Hello to all, and welcome to the spring market, which, as most of you know, is the most active time of the year for real estate!
With +3 degrees today, and -20 degrees last week, some may debate that spring has actually arrived, but from the perspective of the real estate market, spring has been here since early January!
The Calgary market is active to say the least. The recent news that property values had risen above their 2007 highs seems to have spurred all of those sellers and buyers into action, with an intensity that I would say EXCEEDS levels of 2007. Multiple offers, homes selling in hours, bidding wars, and intense competition for available homes are making for an exceptional state of affairs in and around the Calgary area. To date, the highest number of competing offers I've heard of is nine (that's right, 9), all received on the first day the home was listed. Needless to say, it is not uncommon for homes to sell above listing price in competition.
So, what does this mean for those who are considering listing and selling their homes, and to those who are considering purchasing a home?
From a listing perspective, it is an excellent time to list a home or condo. As mentioned previously, home and condo prices are at an all time high, and in a lot of situations, homes are selling in competition very quickly.
From a buying perspective, not all is lost. The natural question when homes are selling so quickly is: "If my home sells in a day, how will I find somewhere to live?" The advice I've been giving to clients who are considering listing their homes for sale is that now, more than ever, being prepared is KEY. We need to do all of our homework up front in terms of financing approvals so we are able to act when the home you want comes available. Further to this, we need to focus our efforts in searching for homes that specifically meet your criteria. Time is a valuable commodity, and if we are viewing a home that "may be ok", we could be missing out on seeing another home that is a perfect fit. Couple this focused approach with an extended possession date on the sale of your current home, and finding your next home will not be an issue. Overall, from a buying perspective, there is still a selection of homes available, and because it is "spring", the number of homes coming on the market is relatively high.
What is driving all of this activity? There is no simple answer, but generally speaking, Calgary has a very confident and resilient economy. With a few exceptions, when a recession hits, it tends to hit Calgary to a lesser degree. In short, the recent "recession" was less severe in Calgary, and Calgary recovered quicker. Second, Calgary does have a shortage of housing overall. Couple this with net in-migration as well as younger Calgarians who are not yet financially prepared to purchase a home, and Calgary's rental market has exploded. Investors are back in the market, buying houses and condos more than ever, simply because the rents are high, and because they see no signs of rents (as well as purchase prices), coming down. Third, mortgage money remains relatively inexpensive. With low mortgage rates we see a lot of our mortgage payments going to pay down actual principal, and as such, equity positions are increasing. With the knowledge that rents are high, and what many see as instability and unpredictability within "traditional" investment avenues such as stocks, bonds, mutual funds, many homeowners are turning to real estate as their vehicle to build their retirement wealth.
Would you like to discuss any of the above points in more detail? I'd love to hear from you. It's always my pleasure to chat about real estate, and provide you with any information or insight you need.
And, as always, if you know of anyone who is considering purchasing or selling real estate, I would be happy to speak with them, and work with them to achieve their goal of purchasing and/or selling their home.