Calgary’s real estate market surged in October as home sales reached pre-recession levels for the first time in two years.
Sales increased from year-ago levels for the second straight month, with more than 1,600 housing units sold in October, a nearly 16 per cent spike from 2015 levels.
Ann-Marie Lurie, chief economist with the Calgary Real Estate Board, said the lift in sales may be linked to mortgage rule changes, falling prices and availability of homes with lower price ranges.
Lurie said sales growth was unexpectedly high, but she remained cautious about whether it signalled a trend or simply a blip in an otherwise depressed market.
“Not just did it increase, but it rose to levels that were really consistent with what we’ve seen in normal conditions,” she said. “It is just one month to see that level of activity, so it is something I want to continue to monitor.”
Jesse Davies, a Calgary real estate agent, said he closed six sales last month, a big boost from the two or three deals he has been inking monthly in the past two recession-riddled years.
“People are trying to time the bottom of the market, and I think people kind of think the bottom may be here and want to catch it before the upswing,” he said.
The increase in sales helped put a dent in the number of homes on the market, as inventory fell 3.5 per cent from a year ago, marking the first decline in at least 21 months.
Average home prices rose slightly, up one per cent to $462,279, but that likely indicates more higher-end homes selling rather than an increase in home values; the median price was down two per cent.
Benchmark prices for single detached homes — the price of a “typical” Calgary home — fell 3.2 per cent in October, while benchmark prices for apartments faced a steep decline of 6.3 per cent, the real estate board said.
Sales were up across all housing categories, the board said, with the largest gains in detached homes.
Sales were also heavily concentrated in lower-priced homes. Among single detached homes, the greatest amount of sales growth occurred in houses priced $300,000 to $400,000.
Despite lower prices, the Canada Mortgage and Housing Corp. said in its most recent housing report there continues to be moderate evidence of over-pricing in Calgary’s real estate market.
The indicator means current prices are not supported by the economic reality in a city dealing with a protracted downturn and high unemployment.
Still, Canada Mortgage and Housing analyst Richard Cho said there have been improvements in the past year.
“We have seen prices adjust and start to get closer to the current economic environment,” Cho said. “We do expect to see the market gradually shift from a buyer’s market to more of a balanced market as we move into 2017.”