(Source: Troy Media, reprinted with permission)
Calgary was the epicentre of housing “bubble” chatter just over five years ago, but after an initial sharp dip and slight rebound following the recession, average residential resale prices remained flat.
Finally, however, there are some signs of growth going into this spring selling season.
According to the Calgary Real Estate Board (CREB), the MLS Home price index in April increased 5.5 per cent over this time last year, hitting an average benchmark price of $449,500. Given the strong economic growth in the region over the year, the slight bump in prices may even be considered moderate, given what’s occurring elsewhere in the country.
What was more surprising was the gain recorded in sales, with year-over-year activity increasing a whopping 26 per cent. A large reason why the price jump only rose 5.5 per cent, given the jump in activity, was the increased ability to absorb new demand. The boom years led to a large build up in inventory, exactly what you’d expect when prices more than double in a short timeframe.
Even with the boom in sales activity, one can make a case that the market is only now coming back down into a more balanced position. One way of measuring supply and demand is to look at the inventory to sales ratio. A ratio near three means that for every house sold there were three on the market (a ratio between two and three is considered to be in relative balance).
Slowly but surely, Calgary’s real-estate market is getting some of its mojo back, even if it doesn’t mean a return to wild boom years.
| ATB Financial