By Mario Toneguzzi, Calgary Herald September 2, 2010
An increase in active listings, combined with a cooling in housing demand, has started to push prices down in Calgary's residential real estate market.
Data released Wednesday by the Calgary Real Estate Board show single-family home sales fell by just over 32 per cent in August compared with a year ago while condominium transactions plunged by more than 42 per cent.
And the average MLS sale price in both markets dropped from what they were in July.
"If (buyers) don't have to buy they're just not doing it right now. There's just too much unrest," said CREB president Diane Scott.
"We know the traffic in the open houses has picked up in the last two weeks. We've been monitoring it very closely and the traffic is there, but the buyers are just a little leery."
Scott attributes that cautious sentiment to negative economic news and reports continuing to come before the public which create plenty of uncertainty in the marketplace.
"It's the economic situation that we happen to find ourselves in and the negative reports that keep popping up and buyers are kind of standing back, thinking it's going to go down lower," she added.
According to CREB, there were 867 single-family home sales in the city in August, down from August 2009's 1,277 sales and slightly down from the 915 sales recorded the previous month.
The average MLS sale price for a single-family home fell to $445,617, down 4.1 per cent from July and also off 1.9 per cent from a year ago. The year-over-year decline was the first month since July 2009 in which single-family home prices were lower than the previous year.
In the condominium market, sales dropped from last year as 364 properties were sold in Calgary for an average price of $286,384. The average price decreased by 1.6 per cent from July, but was up 1.1 per cent from August 2009.
"The rise in mortgage rates, more prudent lending practices and weaker net migration has contributed to the decline in sales," said Richard Cho, senior market analyst for Calgary for Canada Mortgage and Housing Corp. "In addition, the pent-up demand that helped fuel sales activity earlier in the year has also eased.
"In the last several months we have seen an uptick in the number of homes being listed on the market, providing consumers more choice and time. This, combined with the moderation in sales, has moved the market into buyers' conditions, softening price growth."
The month-end inventory of single-family homes for sale was 5,046 at the end of August, up from 3,296 in August 2009.
The month-end inventory of listings in the condo market was 2,255 in August, increasing from 1,479 last year.
Scott said the elevated level of listings plus the slowdown in sales is bound to have an impact on the average sale price.
The monthly peak for MLS sale prices was in May this year with single-family homes selling for an average of $483,240 and condos selling for $304,662.
"It's a downward type of trend. It's certainly not drastic but it is downward that I think we're going to see probably for the rest of the year," said Scott. "I think we'll have a little bit more activity as for the number of sales in September. Typical. It's seasonal and I think we'll see that in September."
In the MLS market of towns outside Calgary, sales dropped by just over 23 per cent to 312 from 406 a year ago and the average sale price increased by 0.3 per cent to $355,238 from $354,175.
The country residential market, which includes acreages, saw sales decrease by just under 17 per cent to 50 from 60 in August 2009 while the average sale price dropped by just over two per cent to $747,580.
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Calgary Home Sales Continue To Slide
Read more: http://www.calgaryherald.com/health/Calgary+housing+sales+tumble/3472287/story.html#ixzz0yyMrfLrE
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