A brief economic report from ATB Financial had this to say about the Calgary housing market on Friday:
Spring is the busiest time of year for housing activity and is therefore the best time to gauge the health of the housing market. According to data released by the Calgary Real Estate Board, the home market in Alberta’s largest city is not great, but not bad either.
The median sales price of a home in Calgary rose to $369,000 in April, up from $360,000 in March and the highest level since spring of last year (see graph). Despite the move higher in prices, sales activity was somewhat lacklustre with 2,176 MLS sales, down from 2,347 in March and 2,448 in April of last year.
The drop in sales and the rise in prices taken together indicate that Calgary’s housing market is on a solid footing, but is not strongly in favour of either buyers or sellers.
Moving forward, it is going to be very interesting to watch the Calgary and broader Alberta housing markets. Interest rates, which are expected to start rising over the next few months, will definitely put downward pressure on Canadian housing prices; however with solid economic fundamentals pervading in Alberta, it is hard to imagine that prices will slump too far.
While I agree the market is “not great, and not bad either“ (the only saving grace being lower supply to offset the meager sales), I don`t agree with the conclusion that “drop in sales and the rise in prices taken together indicate that Calgary’s housing market is on a solid footing.“
For my thoughts on 2011 CREB`s forecast back in January I stated that, “I can see an average price increase for 2011, providing overall sales are weak and the luxury segment remains steady.“ That wasn`t my basis for suggesting that if that happened, the market was on solid footing.
Single family home sales in the first week of May were up 21% from the same time period in April but were down slightly from May of last year. Condo sales were down month-over-month and from the previous year.
After a brief uptick to end the month of April, pending sales have settled back to 2010`s levels. We`ll need to see pending figures trend consistently above last year if we are to expect an increase in sales YoY.
In May of last year, buyers retreated en masse and sales dried up. Can we expect the same of this year, or will activity slowly ramp up during the second half of the year?
Condo sales are keeping a steady (yet subdued) pace – if this continues we might see 2011`s sales levels gain some ground over last year in the coming weeks ahead. It really all depends – will spring really be the busiest season this year for the Calgary real estate market? If so, it`s going to be another slow year…