In true Calgary fashion sales started to slow in July, and we expect the same for August. With a more normal market stabilizing, we are seeing the return of our more seasonal trends. Traditionally July and August see a slow down in sales activity as families take their vacations. With the incredible weather we have been enjoying this summer that seems to be the case.
Through July we seen inventory levels grow which should have an impact on prices softening. With that being said, pricing remained relatively stable through all sectors in July. The real surprise was in the North and South sectors for the Apartment style condos seen benchmark price increases month over month. Sales activity had a decrease in the lower price points this July compared to last while most of the higher price points experienced an increase in sales activity year over year.
There are interesting upticks across the board and these are just a couple of examples why every style of property, in every price range should be properly evaluated as per the location they are in to properly educate buyers and sellers. Every community in Calgary and surrounding areas remain to be a micro markets with in the macro market that makes up the Calgary Real Estate Board.
What does this mean for the first-time home buyer in Calgary?
It is important to speak with your real estate professional to see what the micro market is doing in the communities and housing types you want to buy. The overall Calgary real estate statistics only give an overall picture, but as your real estate professional we can analyze the market trends and data specific to your new home. After using a fantastic home search tool like the provided by SmartBuyCalgary.com, you can narrow down what sellers are asking for. Then, with the help of your real estate professional's knowledge and review of recent sold properties, you'll come to a conclusion on what you should pay for your new home. For more information check out this home buyers guide or contact us with your questions.
What does this mean if you own your home and are curious about the current worth of your home in the Calgary market?
As a home owner, you've received your City of Calgary tax assessment - but that is based on generic property details and sales from last July. It is not an accurate market value today. You can narrow down an idea of what your home is worth in the current market using a tool like the CMA feature on SmartBuyCalgary.com (which you can access by clicking here). This will give you an idea what other homes near you are asking buyers to pay. To get the best answer to the question 'what's my home worth', contact your real estate professional who can compare your specific property to similar homes that have already sold in the last few months in order to see what buyers were willing pay for homes like yours.
In other news affecting the Calgary market...
The Bank of Canada has raised its key interest rate as expected to 0.75 per cent — the central bank’s first move upward in the cost of borrowing in seven years. The bank’s target for the overnight rate—at which major financial institutions make one-day loans to each other—moved up by one-quarter of a percentage point from 0.50 per cent to 0.75 per cent.
The move means consumers will likely pay more for borrowing such as variable-rate mortgages and lines of credit. The key interest rate increase directly affects variable borrowing rates, and also has an indirect affect on bond yields that determine fixed borrowing rates as well. As a result, mortgage lending rates have seen an increase in the last month of approximately 0.5% for fixed rates, and 0.25% for variable rates.
Another change resulting from these increases has been an increase in the benchmark rate for mortgages - the common 'posted' 5 year fixed interest rate at the major banks - from 4.64% to 4.84%. This is the rate that lenders must use to qualify new borrowers requiring insured mortgages, meaning these home buyers will qualify for less as this rate increases. Contact us if you have questions about mortgages or to see if these changes affected your home financing ability.
With the Canadian economy as a whole performing well, the bank has also nudged up its forecast for growth this year. The bank said real gross domestic product (GDP) is now expected to grow by 2.8 per cent in 2017, up from the April outlook of 2.6 per cent.
Many chief economists for Canada’s major banks believe the bank’s move signals a turning point to a longer-term trend in rising interest rates, and that they expect to see more rate hikes moving forward.
Any future changes to the central bank’s key interest rate will depend on economic data in the months ahead. The bank’s next decision on interest rates is scheduled for September 6.
If you're interested in Calgary real estate, contact JoAnne and Joseph Purcell or call now at 403.612.5298. Discover how The Purcell's can make your home buying or selling experience as effortless and enjoyable as possible.