Housing starts and bargains
Inventory shortage raises prices in Calgary
The heat from Calgary’s sizzling resale housing market is warming nearby communities as Airdrie, Okotoks and Cochrane have experienced record quarterly MLS sales.
In a report released Wednesday, the Calgary Real Estate Board said year-to-date, 2,938 units were sold in surrounding towns until the end of June, a 30.46 per cent increase over last year.
“In addition to lifestyle preferences, tighter supply conditions for Calgary single-family homes in more affordable price ranges are fuelling demand in many of the areas surrounding Calgary,” said Bill Kirk, CREB’s president.
Also on Wednesday, Royal LePage said in a forecast a sustained supply imbalance is pushing residential real estate prices higher in Calgary, causing strong year-overyear price increases in the second quarter across all housing types.
Detached bungalows increased by 9.7 per cent to $501,200 and condominiums rose by 9.3 per cent to $286,422, it stated. Standard twostorey homes increased by 7.9 per cent to $489,589.
In Airdrie, there were 563 sales in the second quarter, up 40 per cent from last year with the single-family home average price at $431,512, representing a year-over-year increase of 12 per cent. The benchmark price — what CREB describes as a “typical home” — was $385,667, up 7.5 per cent.
Okotoks sales in the second quarter rose by 35 per cent to 272 transactions with the average price for a single-family home increasing by 4.1 per cent to $476,612. The benchmark price rose by 6.7 per cent to $416,833.
And in Cochrane, sales rose by 35 per cent to 233 units with the single-family home price up by five per cent to $476,504. The benchmark price of $421,833 was up 4.5 per cent.
By comparison, the City of Calgary’s single-family average sale price was $544,749 in the second quarter, rising by 6.8 per cent from last year and the benchmark price experienced a 10 per cent hike to $503,567.
“Buyers seem to be flocking to outskirt communities as amenities are building up at a record pace and property values are rising strong like the rest of the market but are still significantly less than Calgary,” said Shayna Nackoney-Skauge, a realtor with RE/MAX Rocky View Real Estate.
“The other day I had a buyer choose between pretty much the exact same home — one was in Airdrie and one was Coventry Hills in Calgary. Looking within a price range of around $425,000, the home in Airdrie was priced $25,000 less. They didn’t hesitate to write an offer on the home in Airdrie that day.
She said it is not uncommon to have a lineup at the door when a house in Airdrie first hits the market, particularly for homes under $500,000.
Mike Fotiou, associate broker with First Place Realty, said the supply of listings in Calgary has been very tight over the first half of the year, so buyers have had to expand their search radius.
“And they’ve discovered that their dollar can go a lot further outside of Calgary. Anecdotally, I’ve had clients that work in north Calgary end up buying in Airdrie because in exchange for a slightly longer commute, they found comparable properties for tens of thousands of dollars less,” said Fotiou.
Ted Zaharko, broker and owner of Royal LePage Foothills, said Calgary has had a serious inventory shortage dating back to the beginning of 2013, which combined with strong demand from prospective homebuyers is responsible for pushing prices skyward in the city.
“We definitely have one of the hottest real estate markets in the country right now and all housing types are performing very well. Properties are being gobbled up as soon as they hit the market,” he said, adding that active listings are starting to climb.
“Slowly but surely we are seeing inventory levels creep up, which is needed to satisfy the pent-up demand after a prolonged period of insufficient supply.”
Royal LePage is forecasting home prices in the city will rise by 5.5 per cent over the year compared with 2013.