Calgary’s home prices continue to climb in September

Another article showing that the underlying fundamentals of continued in-migration and job growth – of quality jobs – supports the Calgary home market.

Calgary housing market sizzles in September

 MLS sales and prices continue to climb

CALGARY — Calgary’s red-hot housing market continued to sizzle in September as MLS sales and prices followed an upward trend.

According to the Calgary Real Estate Board, total MLS sales in the city of 1,923 during the month were up 19.44 per cent from a year ago.

The average sale price rose by 8.27 per cent to $454,352 while the median price was up 8.78 per cent to $402,500.

Calvin Buss, involved in real estate marketing and sales, said job creation and in-migration are fuelling the current market.

“The international in-migration is getting stronger and stronger. And if you look at the number of people that came out of Ontario over the last six months into Alberta, it’s just staggering,” said Buss who has his home for sale in Edworthy Park at $4.49 million. The home is situated in the middle of a forest overlooking the Bow River and the downtown.

“In Calgary we have a tight market. We’ve had good markets over the last two years. And that’s tightened everything up. And then you get all that in-migration coming based on jobs. You start to get things really tightening up. Like the vacancy rate downtown doesn’t have any elasticity to help absorb these people so they’re forced into the marketplace. And the marketplace only has a certain capacity.”

Calgary is in a sellers’ market which is good news for people like Buss who have their homes for sale.

In September, there were 2,796 new listings in the Calgary market, up 4.33 per cent from a year ago but active listings at the end of the month were down by 23.08 per cent to 3,922.

Scott Bollinger, broker for the ComFree Commensense Network, said the jump in prices isn’t too surprising when you look at the underlying factors, which include a tight inventory, a close-to-zero-vacancy rental market converting many would-be renters into potential buyers, and the fact the economy’s humming along.

“What is a little surprising is that the numbers of new listings aren’t keeping pace with big jumps in prices and sales,” said Bollinger. “I think Calgarians know this is a seller’s market. It has been for months. So that tells me that population growth and demand are simply outpacing supply. Speculators who sat for years on second and third properties, waiting for a hot market, have already sold.”

Days on the market to sell in September fell from 45 a year ago to 36, which represented a 20 per cent decline.

“The economy continues to support factors that are driving housing demand forward,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp. “Employment in Calgary has trended up, with many full-time jobs also created.

“Latest reports also show that net migration to Alberta has been strong as well. After two quarters, net migration in Alberta has increased over 40 per cent from last year. Sales thus far are up compared to 2012 levels, and that is not expected to change by the end of the year.”

Ben Brunnen, a Calgary economic consultant, said the local real estate market should perform well this fall with a favourable economic outlook, a tight rental market and strong population growth the key factors.

“Alberta has been one of the most resiliant economies in Canada, and this gives buyers confidence,” said Brunnen.

“At the same time, supply remains tight with limited inventory to meet demand and builders trying to catch up. For the economy as a whole, strong real estate prices give homeowners confidence, and this could help boost consumer spending in Alberta.”

CREB said single-family home sales in September of 1,354 were up 20.25 per cent from last year while the average price rose by 9.25 per cent to $512,359. Condo apartment sales increased by 17.39 per cent to 324 with the average price up by 4.38 per cent to $298,765. Condo townhouse sales were up 17.79 per cent to 245 while the average sale price increased by 2.95 per cent to $339,534.

“Tight market conditions have supported price growth in the Calgary market,” said Ann-Marie Lurie, CREB’s chief economist. “But the pace of unadjusted monthly growth has eased in September.

“While prices show strong year-over-year gains, if the level of new listings continues to improve relative to sales activity, prices should level off for the remainder of the year.”