According to the spring 2012 RE/MAX Market Trends Report, released today by RE/MAX, major Canadian real estate markets continued to show exceptional resiliency throughout the first quarter of 2012. The stage is set for a heated spring 2012!
While activity in Calgary’s residential real estate market mirrors 2011, one factor is decidedly different—consumer confidence is once again on the rise. Although the ascent remains slow and cautious, demand has increased for all types of residential housing, most notably in mid-to-late February. As a result, unit sales in the city are up nearly four per cent, with 2,806 homes changing hands to the end of February, compared with 2,707 homes during the same period the previous year.
Some multiple offers have occurred in the inner core’s most desirable areas. Yet, very few homes are selling over list price, although sale-price-to-list-price ratios are starting to improve. Days on market remain relatively stable at approximately 50. The rising momentum in the marketplace has been attributed, in part, to buyers re-entering the market, after months of sitting on the fence. Many are more mature purchasers who are thinking long-term, taking note of good pricing and unprecedented interest rates. While conditions remain balanced overall, the supply of entry-level homes on the west side is tight. Product priced under $400,000—and located in good neighbourhoods—is generally moving very well throughout the city, as first-time buyers continue to lead the charge.
Activity has climbed at virtually all price points, up to and including the $1 million range. Turnkey homes, with realistic sticker prices, are in greatest demand, as buyers are reluctant to spend additional money on major renovations. Most are willing to wait for the right properties to come on-stream.
Rowhouse style townhomes are particularly popular, with sales of condominium towns ahead 10 per cent year-over-year (331 units vs. 300 units). Single-family homes have also experienced an upswing of six per cent (2,048 vs. 1,940), despite a nine per cent decline in new listings compared to one year earlier. Average price has stabilized and is returning to an upward, albeit very modest, trajectory, with the exception of the condominium apartment segment which remains off 2011 levels in both sales and pricing. Calgary’s total residential average price now sits at $412,300, up over $1,000 compared to 2011. The upper end of the market has held up well in all segments, with 58 home sales over $1 million vs. 61 last year (February year to- date). All indicators point to a healthy spring market, as activity continues to gain momentum. Prices are once again heading into positive growth territory, although trending will remain modest in the months ahead.
The tides of optimism are turning, which bodes well for Calgary’s residential real estate market moving forward.