January 2010 Calgary Buyers Eager to Jump Into Real Estate Market
More homes sell above asking price in January
By MARKUS ERMISCH, Calgary Sun
Last Updated: 3rd February 2010, 4:09pm
Eager home buyers pushed up prices of an unusually high number of houses in Calgary last month and paid more than what sellers were asking, shows Calgary Real Estate Board Data.
In January, 7% of homes sold through the multiple listings service in Calgary sold above the asking price.
In a normal market, where neither buyers nor sellers have the upper hand, the vast majority of homes sell for slightly below the listing price. A small percentage always sells above the listing price, even in a recession. January last year, 2.1% of Calgary homes were bid above the asking price, while in all of 2009, 4.5% of homes changed hands for more than the asking price.
CREB president Diane Scott conceded 7% is a high percentage of homes to sell for more than the sticker price.
But she quickly doused fears that the bidding wars — in 2006, more than one in five homes sold above the asking price, pushing prices to unprecedented levels — are about to return.
“It’s just a market that’s catching up, simply because the prices have come down and the listings are very low,” she said.
“We’ll see a correction in February. I’m sure that as we get more listings, it’s going to settle down.”
Last month, realtors put an additional 1,822 single-family homes on the market, pushing the total number of single-family homes for sale in Calgary to 2,513. One year ago, 2,068 new listings pushed the January 2009 sales inventory to 4,040 single-family homes.
Average prices for single-family homes dipped 2% in January compared to December, but were 7% higher than one year ago.
ATB Financial economist Dan Sumner said he doubts Calgary’s housing market is headed for another manic period after wallowing in a depressed state for more than a year.
“Almost anything that’s happening right now, just look to interest rates,” he said. “That really is the driver.”
Cheap money has lured reluctant buyers over the past few months, leading to a recovery of the real estate market that has caught many by surprise.
But it’s exactly the strength of the rebound that has led some to speculate that another housing bubble, inflated by low interest rates, is gradually rising.
Sumner, however, said the days of cheap money are numbered, as the Bank of Canada is likely to raise rates by the middle of this year.