Calgary, June 1, 2012 – May 2012 residential sales in the City of Calgary increased by 31.8 per cent over last year, to 2,385, making it the highest May activity since the recession.
“In the past month, easing concerns regarding Calgary’s long-term economic prospects combined with continued full-time job growth and low interest rates, has contributed to the rise in housing demand, pushing sales to levels more consistent with long term trends,” says Ann-Marie Lurie, CREB®’s chief economist. “However, we are not out of the woods in terms or economic risks, as recent indicators point towards weak growth in the U.S. economy and increased uncertainty in global markets.”
Demand growth continues to outpace supply in the single-family market. Monthly sales reached 1,710 units in May, resulting in year-to-date sales 19.1 per cent higher than the same period last year. While new listings recorded a year- over-year increase of 6.7 per cent, this did little to alleviate the supply constraint in the single-family market. Inventories totaled 3,842 in May, keeping months of supply in seller territory, with less than 2.5 months of supply.
“With less supply in the single-family market, buyers are making their decisions quicker,” says Becky Walters, CREB®’s president-elect. “As a result, we’ve seen a reduction in the amount of time homes stay on the market, and sellers are getting figures closer to their list price.”
The single-family benchmark price for the month of May 2012 was $427,500, a 6.7-per-cent increase over the previous year. Prices were expected to record modest gains this year and, while the increase is higher than expected, the single-family benchmark price remains 5.3-per-cent below the peak price of $451,400, reached in July 2007.
“While there have been some conflicting opinions on the national housing market, particularly with price expectations, the Calgary housing market does not appear to reflect either a boom or a bust scenario, and is simply returning to activity levels consistent with a normal market,” says Lurie. “The current low supply in the single-family market has pushed up pricing slightly higher than anticipated. However, sufficient supply in the remaining housing industry combined with economic uncertainty will likely prevent a repeat of the price jumps recorded in the not-so-distant past.”