The combined (houses and condos) Absorption Rate within Calgary city limits stands at 5.64, with houses being 5.47 and condos being 6.05 (See Chart A below - AR Trend). The very high absorption rate is something that we have not seen in Calgary in a very long time. Sales are down 32% in May 2008 from May 2007, while inventory at the end of the month is more than double what it was at the end of May 2008. The bottom line: there are far more properties for sale in Calgary than there are buyers to buy them - we are in the middle of a market correction.
Condos continue the trend of the last 6 months and are lagging behind Single Family (SF) houses. See the February Market Report for an explanation of why I think this is.
The average property sold in May was on the market 45 days (See Chart B - DOM Trend). Sellers should expect this number to continue to rise until the market corrects itself. The days when Calgary properties which were priced right sold in less than a month are gone for now.
The median price for one and two bedroom condos respectively is now $240k and $280k, down from $255k and $310k respectively in May 2007. For SF houses the median price is now $419k, a $16k decline from May 2007. (See Chart C - Median Price Trend) .
One-year Fixed Rates Coming Down
One-year fixed and variable rates continued to come down slightly in May as worries about an economic slowdown continue. But five-year fixed rates have not moved much as the sting of the sub-prime crisis in the US continues to hurt lenders' earnings.
The current average variable rate is 4.36%. One and five-year fixed rates are 6.14% and 6.36% respectively.
Andrew Kyle, B.ASc., is a REALTOR® with Royal LePage Foothills and a Certified Condominium Specialist.
