Home prices continue downward slide - Calgary October

水管工

Glut of single-family homes crowds market
, p7 W# h; u& S2 tMario Toneguzzi, Calgary Herald
: _8 ]) F2 K1 O* F& J1 Q% kPublished: Friday, November 02, 2007
The average price of a single-family home in Calgary has dropped for the third consecutive month and in October was more than $53,000 less than it was in July when it hit a record $505,920.

3 z: F$ d  J/ O$ T) Y9 vThe number of active listings in the city remains high and is the biggest factor affecting the local real estate market, said Ted Greenhough, of Re/Max Realty Professionals.

"Prices have come off in my mind 10 to 15 per cent in most parts of the city," he said. "It's going to take a long time to get out of this high inventory situation.
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So I would expect the market to remain relatively depressed for the next few months."

Data released Thursday by the Calgary Real Estate Board showed the average sale price of a single-family home in October in Calgary metro was $452,254.

/ k. g' I( z# kAt the end of August, the average sale price for a single-family home in Calgary was $485,914, and it was $470,888 at the end of September.
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9 Z) W3 _+ W) TWhile single-family home prices are declining, average sale prices of condominiums increased to $331,617 in October from $321,614 in September. In October, three condos sold for more than $2 million, including one for $4 million.
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Gary MacLean, with Re/Max Real Estate Central, said the ratio of sales compared with inventory at the end of the month equalled one sale for every listing in March and April in the Calgary area market, which includes metro and surrounding towns. Since then, he said, the ratio has deteriorated considerably. At the end of October, it stood at one house selling for every 5.12 on the market.
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/ o( w9 ^" v" i* cTotal inventory of properties for sale at the end of October was 9,962, which includes condos and single-family homes in Calgary metro and surrounding towns.

3 V; s- @% {/ zGreenhough said the number of listings is a great buying opportunity for people in the market for a new home. In Calgary metro, month-end inventory for the single-family market was 5,517, while for condos it was 2,329.

# J; o: o$ d" X4 u. t"It's not going to stay this way forever. I think we'll work our way out of it eventually. The underlining economic factors in this city are still very, very strong, and we should pull out of it, but it's not going to happen next month. It's going to take a little while," he said.

Single-family Calgary metro sales for October (1,113) decreased by 10.3 per cent from October 2006 (1,241) and new listings were up 2.9 per cent from a year ago -- 2,586 compared with 2,513.
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Condo Calgary metro sales for October (501) went down by 6.4 per cent compared with October 2006 (535) while new listings were up 13.2 per cent from a year ago -- 1,203 compared with 1,063.
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& a: T6 }# D! Y, @3 I5 y( Y% WSales in October were marginally ahead of September (4.6 per cent), said Ron Stanners, president of the Calgary Real Estate Board.

"That's a good sign. That reflects some confidence in the marketplace," he said.

: Z$ m1 t9 p, F2 O' r$ ?; C, q3 i"It's good for Calgary if our prices come down a little bit. It will attract more people to the city," he said. "Price-wise, we're still ahead of where we were last year. To me, that makes it still a seller's market.

8 a( j, Z" p: m/ V% t& ~4 N1 b9 a$ Z/ W"From a buyer's perspective, they have a large inventory to choose from again. They can pick and choose what they want, take their time and find their dream home. This should be a win-win for everybody."

The single-family average sale price in October was
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6.7 per cent higher than the $423,870 in October 2006 while the condo average sale price was 14.12 per cent more than the $290,487 a year ago.

" R) t* s) i/ w7 K/ ]9 [Bob Truman, a realtor with First Place Realty, said the October MLS numbers indicate there is plenty of choice in the local real estate market for potential buyers.

+ [2 S# J& ~5 o5 K# t$ Y/ A2 W"Buyers are not motivated because there's too much to choose from," said Truman. "Now the jury's out on what's going to happen over November, December. Last year, the listings really dropped in those two months and sales really started picking up. We don't know if that's going to happen this year because there's probably 40 per cent more listings this year than there was last year."

  T( y. i! x. M. l, s; Q4 t+ FHe said if people see the active listings start to drop, more people will be motivated to buy houses.
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If the listings stay high, he said he expects the prices will fall some more.
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"I think it's the case of the pendulum swinging too far to one side and then swinging too far back the other way," said Truman. "And we haven't found that equilibrium yet, which I think is going to come next year with a very normal market that really doesn't go up or down. It went way too crazy over the last two years and people get caught up in the panic of it all. And now it's going the other way."

For those selling their homes at this time, Greenhough said the biggest factor is the house must be priced to sell.

"Just pricing the house fairly is not going to cut it in this market. It's got to look like a good deal because there are plenty of good deals out there for buyers to choose from," suggested Greenhough.

The second factor is differentiating a property from the thousands of other properties that are on the market.
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6 D1 A3 p4 ]$ O3 Qmtoneguzzi@theherald.canwest.com
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3 r7 h% b3 b3 ?1 x/ hOCTOBER MLS SALES Average Number New sale price of Sales listings Single-family $452,254 1,113 2,586 Condominiums $331,617 501 1,203

Source: Calgary Real Estate Board