Calgary resale housing market gaining steam

24 consecutive months of year-over-year price gains         By Mario Toneguzzi, Calgary Herald January 31, 2014

CALGARY - The momentum in Calgary’s resale housing market continued to gain steam in January with increasing MLS sales and prices reaching record levels.

The hot city residential real estate market will register in January its 24th consecutive month of year-over-year average MLS price growth as well as the 10th consecutive month of year-over-year sales growth.

Sales in January will be the highest for the month since 2008. It will also set a record for the average sale price and the median price for the month of January. Also, earlier this week, the market surpassed the previous January record of 36 luxury home sales of over $1 million set in 2007.

“Calgary’s real estate market is on track for solid growth once again this year, continuing the trend that has prevailed over the past 24 months,” said Stephanie Barber, a realtor with Discover Real Estate in the city. “I expect the number of home sales will continue to grow in 2014 given that the outlook for the jobs sector is to remain vibrant and Calgary’s population is forecast to increase by roughly two per cent.
"In addition to a resilient jobs market and net migration, other factors that should propel home prices higher in 2014 are the limited rental supply, low inventory levels and attractive interest rates.”
According to the Calgary Real Estate Board, month-to-date until Thursday, there have been 1,343 MLS sales in the city, up 16.38 per cent from the same period a year ago. The average sale price has increased by 5.02 per cent to $461,032 and the median price is up by 6.55 per cent to $415,000.
“I truly believe that inner-city real estate, neighbourhoods surrounding the downtown and within the core itself, should see the largest price increases in the coming years as people’s mindsets continue to shift towards lifestyle,” said Barber.

“Most of my clients are young professionals that work and play in the core and place a premium on their limited free time. They really value the convenience and access the inner-city communities offer over Calgary’s suburban neighbourhoods.”
Don Campbell, senior analyst with the Real Estate Investment Network, said very low vacancy rates are driving rents up quickly and this is pushing the purchase decisions sooner than is the normal trend for first-time homebuyers and recent migrants to the city.

“This purchase demand continues to grow, while listings remain low,” he said. “One big factor playing into this is the continued fallout from the floods (in June) as some banks and insurance companies are deciding that there are some neighbourhoods that they would rather not service - either not issuing mortgages or not issuing insurance coverage. This pushes demand into other regions of the city. So although listing numbers seem to be relatively flat, the reality is that a number of those homes exist in these zones of exclusion.”

He said economic confidence continues to be strong in Calgary, in general, and this always leads to consumers buying homes just a little more expensive than they would if the economy was operating at normal levels.