Housing permabear and economist David Madani of Capital Economics is running out of excuses. Earlier this summer, in an interview with the Financial Post, he said that even a minor move in mortgage rates can have a dramatic impact on the market because marginal home buyers are sensitive to even moderate changes in monthly payments.
“[The market] has only pulled forward sales that would have happened later in the year,” said Mr. Madani, believing that homebuyers rushed into the market simply to beat the rising mortgage rates. He portrayed the summer bump in sales as simply “a last gasp” before the market cooled for the rest of 2013.
Phil Soper, chief executive of Royal LePage Real Estate Services, disagreed, saying consumers have been hearing that rates are going up for too long and are now immune to the chatter.
Who was right? Well here we are in November, “later in the year” as Mr. Madani would say, the period where the housing market should have already shuddered and exhaled its last breath. How is the Calgary market performing?
It’s anything but dead.
Home sales are up an impressive 39.56% year-over-year in the first week of November. It’s the best start to the month since 2006. The sales to new listing ratio has climbed even higher and is now at 82.12%
The luxury market isn’t showing any signs of letup either. Twenty homes have already sold for a $1M or more. The November record was set last year with a total of 48 high-end sales, and there had been only 5 transactions in the first week.
When you’re looking at the average price in the stats summary below, be sure to take the surge in luxury sales into account.