Flood's influence felt in home sales

The Calgary real estate market had its busiest July since 2009, but the jury is still out on whether last month’s increased activity was connected to the June flooding. Residential sales for the city totalled 2,268 units in July, a 17 per cent increase over the same period last year. Citywide prices were nearly seven per cent higher than levels recorded a year ago, with a July 2013 benchmark price of $414,100.
“We had a big month,” said Calgary real estate agent Jim Sparrow. “It’s surprising to see this kind of activity … As the flood waters have gone down, the sales and prices have gone up.”
Ann-Marie Lurie, chief economist for the Calgary Real Estate Board, said there is no good way to measure the effect of flooding on real estate sales.
“But yes, there have been people who have been displaced, and renters who have been pushed into ownership a lot sooner,” she said.
Another factor, Lurie said, is that people who were already in the market for a home may have decided to hurry their decision over fears that the flood could lead to tightened supplies and increased prices.
Still, Lurie said most of the increased sales volume likely had little to do with the flood at all, and more to do with market conditions. Notably, the strongest growth occurred in the condo market, which saw a 26 per cent increase in overall sales over the same month in the previous year. For single family homes, the increase was 14 per cent.
Lurie said the rapid increase in condo sales versus single family homes is due to affordability.
“The single-family market was a seller’s market before the condo market was. And as we saw that level of affordable product start to decline, we started to see people start to turn toward the condo market,” she said.
Real estate analyst Don Campbell of the Real Estate Investment Network said Calgary’s statistics are likely to be slightly skewed for the next several months, as the impact of the flooding will influence figures like total listings and days-on-market.
“These numbers will no longer reflect the true direction of the market,” he said.
Campbell said he expects demand will remain strong, but added it will be interesting to see where it is focused.
“I think we are going to see a shift in demand toward neighbourhoods on higher ground over the next three to six months,” he said.
Tight market conditions remain for both single family and condominiums. Year-over-year new listings increased in July to 1,958 units, but overall active listings declined to 2,917 units, nearly 20 per cent lower than the already declining levels recorded in 2012.
 

Amanda Stephenson, Calgary Herald

Published: Friday, August 02, 2013