Any notion that the heightened activity in the beginning of May was just a blip can be tossed aside. Sales remained strong in the second week and are still on track to post the highest May total ever.
Overall sales were up 22.70% from the same period last year, and 2.6% ahead of 2006’s pace which has the highest May month-end tally.
There are key differences from the market today to the panic ridden buyer’s frenzy eight years ago as I’ve outlined in previous updates.
Let’s focus on the supply angle, of which there is a lot more available today. In the case of single family homes, there were more than double the amount of homes for sale to begin this month than we had to start May 2006. 146% more to be exact.
Whether looking at the sales-to-new-listings ratio or at the inventory absorption rate, market conditions were a whole lot tighter in the spring of 2006.
The increased selection means there are fewer bidding wars and reduced price escalation compared to eight years ago.
Consider this: in May 2006, the average price for Calgary overall spiked 45% to $372,383 from $256,511 the previous year. Likewise, the median went from $226,900 in May 2005 to $334,500 a year later, a 47% increase.
We simply aren’t experiencing that sort of price growth today – thankfully. The median price across all three categories MTD is showing annual gains at ~6%. Still, I would like to see that ease back by a few percentage points.
Earlier this month, I was quoted saying that “if the previous two years are any indication, this May will be another busy month for the luxury market.” Okay, okay, so I didn’t exactly go out on a limb with that prediction. 😉
With 43 properties selling for $1M+ in the first two weeks of May, we’re on track to set not only a new monthly luxury sales record but an all-time record too.