Calgary Real Estate Market May Be In Trouble

The Calgary real estate may be in trouble. In the last few month the inventory in the city has been rising at a steady rate, will purchases of real estate have dropped off. The Calgary Herald reports that house prices have plummeted in just one month, and good luck in selling with a growing inventory. Read the Herald article below.

House prices plunge $20,000
Red-hot market chills in August

Mario Toneguzzi
Calgary Herald

Calgary's resale housing market, which has set a scorching pace for the past two years, has dramatically cooled, with the average price for single-family homes plunging by about $20,000 in August, according to a local realtor.

The average sale price dropped primarily because of a decline in the sales of luxury homes, those over a million dollars.

According to preliminary figures from Calgary realtor Bob Truman, of First Place Realty, the average sale price of a single-family home in August was $485,566 -- down from the record high of $505,920 set in July.

The median price dropped in August to $430,000 from $435,000 in July. It was $439,000 in June.

Truman said Wednesday that the average sale price in August was affected by the number of sales in the million-dollar-plus category.

In August, he said, 38 homes sold for more than $1 million at an average sale price of $1.5 million.

This compares with 61 sales in the upper-end market in July with an average sale price of $1.7 million.

Official Multiple Listing Service data for the month of August is expected to be released today by the Calgary Real Estate Board.

"If you get rid of the million-dollar sales . . . and compare them month to month, well August was down $2,000 compared to July," Truman said of the average sale prices for single-family homes.

There were fewer million-dollar sales in August and that skewed the average price, he said.
"But if you look at the median price, it was only down by $5,000 and that means the same thing: there were fewer million-dollar sales."

For August, there were 1,318 sales in the single-family home category while there were 598 sales of condominiums. In August, the average sale price of condos was $320,790 -- a slight increase from the $318,582 in July.

"My guess is that when people see the average price go down so much, they're going to hold off probably on buying until they see it stop, right, and then the floodgates will open again when they see it turn around," said Truman.

According to Truman's website, the average sale price of a single-family home in the past seven days, as of Tuesday, was $480,766 and the average sale price on Sept. 30, 2006, was $426,690.

In Edmonton, where real estate had also been climbing fast, the same sag in the market is being seen.

Edmonton-area home prices fell almost $10,000 in August -- the deepest drop in the city's history.

The $344,792 average, for all forms of housing, was down 2.8 per cent from July.