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Rising Calgary resales reveal recovery signs Market may have finally bottomed out

By Marty Hope, Calgary Herald May 16, 2009

There is a feeling, just a niggling itch, among industry insiders that maybe Calgary's resale market has bottomed.Sales for the first four months of this year have done nothing but climb, prices appear to have levelled, and the gap between active listings and sales is narrowing.These are all solid signs the market may have hit the bottom of the economic trough and is beginning to scrabble its way up the other side.

"Have we bottomed? I think we have, at least in the low and mid markets," says George Bamber, broker/owner of Century 21 Bamber Realty Ltd. "As for the high end, I can't call that yet."After bottoming in December at 449 sales, the number of detached homes changing hands has climbed steadily, with 1,290 sales recorded in April by the Calgary Real Estate Board. As for condos, the climb has also been constant, moving from 205 in December to 579 last month.

"You know what's doing it? It's 3.5 per cent mortgage rates and the fact most people still have jobs," says Bamber. "We're seeing a renewed level of confidence by consumers and by the people in our industry. Things are just feeling better." While the average price is moving up month by month, it is still about 11 per cent lower than during the first four months of 2008, says the Calgary Real Estate Board.
Affordable prices and low interest rates are bringing buyers back into the marketplace, says board president Bonnie Wegerich."The average price remains below levels of a year ago, but the declines are contracting," she says. There is more of a balanced feel to the market than there was a few short months ago, she says. Bamber echoes the sentiment.
"I think the market is getting closer to being balanced--and quicker than we thought," he says.Also bringing the market back to a more balanced situation is the change in inventory levels from a year ago. For the first four months of this year, the month-end inventory of detached homes drifted in a range from 4,040 to 4,369. A year ago, it ran from 3,997 to nearly 6,900.
The story is the same for condos. This year, the number of multi-family homes available at the end of each month has gone from 1,923 to 2,065, compared to a range of 1,926 to slightly more than 3,200 in 2008. Gary MacLean, who works out of the Re/ Max Central office in northwest Calgary, has seen an improvement in the ratio of sales to active listings (month-end inventory of detached homes and condos) from January to April.
At the end of April, the ratio stood at one selling for every 3.95 on the market--a huge improvement from January, when it stood at one for every 10.21 on the market. "If this ratio stays the same or gets lower, it may mean we have seen the bottoming of this decline in home prices, but we will have to wait for several months to see," says MacLean. "People are still being very cautious, but we're busier than we were at the first of the year."Besides updating his sales to listings charts, MacLean also keeps a close eye on median prices, which have been on the decline for longer than you might expect.
The median is the middle of the range of prices.The single-detached home median in April of 2006 sat at $356,000, climbing to a peak of $439,000 in June 2007.By the end of last month, it had slipped back to $380,000. "Basically, we're back to 2006 prices," says MacLean. "Good value, unless you were one of the ones who bought in 2007."
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