Cracks are starting to show in the Alberta housing market, with a flood of new listings dramatically outpacing the number of resale homes sold in the third quarter.
There has been a surge of new listings in Edmonton and Calgary as home owners seek to cash in while prices remain high. Listings of resale homes in Edmonton rose almost 51 per cent this September from the year before to 3,919 units, according to third-quarter data on the country's resale housing market released by the Canadian Real Estate Association (CREA).
However, sales slipped by 44 per cent compared with September, 2006, to 1,042 units.
In Calgary, 5,330 residences hit the market last month, an 11 per cent increase from the year before. But sales for the month fell by 11 per cent year-over-year to 1,935 units.
“Momentum is fading fast in the Alberta housing market,” said Robert Kavcic, economic analyst at BMO Capital Markets, in a research note. In September, sales in Edmonton had their sharpest decline since the early 1980s, Mr. Kavcic said.
While soaring prices are drawing sellers in droves, it also means potential buyers in Alberta are waiting or being priced out of the market.
For the first nine months of the year the average home price rose 40 per cent in Edmonton to $339,382 compared with the same period last year. In Calgary the average price was up 21 per cent to $415,391 compared with the year before.
For Edmonton home buyers this is the first time in nearly 10 years the scales have started to tilt back in their favour. The city was in a sellers' market from the fourth quarter of 1997 to mid-2007, according to data from CREA. It's the same story in Calgary, although the markets there were also balanced a year ago.
“I think it's quite remarkable how quickly those markets have shifted from sellers' to balanced. This is a good thing. I believe buyers will take their time and shop around, and that should take some of the steam out of price increases,” said Gregory Klump, chief economist at CREA.
The overheated Saskatoon and Regina markets could follow Alberta's lead, with sales falling well behind the number of new listings. The average price of a home in Regina for the first nine months of the year has risen 21 per cent to $160,296, and 44 per cent in Saskatoon to $228,096 compared with the same period last year.
Overall sales activity in Canada slipped by 4.1 per cent in the third quarter from the second, which had the highest level of sales activity ever recorded by CREA. The average price of a Canadian resale home rose 11.9 per cent in the third quarter from the year before to $329,113.
© The Globe and Mail
