Calgary Real Estate Newsletters - February 2007

5.7% Increase in January!

by Joe Samson, Calgary Realtor

Shortly after a record braking 2006 we are well on our way to another outstanding year in real estate. As I have experienced in January, the market has been more active than anyone could have predicted. In my previous writings, I had forecasted that up to Christmas we will be seeing a window of opportunity for buyers which will quickly diminish as the New Year begins.

I had witnessed and participated in a number of bidding wars already this year causing real estate prices to escalate again. In some situation it has been really interesting because there were homes on the market for more than two months going into the new year and all of a sudden it seemed like the Buyers had woken up at the same time and wanted to purchase the same house on the same day, hence creating a bidding war.

Statistically speaking at the end of December, the average single family home cost $396,870 and at the end January the same average was $419,324. That’s a 5.7% increase in one month. The million dollar question is: how long is this going to continue? Just like in any business, real estate also falls under the “law of supply and demand”. Not that long ago, around early December there were 5,400 available listings in Calgary (excluding acreages and smaller towns around Calgary). Shortly into 2007 that same number has sharply dropped down to approximately 2,800 listings and it hasn’t changed much year to date.

To summarize the current market conditions, January was another record breaking month in sales activity compared to 12 months ago. Inventories are struggling to keep up with the demand of the buyers causing a vacuum in the supply and therefore prices are continuing to increase without any fear of a bubble.

REALTORS® always get the questions asked if it’s better to sell my house now or should I wait until the spring market to get the highest price for my home? For most people the answer is straight forward because their personal circumstances will affect their decision. Many families sell in the spring because they want to wait for the kids to finish the school year or simply not wanting to move when it’s too cold outside. However, if you are thinking of timing your move strictly form an economic perspective, I would suggest to sell your house into a market where there is a scarcity of supply. Due to the hyperactive market we had last year, many people wanted to try investing in real estate hoping to make a quick buck by “flipping” a house. Unfortunately the market happened to flatten out last June and there were many investors who were caught off guard by not being able to sell their fixed up property at their desired price tag. Many investors had decided not to sell their house at a loss to them but rather rent it out for 6 months and thinking of selling the house in the spring market hoping to get a higher price. My concern with this way of thinking is that if everyone or a large number of sellers are thinking the same way, is the law of supply and demand will take control or the Buyers will outmuscle the potentially higher inventory and create another rally into the summer?

Thank you for your continuous support, feel free to call me anytime with your questions or real estate needs.

Your Best Friend in Real Estate,
Joe Samson
Real Estate Professional

P.S. – If you had found the above information useful and believe that someone else might find it beneficial, the greatest compliment I can receive from you is to send this link to them and to keep me in your thoughts when someone mentions real estate to you. Thank you.