According to today’s article in the Calgary Herald  http://www.calgaryherald.com/Business/Calgary+housing+market+picks+speed/1453293/story.html things are looking up in the Calgary Real Estate Market. The data that supports the Author’s position comes from the statistics released by the Calgary Real Estate Board at the beginning of every month reporting on the activity of the previous month.

While we are encouraged by the increased sales activity there are different ways to interpret the data.

For example single family Calgary Metro sales were up by 261 sales in March 2009 from February 2009, terrific news! But sales were down by 332 sales from March 2008, not so terrific news. And sales were down by 1,186 sales from the “hot” market in March 2007, even less terrific news!

In my opinion a more significant statistic is the ratio of the number of sales compared to the existing inventory. In other words what portion of the available inventory is selling? The following graph illustrates the percentage of properties sold compared to the available inventory or the approximate absorbtion rate for single-family homes in Calgary Metro.

Month/Year	Single Family Sales	March Month End Inventory Plus Inventory Added During the Month	Percentage of Available Inventory Sold
March 2007	2,272	2,340 + 3131 = 5,471	41.53%
March 2008	1,418	5,957 + 3,493 = 9,450	15.01%
March 2009	1,086	4,369 +2,023 = 6,392	16.99%

  

What does this mean? For those of us watching the market it means that even though we have fewer sales than last year we actually have a slightly better absorbtion rate indicating a slightly stronger market.

The Condominium numbers for Calgary Metro are as follows:

Month/Year	Condominium Sales	March Month End Inventory Plus Inventory Added During the Month	Percentage of Available Inventory Sold
March 2007	1,026	726 + 1,250 = 1,976	51.92%
March 2008	565	2,781 + 1,561 = 4,342	13.01%
March 2009	446	2,052 + 903 = 2,955	15.09%

 

It’s easy to see why prices increased in 2007 and why prices decreased in 2008. While March numbers are positive we would need to see several months of increased activity combined with fewer homes coming to the market for prices to significantly change.

In the meantime, Sellers who price their home aggressively will sell, because roughly 16% of properties are actually selling, and Buyer’s will continue to have choice.

Hope this helps!

Susanita de Diego