Calgary’s winter weather may be in sub-zero territory but the real estate market is hot, hot, hot. Sales of residential properties this December have topped the numbers seen in 2012. The city is fast becoming a strong sellers market with property sales outpacing the number of properties being listed. This is the first time since 2007 that Calgary’s real estate market favours the sellers.
Re/Max issued their Housing Market Outlook 2014 report this past week and noted that multiple offers began to make their appearance in 2013 and are becoming more frequent. This is particularly true in the single-family home market, creating a competitive edge that is likely to increase prices. Well priced properties are selling well, often for more than their asking price. But buyers are being more cautious than back in the 2007 boom days. While buyers generally have to pay more for homes, they aren’t bidding themselves into ridiculously high price wars as seen previously. Tightening the mortgage rules, particularly the last go round in 2013, seemed to inject a sense of reason into the process.
Prices are noticeably up. For example, in the townhome market, a property that averaged $300,000 per home last year is now selling for roughly $325,000. During 2013 all property levels were seeing an increase in activity but it is in properties prices less than $500,000 that the price increases are most notable. Those properties in the $500,000 plus category are in a more balanced market. Those homes prices between $350,000 and $490,000 are seeing the most competition. The exception is the luxury home category, those priced at $1 million or more, which have exceeded sales expectations and are also in seller’s market territory.
What Does 2014 Hold?
With listing numbers on the low side, as Calgary enters 2014 it’s likely the market will mirror that of early 2013. Many people pull their properties if they aren’t sold by the end of December, possibly to relist later. The market typically starts to see listings add up towards the end of January. It is basically too early to tell but so far realtors think the inventory levels will be at around the 4,000 mark. The Calgary Real Estate Board believes that that city will see a 3.6 percent increase in sales numbers with the price points up by 4.3 percent.
Re/Max believes that it will be the upgrade home buyers that will be the engine behind the real estate market in 2014, at least early on. As they trade up to more deluxe properties, that opens opportunities for starter home buyers. Other factors affecting the market will be location, access to public transport and being within easy reach of downtown and schools/universities. Central core properties are particularly sought after as new buyers tend to want homes near work, shops and entertainment venues. Seniors also are looking at downtown condo or apartment living as they downsize and simplify their lifestyle.
The low vacancy rates in the rental market will also spur interest in entry level home ownership. With Calgary’s impressive job market people are still coming to take advantage of the opportunity. Most will be renting, at least for a time. At least that’s been the scenario. Those that can afford to buy right away, or within a few months of arrival, will most likely do so. It’s just more cost effective.