Canada's Housing Bubble

Single-family sales show 78% rise over same period in '08

Jan 6, 2010 Markus Ermisch, QMI Agency cnews.canoe.ca

Calgary realtors celebrated more than just Christmas this past month as the local real estate market showed a marked improvement over dismal sales levels one year ago.

In December, local realtors sold more homes at higher prices than one year ago, shows data released yesterday by the Calgary Real Estate Board.

The number of single-family homes sold in town were up 78% in December compared to one year ago, while the number of condos sold rose 66%.

Prices also showed significant increases on a year-over-year basis.

The average MLS price for a single-family home, at $451,349, was up 8% over last year.

Condominiums, meanwhile, saw average prices rise to $288,640, an increase of 5% compared to December last year.

"What a difference a year makes. Undoubtedly the recovery in Calgary's housing market came sooner than expected this past year," said CREB president Bonnie Wegerich.

"The same time last year, the cards were stacked in favour of the buyer, but this month sales once again show Calgary has returned to a balanced market."

But the year-over-year rise in sales and prices shouldn't come as a surprise, considering that in late 2008, Calgary was stuck in a recessionary winter, the likes of which it hadn't seen for more than a decade.

The rapid recovery of Canada's real estate market has befuddled many observers and have some sounding ominous warnings that another real estate bubble is starting to inflate.

Also, some economists, including ATB Financial's Todd Hirsch, are arguing once the pent-up demand dries up and the pool of first-time homebuyers is depleted, home sales will once again slow down across Alberta.

Last month, 799 single-family homes changed hands, compared to 1,095 the previous month, whereas prices dipped 3%.

Condo sales, meanwhile, slid to 341 from 504, while prices declined 2%.