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Summer 2010: First-time homebuyers retreat as luxury buyers advance

July 9th, 2010
Screen shot 2010-11-09 at 9.58.06 AM Calgary, July 2, 2010 – Calgary home sales continued to show a marked year-over-year decline in the month of June, according to figures released today by the Calgary Real Estate Board (CREB®).

The number of single family homes sold in June 2010 in the city of Calgary was down 42 per cent from the same time a year ago, and condominium sales saw a decrease of 40 per cent from the same time a year ago.

June 2010 saw 1,061 single family homes sold in the city of Calgary. This is a decrease of 16 per cent from 1,262 sales in May 2010. In June 2009, single family home sales totaled 1,837. The number of condominium sales for the month of June 2010was 445. This was a decrease of 14 per cent from the 518 condominium transactions recorded in May 2010. In June 2009, condominium sales were 738.
Conversely, sales of million-dollar-plus properties jumped by nearly 42 per cent year-to-date until the end of June, compared with the same period a year ago.

“We are seeing continued moderation in Calgary’s home sales in the face of higher mortgage rates, increased inventory levels and a decreasing number of first-time homebuyers entering the market,” says Diane Scott, president of CREB®. “Our sales trends in June reflect much of what we saw in May. Changes to mortgage rules meant a good portion of homebuyers wanted to get in before the new regulations took effect in April. This, along with rising interest rates on the horizon, pulled forward sales we might have expected in May and June.”

The average price of a single family home in the city of Calgary in June 2010 was $481,964, showing no significant change from May 2010, when the average price was $483,240, and showing an increase of 8 per cent from June 2009, when the average price was $447,142. The average price of a condominium in the city of Calgary was $292,238, showing a 4 per cent decrease from May 2010, when the average price was $304,662 and a 2 per cent increase over last year, when the average price was $285,595. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods, or account for price differentials between geographical areas.

“The one market that seems to be bucking this moderating trend is the luxury or higher-end market,” notes Scott. “Calgary home sales continue to shift to higher price points. This has resulted in our average price holding firm. Homes in the higher price range have performed well and account for a larger portion of sales as move-up buyers enter the market. In the first six months of this year, 187 single-family homes in the city of Calgary sold for $1 million or more, compared with 132 in 2009.”

The median price of a single family home in the city of Calgary for June 2010 was $418,900, showing no significant change from May 2010, when the median price was $420,000, and a 5 per cent increase from June 2009, when the median price was $399,000. The median price of a condominium in June 2010 was $269,900, showing a 4 per cent decrease from May 2010, when the median was $279,900. That’s up 2 per cent from June 2009, when the median price was $265,500.

All city of Calgary MLS® statistics include properties listed and sold only within Calgary’s city limits. The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period of time. During that time, half the buyers bought homes that cost more than the median price and half bought homes for less than the median price.

Single family listings in the city of Calgary added for the month of June totaled 2,733, a decrease of 8 per cent from May 2010 when 2,966 new listings were added, and showing an increase of 22 per cent from June 2009, when 2,244 new listings came to the market. Condominium new listings in the city of Calgary added for June 2010 were 1,084, down 11 per cent from May 2010, when the MLS® saw 1,221 condo listings coming to the market. This is an increase of 17 per cent from June 2009, when new condominium listings added were 927.

“We had an impressive housing recovery in the late spring and summer of 2009. As expected this rate of recovery will moderate in the latter half of 2010 in the face of rising mortgage rates and slowing demand—keeping Calgary’s housing market in balance,” says Scott.

“Nonetheless the economic outlook for Calgary and for Canada remains upbeat and should ensure consumer confidence remains in positive territory for the balance of 2010,” adds Scott.

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