March 16, 2010
Last month, Calgarian homeowners likely thought the sky was the limit with regard to their home value. But as the reality of imminent interest rate increases homeowners are putting their homes on the market.
December 2009 active listings hit monthly lows. In January, however, listings have climbed. In December 2,054 single-family homes were on the market compared with 3,655 as of Monday. Condo listings were at 1,204 in December compared with 1,970 listings on Monday.
Despite the fact that prices have continued to increase, affordability in Calgary continues to be at or below long-term averages. In the final quarter of 2009 affordability actually improved in Calgary. This was largely due to lower interest rates decreasing the carrying cost of a home.
So sellers were still at an advantage… until now it seems! Listings are going up with should take some pressure off of prices which have continued to edge upwards. The reason I say these sellers are sophisticated: they held off until prices seemed to level off.
Prices are leveling off now because homeowners know that interest rates are likely going to increase in the summer. This means that less homebuyers will be in the market.
Selling while the market is still hot. Good idea, Calgary sellers, good idea. Maybe you should rent until the end of the summer to buy at the lower prices too?