Happy New Year to our readers! For many of us who are involved in the business of real estate we will be happy to put 2009 behind us but what can we expect in 2010?

The most significant statistic, in my opinion, when considering market conditions, is what portion of the available inventory is selling? The following table shows the percentage of properties sold compared to the available inventory, or the absorbtion rate for single-family homes in Calgary Metro year over year for the month of December for the last three years.

Month/Year Single Family Sales Month End Inventory + Inventory Added During the Month Percentage of Available Inventory Sold
December 2007 846 3,364 + 984 = 4,348 19.46%
December 2008 449 3,860 + 836 = 4,696 9.56%
December 2009 799 2,054 + 806 + 2,860 27.94%

 

The above data clearly shows how much better our market is going into 2010 when compared to the previous two years. In addition the following absorbtion rate table for each month since December of last year shows a very good absorbtion rate for the last eight months.

Month/Year Single Family Sales Month End Inventory + Inventory Added During the Month Percentage of Available Inventory Sold
December 2008 449 3,860 + 836 = 4,696 9.56%
January  2009 550 4,040 + 2,068 = 4,248 12.95%
February 2009 825 4,352 + 2057 = 6,409 12.87%
March 2009 1,086 4,369 + 2,023 = 6,392 16.99%
April 2009 1,290 4,130 + 2,010 = 6,140 21.01%
May 2009 1,584 3,861 + 2,235 = 6,096 25.98%
June 2009 1,837 3,395 + 2,244 = 5,639 32.58%
July 2009 1,585 3,314 + 2,089 = 5,403 29.34%
August 2009 1,277 3,296 + 1,910 = 5,206 24.53%
September 2009 1,257 3,148 + 1,857 = 5,005 25.11%
October 2009 1,285 3,003 + 1,819 = 4,822 26.65%
November 2009 1,095 2,658 + 1,365 = 4,023 27.22%
December 2009 799 2,054 + 806 = 2,860 27.94%

 

I’ve always said that Real Estate is not rocket science, just common sense and the basic economics of supply and demand. Eight months of over one quarter of the available listings selling represents a balanced market. In other words this is a market that does not favour the buyer or the seller. Well priced properties will sell relatively quickly but more than 70% of properties are not selling so buyers still have some choice.

The Total MLS (including Condos and Country Residential) Median Price has shown the following progression:

The Calgary Real Estate Board reports both average and median prices. I prefer to judge market conditions by following median prices because average prices can be distorted by unusually high single sale prices. The median price shows us the “middle” price of all sales during any given month. The highest median price reported in 2009 was $360,000 which was achieved in June and then again in October and November and December. The difference between the lowest median price and the highest median price last year was 5.56%. Most of the economic forecasts I have heard predict a “normal” price increase in 2010 of 5% – 6%.

I will leave it to the economists to make long term predictions, but it looks like we have seen a return to balanced market conditions for the first quarter of 2010.

Hope this helps!

Susanita de Diego