from April 2010, when the median was $267,500. That’s up 10 per cent from May 2009, when the median price was $255,000.
All city of Calgary MLS®statistics include properties listed and sold only within Calgary’s city limits. The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period oftime. During that time, half the buyers bought homes that cost more than the median price and half bought homes for less than the median price.
Single family listings in the city of Calgary added for the month of May totaled 2,966, a decrease of 4 per cent from April 2010 when 3,082 new listings were added, and showing an increase of 33 per centfrom May 2009, when 2,235 new listings came to the market. Condominium new listings in the city of Calgary added for May 2010 were 1,221, down 9 per cent from April 2010, when the MLS®saw 1,335 condo listings coming tothe market. This is an increase of 22 per cent from May 2009, when newcondominium listings added were 998.
“I believe this recent decline in sales is the result of an unsmooth transition from a first-time buyer market to a move-up buyer market. And it is likely that investors who waited out 2009 are now listing second homes and condos—giving an added boost to our inventory,” says Scott.
“Nonetheless our economic fundamentals,including employment and net migration, seem to be building momentum and Canada’s overall outlook is positive. These steady improvements should offer some stability to Calgary’s housing market as we enter the second half of 2010,” adds Scott.