Improved economic outlook and job prospects to be a bigger factor in the long-term
Calgary, April 1,2010 – Calgary’s housing market enjoyed a healthy boost in March as homebuyers anticipate an earlier than expected rise in interest rates, according to figures released today by the Calgary Real Estate Board (CREB®).
The number of single family homes sold in March 2010 in the city of Calgary was up 29 per cent from the same time a year ago, while condominium sales saw an increase of 37 per cent from the same time a year ago.
March 2010 saw 1,396 single family homes sold in the city of Calgary. This is an increase of 35 per cent from 1,035 sales in February 2010. In March 2009,single family home sales totaled 1,086. The number of condominium sales for the month of March 2010 was 609. This was an increase of 14 per cent from the 536 condominium transactions recorded in February 2010. In March 2009, condominium sales were 446.
“The spring market has come early to Calgary,” said Diane Scott, president of CREB®. “Improved economic conditions, better employment prospects, and an earlier than expected rise in mortgage rates are all contributing to this early boost in sales this year.”
“Undoubtedly the recent announcements by all our major banks to raise mortgage rates are motivating buyers to take the plunge,” Scott acknowledges. “But Calgary’s market remains in a healthy position and our sales are not out stripping supply.The rise in demand will also motivate sellers to consider listing this spring.”
“There has been some speculation that mortgage rate hikes will adversely affect housing demand in the long-term, but we should keep in mind that a rise in rates was fully expected. The Bank of Canada has been operating at emergency rates as a response to the global recession. While a rise in rates may tone down demand later this year, we don’t feel this adjustment will prevent the vast majority of buyers with healthy credit to enter the housing market,”said Scott.
“Ultimately improvements in employment and economic conditions will drive housing demand—Calgary’s economy has seen solid improvements in the first quarter of2010,” added Scott.
The average price of a single family home in the city of Calgary in March 2010 was $471,269, showing an increase of 3 per cent from February 2010, when the average price was $458,254, and showing an increase of 12 per cent from March 2009, when the average price was $420,354. The average price of a condominiumin the city of Calgary was $296,660, showing a 5 per cent increase from February 2010, when the average price was $282,880 and a 4 per cent increase over last year, when the average price was $284,056. 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.
The median price of a single family home in the city of Calgary for March 2010 was $423,000, showing a 3 per cent increase from February 2010, when the median price was $411,000, and a 13 per cent increase from March 2009, when the median price was $375,000. The median price of a condominium in March 2010 was $275,000, showing a 3 per cent increase from February 2010, when the median was $265,900. That’s up 6 per cent from March 2009, when the median price was $260,000.
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 of time. 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.
“Our average price has edged upwards as more move-up buyers enter the market and overall demand strengthens,” says Scott. “But this is not an unusual trend during a spring market. We expect this modest price growth to continue,but a rise in listings will likely curb this trend,” said Scott.
Single family listings in the city of Calgary added for the month of March totaled 2,988, an increase of 39 per cent from February 2010 when 2,154 new listingswere added, and showing an increase of 48 per cent from March 2009, when 2,023 new listings came to the market. Condominium new listings in the city of Calgary added for March 2010 were 1,376, up 24 per cent from February 2010,when the MLS® saw 1,109 condo listings coming to the market. This is an increase of 52 per cent from March 2009, when new condominium listings added were 903.
“Overall,Calgarians should feel positive about the housing market. Sales and price growth are in line with a more balanced and normalized market. We are seeing a return to stability and optimism in Calgary as we shake off our recessionary blues. Mortgage rates are just one factor in the housing equation—a more positive economic outlook and improved job prospects will play a bigger role in the long-term,” added Scott.