October 1-7, 2013 Calgary Real Estate Market Update

Calgary home sales have increased between September & October in 6 out of the last 9 years. Early indications are hinting that this year we’ll see that statistic change to 7 out of the last 10.

A total of 445 homes sold in the first week of October, an 11.25% increase from September and up 17.72% year-over-year. In fact, it’s the second best October start on record.

(click to enlarge image)

(click to enlarge image)

New Listings

In September’s month-end report regarding new listings, CREB stated:

As Calgary’s market remains in seller’s territory, a notable shift is occurring with new listings.

While monthly levels of new listings have been declining since 2011, over the past three months the levels of new listings have improved.

The growth was not enough to cause any significant changes in inventory levels, but it has helped prevent further tightening in the market.

New listings this month are tracking 3.4% higher than last year.  On the surface, this may seem like it will prevent further tightening and provide buyers with more choice.

But it’s not quite so simple, especially if it means renters are being displaced.

Landlords Cashing Out

Consider these  figures:

3,355 out of the 27,507 listings year-to-date have been tenant occupied/tenant rights (12.2%)

During the same period last year 2,594 out of the 27,668 listed had renters in place (9.4%)

In 2011,  2,377 out of the 29,306 homes listed between January through October 7th had renters (8.1%)

Despite fewer listings on the market, the number of landlords cashing out at these high price levels is increasing.

The tenants generally have 1 of 3 options

  • find another rental, further tightening the rental market (Global video: Rental market goes from bad to worse)
  • purchase a home themselves  (In some neighborhoods ownership makes more financial sense now than renting due to increased rents)
  • the new owner may be purchasing the home for an investment and the tenants can stay in place

Do you think this increase in rental property listings is because of the “accidental” landlords that were created in 2008 when prices fell and inventory skyrocketed finally have an out due to today’s price levels, or is it the “smart money” cashing out before the next correction?

CALGARY INVENTORY from 2008 to today

Calgary inventory levels since 2008

(click to enlarge)

(click to enlarge)

2 responses to “October 1-7, 2013 Calgary Real Estate Market Update

  1. At this point, Those people are cashing out who bought property at higher price in 2007 and 2008 and they are scared to keep it longer.

    But if you see in broad view, people who bought property before 2007 and those who bought from 2009 to 2012, I assume they are in better shape even property correction happen 10 – 15%.

    In last 15 month property price increased in Calgary around 10-11% then who care if some correction happen, landlord can enjoy rental income.

    Local migration and international immigration will keep rental market tight in Calgary. At this point inventory is low just chill out if you bought at right time.

    People who are talking about Calgary property price they better to see Toronto and Vancouver home prices, Calgary is still far behind from these cities

  2. The listings are the accidental landlords simplifying their lives.

    We are in the same boat, but things are going well. so we’ll continue to be landlords for many years to come.

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