Dec 15, 2010, Calgary MLS sales decline by 25 in November

Residential MLS sales in Calgary fell by 25 per cent in November compared with a year ago – far eclipsing the pace of decline at the national average.

The Canadian Real Estate Association said Wednesday that total MLS sales, combining all single-family homes and condominiums, dropped to 1,427 last month in the city from 1,902 in November 2009.

Also the average MLS sale price in Calgary fell by 0.6 per cent from a year ago, dropping to $398,619 from $401,201.

“Resale activity throughout most of 2010 has been moderating,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp.

“In 2010 there have been a number of factors that contributed to the decline in sales including a slow return of full-time jobs, modest growth in wages, changes to the mortgage qualifying criteria, some uncertainty regarding housing prices and weaker net migration leading into this year. In addition, the prospect of rising interest rates in the beginning of year had also brought forward some sales.”

However, he said the city is beginning to see some signs of improvement as the downward trend in sales is starting to flatten out.

CREA said at the national level sales were down 9.3 per cent over the year, falling to 32,947 in November from 36,330 while the average sale price increased by 2.0 per cent to $344,268 from $337,392.

But CREA said sales activity rose in November for the fourth consecutive month on a seasonally-adjusted basis. It climbed 4.8 per cent.

Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of Canada’s 10 most active markets. Month-over-month increases were reported in Calgary (2.6 per cent), Edmonton (6.9 per cent), Fraser Valley (10.5 per cent), London and St. Thomas (6.5 per cent), Montreal (8.2 per cent), Ottawa (4.2 per cent), Toronto (6.0 per cent), and Greater Vancouver (11.3 per cent).

“Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy,” said Gregory Klump, chief economist for CREA, in a news release.

“Changes to mortgage regulations earlier this year were prudent and sufficient, striking the right balance between preventing speculative housing market activity and keeping home ownership affordability within reach for creditworthy home buyers. That’s a good thing, since housing activity helped support Canadian economic growth this year. Rising interest rates and weaker expected job growth are likely to contribute to softer prospects for housing market activity and average price growth next year, reflecting weakening economic growth prospects.”

Recently, the Calgary Real Estate Board said single-family home sales in the city in November were down by 18.6 per cent from last year to 891 transactions while the average MLS sale price dropped by 1.9 per cent to $455,460. In the condo market, the 310 sales in the month were 38.4 per cent lower than a year ago while the average price of $284,667 had decreased by 3.3 per cent.

“We are not likely to see any major dips in pricing over the coming months, but there may be some decline in our average and median prices as motivated sellers reduce their price, and we work through our increased levels of inventory,” said Diane Scott, CREB’s president, of the November data.

“The good news is that we are seeing a downward trend on our overall inventory levels and our absorption rate is gradually improving.”

According to the website of realtor Mike Fotiou, of First Place Realty, month-to-date up to and including Tuesday, there have been 382 single-family home sales in Calgary for an average MLS price of $436,320 while there have been 179 condo transactions for an average of $295,635.

By Mario Toneguzzi, Calgary Herald