Depending on whether you’re comparing February to the previous month or to last February, you’ll have a different perspective of how the market performed.
Metro-Calgary Single Family Homes
SFH sales increased to 825, an increase of 50% over January’s sales. This was down 34% from last February when 1252 properties changed hands. Prices remained steady month-to-month, inching upwards slightly to an average of $415,568 (up 0.6%) with a median of $375,000 (up 0.1%) Year-over-year, both the average and median have dropped 12%. (From $471,696 and $428,000 respectively)
Metro-Calgary Condos
343 condo sales were recorded, a 52% rise over January’s sales. Again, this was down 39% from last February. Month-over-month, the average price dropped 0.7% to $268,971 while the median ended up 3% to $249,900. Compared to February 2008, the average price has dropped13% ($311,812) with the median down 15% ($295,000)
Inventory Absorption Rate
The Inventory Absorption Rate continued to improve month-over-month for both Single Family Homes (5.3 months) and Condos (6.0 months) A notable difference from last year is the month-end inventory - there’s 633 SFH and 236 fewer condos listed this time around. Even though inventory is lower, with fewer sales than last year, the absorption rate remains elevated over last February and continues to sit in a Buyer’s market. We’ll have a better idea of where the absorption rate is headed when we’re deeper into the spring months when historically the highest sales volumes and inventory levels converge.
You might wonder looking at the SFH Price Chart above and the Absorption Rate Chart below how the market peaked when it was supposedly in a “Balanced Market?” This was because preceding that, there was an extended period of limited inventory and high demand and momentum carried over into the few months the market was technically “balanced.”
Looking back at Total MLS Sales VS Total MLS Inventory for Calgary & Area, between April 2005 and December 2005, there was under 2 months supply. Between January 2006 and June 2006, there was under 1 months supply on the market. The Absorption Rate never surpassed 3 1/2 months between those periods, and up to summer 2007.
We know speculation was high these past few years in Calgary - so the question is, what are those investors doing with the properties they snatched up in 2007/2008? Speaking with a Property Manager this past week, many have turned to renting out their properties at a loss, covering the difference of the mortgage payments/condo fees out of their own pockets. Although the prospect of holding onto a property with negative cash flow isn’t appealing, some are waiting for the market to rebound before listing. Bear in mind, this is just anecdotal from one Property Manager. But looking at the sales prices of the past 2 years and what rents are currently, I would assume many find themselves in that same situation today.
For a further explanation as to how this stat is calculated, please click here
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Comparing the House Price Index to Calgary’s MLS® Statistics
There’s no doubt that Teranet’s House Price Index is excellent for tracking house prices since it uses ‘sales pairs’ to determine price increases/decreases.
December’s House Price Index showed a 7.62% decline year-over-year. December’s MLS® statistics showed the following year-over-year declines for Calgary:
SFH Average: -6.15%
SFH Median: -6.59%
Condo Average: -9.78%
Condo Median: -11.19%
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Last week on BNN was special as they had episodes dealing with the “New Real Estate Reality.” There was 21 segments in all- a lot of information: click here to view
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Calgary Land Transfer Tax Defeated
The City of Calgary has dropped its plan to introduce a land transfer tax originally proposed as an initiative to cover the costs of affordable housing.
On Monday February 23, 2009 the council narrowly squashed the consideration of a 1 per cent home buyers’ tax in a vote 8-7.
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UPDATE: March 5th
click to enlarge
If you have any questions or are interested in buying or selling real estate, feel free to contact me.
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Mike Fotiou, First Place Realty, is a licensed Realtor, Certified Condominium Specialist, Accredited Buyer’s Representative and Commissioner for Oaths in the Province of Alberta.
