Calgary’s housing market is performing exceptionally well today, but we are nowhere near the frenzied level from 2006 (Wow…I can’t believe it’s been 8 years already)
A lot was different back in 2006. You could assume a mortgage in Alberta without even having to qualify for it. That year, in response to its private-sector rivals, CMHC extended amortization lengths to 30-years, 35-years and finally 40 years. CMHC also began offering insurance on mortgages that covered 100% of home prices, or in other words, no down payment was required from buyers.
Even though interest rates were higher then, the relaxing of the mortgage rules suddenly raised the price ceiling of what buyers could qualify for.
Comparing 2006 Market to 2014
In February 2006 there were 2,601 sales or 40.3% more sales than the 1,854 this February.
In February 2006, 841 or 32.3% of homes sold above asking compared to 364 or 19.6% this February.
It may be hard to believe but there was even less inventory for sale then. There were only 826 single family homes listed in February 2006 compared to 1894 this year.
The sales-to-new-listings ratio in 2006 was at 96% which meant nearly a home sold for every one that was listed. Last month the ratio was “only” at 68% – still a seller’s market but not at extreme as back then.
Finally, housing was much less expensive. The average price in the City of Calgary in February 2006 was $316,531. Last month it was $482,530.
What differences or similarities do you note in the market from then to now?