Buyers Facing Bidding Wars on Home Turf

Posted by Alan Zunec on Monday, March 10th, 2014 at 6:28pm.

So you’re in the market for a home in Calgary? Well, be prepared to sharpen those bidding pencils in what is now a real estate market that vastly favours the sellers. The Calgary Real Estate Board, or CREB, noted that single family homes this past February were only on the market for an average of 29 days. That is far less than the 37 day average seen in February of 2013.  Condominiums went from 45 days to 33 and townhomes, the fastest sellers on the market, went from 38 to 28 days.

   

Benchmark prices were also up in three home categories. Single family homes came in at an average of $482,000 per home, compared to $442,500 seen last February. Apartment style condos were going for an average of $283,400 compared to last year’s $252,900. Townhouse style condos were averaging $309,700 compared to $289,300 seen in February of 2013.  Last month also saw 1,854 homes change hands, an increase of 8.68 percent from the same month in 2013. Single family homes were in short supply, enough to hold their increasing sales numbers to 1.9 percent over last year.

That lack of single family home availability continues, at least in the more affordable price points. First time buyers and others are turning to the condo market if they are looking for something priced under the $300,000 mark. So far more than half the condos coming on the market this year are below that price point. In the first two months of this year condo and townhome sales have grown by 28 percent compared to the same time period in 2013. Condo and townhome listings were also up, 17 percent and 28 percent, respectively.

Luxury home sales were also in record territory for February of this year. Sixty-six properties valued at more than $1 million changed hands, breaking the previously held record of 63 from February of 2013. Total sales for all property types for the first two months of 2014 totaled $1.56 billion, topping the $1.3 billion seen last year.

Agents are anticipating a busy spring season, with listings increasing and upping the sales numbers even more. Prices are expected to hold strong. Already some 20 percent of MLS® listed homes in Calgary are going for above their asking price.

Some 34 percent of Canadian homebuyers ended up in a bidding war, according to the latest Home Buying Report from BMO. Toronto and Vancouver saw the greatest number of bidding wars, 44 percent and 41 percent respectively. Alberta as a whole came in at 30 percent with Calgary at 39 percent. Just how much these bidding wars are affected by homeowners under pricing their homes depends on the location. In Toronto about 22 percent of homeowners use this strategy. Across the Prairie Provinces the average is 24 percent. Nationwide it averages 15 percent. Despite these tactics the average price of a home nationwide is roughly $400,000.

Calgary remains the strongest player in Canada’s real estate market. A lack of inventory is helping to drive the prices up but a lot of it comes from the healthy economy and readily available, well-paying jobs. Those in this part of Canada have more bucks to play with in the real estate bidding wars.

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