Some Background

Just a few short years ago, Calgary’s housing market was perhaps the hottest in the house. It was almost as if property values doubled over breakfast in some areas! Newspapers were blazing with headlines indicating home price increases of $500 a day! Those who owned their homes were swimming in equity and life was good.

However, those not yet in the housing market were not so lucky. The cost of getting into a first home had increased by more than 50% in little more than a year. And to add insult to injury, rent prices in Calgary were going up quickly as well. It was so bad that the Alberta Government explored options to regulate and subsidize rents.

Throughout 2008, Real Estate prices across Canada started dropping. In Calgary, the worst of the price drops occurred in the last 4 months of the year. Calgary had turned into a true “buyers market.” At the same time prices were dropping, the Bank of Canada was slashing its rates as well, and this had a huge downward effect on both fixed and variable rates.

A Perfect Storm: Price and Rates are down

This year (2009) we have seen an unprecedented combination of lower house prices and the lowest interest rates in Canadian history. This combination helped create the perfect climate for a rapid rebound in our local Real Estate market. Now, in October, Calgary home prices have been showing signs of stability as recover in the housing market has begun to take hold.

Market Recovery unfolding

According to the Calgary Real Estate Board the average price of a single family Calgary home in September 2009 was $459,085. This is a 3% increase over September 2008.

Dianne Scott, president elect of the Calgary Real Estate Board comments that “the correction in [the] Calgary housing market appears to be stabilizing and downward pressure on home prices is moderating.” The number of single family home and condos sold in September 2009 are also both up from the same time a year ago.

Scott continues: “In the third quarter Calgary shifted to a more balanced housing market. But conditions are still very favourable for home buyers. Mortgage rates remain low, affordability continues and federal government incentives…motivate first-time homebuyers to make a purchase before the end of the year.

Rick Bognar, realtor with Re/Max Central stresses that “although buyers think they can steal a home many don’t realize the market has begun its recovery. Sellers are already choked that they have had to lower their prices – to make a low-ball offer can be offensive and may make it impossible to negotiate.” It is important to realize that most home listings are priced competitively and will sell for over 95% of their list price.