CALGARY - Balanced market conditions are expected to prevail in Calgary’s residential real estate market next year, with the average MLS sale price rising by five per cent and sales increasing by eight per cent.

The Re/Max Housing Market Outlook for 2010, released Thursday, said prices are projected to firm up with values edging upward for the first time in almost two years. It also said an ample supply of homes should be listed for sale with inventory levels limited in high demand areas.

“First-time buyers will lead the charge for housing followed by move-up buyers taking advantage of favourable market conditions,” said the report.

“It’s anticipated that 2010 will be a year to re-establish economic traction with both Calgary and the province better positioned for stronger growth in 2011.”

Re/Max is forecasting the average MLS residential sale price of a Calgary existing home to rise by five per cent next year to $403,000 after falling by an estimated five per cent in 2009 to $385,000 from the previous year.

Although the price is expected to increase in 2010, it will still be below 2007 and 2008 levels.

The average price is for all residential properties including single-family homes and condominiums.

Re/Max is estimating MLS sales to hit 26,000 this year in Calgary for a 12 per cent gain from 2008 and it’s expecting sales to continue to rise another eight per cent in 2010 to 28,000.

Lowell Martens, of Re/Max Real Estate Mountain View in Calgary, said the volume of listings on the local market is dramatically down from a year ago.

“The inventory is, I wouldn’t say depleting, but it’s certainly going back to a very balanced market again,” he said.

“Last year at this time, there didn’t seem to be a whole lot of positive (economic) news happening out there and of course most people didn’t know what was going on. Now they’re sensing that, OK, the sky is not falling, things are starting to level off here a little bit and it appears that we may be through the worst of it. It hasn’t come to an end. Most people are still being cautious about that.”

Locally, Re/Max said the recovery has been driven by first-time buyers — many of whom had been priced out of the market in recent years— pent-up demand, rock-bottom interest rates, greater affordability and improved selection.

At the national level, Re/Max said the average sale price across Canada will be up five per cent this year to $318,000 and increase by a further two per cent in 2010 to $325,000.

MLS sales in Canada, it said, will rise by seven per cent in 2009 to 465,000 units and increase by a further two per cent in 2010 to 475,000 units.

The Re/Max Calgary forecast is in the same neighbourhood as a recent housing outlook by Canada Mortgage and Housing Corp.

Richard Cho, senior market analyst in Calgary for the CMHC, said his organization is forecasting sales in the Calgary census metropolitan area to increase by 0.1 per cent this year to 23,150 units and by 10.2 per cent in 2010 to 25,500 units.

He said the average MLS sale price in the Calgary area is estimated to fall by 5.1 per cent this year to $384,500 but rebound with a 4.8 per cent increase in 2010 to $403,000.

The Calgary census metropolitan area includes the city, Airdrie, Rocky View County, Chestermere, Cochrane, Irricana, Beiseker and Crossfield.

Dan Sumner, economist with ATB Financial in Calgary, said the Re/Max forecast might be a bit on the optimistic side.

“On the sale side of things, with low interest rates right now, some sales have been brought forward from the future. And so then next year when the prospect of rising interest rates gets a little bit closer, that could weigh a little bit on sales,” he said, adding he expects sales to stay strong in 2010.

Sumner said the Alberta economy’s recovery next year is going to be slow and gradual.

He said the Re/Max forecast of a five per cent gain in the average MLS sale price for Calgary is not out of line.

“That’s a fairly moderate price increase in any year,” he said. “But if I had to say on one side, I would say it might be a tad optimistic.”

In 2007, Calgary had 32,176 MLS sales for an average price of $414,066. In 2008, there were 23,136 sales for an average of $405,267.

mtoneguzzi@theherald.canwest.com