Calgary MLS sales and average prices so far this month are significantly higher than we saw at the start of 2012.
At the end of January 2012, there were a total of 4, 607 residential listings in Metro Calgary (MC). We saw the average price of a single family home listed at $594,178 and the average price of a condominium listed at $332,172. The same month saw a total of 1,080 MLS sales (MC), 773 of which were single family homes, 305 of which were condominiums. The average days on market (DOM) was 59.55 days for the single family home and 62.20 for condominiums. The average sales price in January was $438,364 for single family homes and $288,166 for condominiums.
Comparing the start of the year to today, August 30th 2012, we are looking at a total of 5,473 total residential listings (MC), an increase of 18.8% from January. The average listing price of a single family residential home is up 7.65% and is sitting at $639,621. Condominiums are also up 8.54% at $360,560. Until now the month has seen 1, 498 sales (MC), broken down into 168 single family homes and 96 condominiums. The average DOM for single family homes has gone down and is sitting at 43.23. The same can be said for condominiums which are now sitting at 49.37 days. The average sales price for the month of August (up to August 30th) is currently sitting at $472, 0181 for single family homes and $288,000 for condominiums.
Although the average listing and sale prices have increased for the month of August, we have seen a gross expansion of the listing/sales price gap. Last month (July 2012) had a listing to sales price gap of $164,000. The previous month (June 2012) saw a gap of $161,000. This gap has drastically increased from the same time last year, when the price gap (July 2011) stood at the still rather high number of $116,000. By comparing the average price of listings taken on the Calgary MLS versus the average price of all listings sold, we begin to see a compelling story between the expectations of sellers and the reality of what today’s buyers are actually willing to pay. The distance between these two prices will determine the pace of the current real estate market. For instance, the larger the distance between listing and sales prices, the slower the market will be as the price of the average seller wants for their home will be higher than what the buyer will pay. As prices are lowered and begin to meet expectations, we will see more inventory move off the market.
Even in today’s busy market, we still seeing average DOM market for a single family home as high as 43 days. Although this number is down from last year (59 days), it I still relatively high to the strong market we experienced in 2007, where the average DOM was as low as 33.
Real estate is governed by the law of supply and demand. The absorption rate compares how many homes are for sale at the end of the month (the supply) to how many homes sold that month (the demand0. A balanced market (that favors buyers and sellers equally) has an absorption rate between 2.0 and 4.0. Currently, in Calgary Metro, we are sitting comfortably between two and three months’ worth of inventory, creating a balanced market for both buyers and sellers. This has dropped nicely from the end of 2011 when the Calgary Market was sitting at an absorption rate of 5.68, making it extremely favorable for buyers.
Kirsten Bartlett
CIR REALTY — Marketing Manager
Twitter- @kfbartlett