Could Lethbridge Real Estate average $500,000?

The housing boom in Lethbridge Real Estate came on the heels of unprecidented price increases in Calgary. Could the following article, which appeared in the Calgary Herald in November 2006 be an indication of things to come in the Lethbridge Real Estate market?

If you are interested in buying of selling Lethbridge Real Estate please view my web site at www.TeamMiller.ca, or call me at 403-329-0479, I’ll be happy to help.

New single-family homes forecast to cost $500,000
The Calgary Herald
Fri 17 Nov 2006
Page: D1 / Front
Section: Calgary Business
Byline: Mario Toneguzzi
Source: Calgary Herald

The average price of new single-family homes in and around Calgary will climb to almost half a milliondollars next year, according to the Canada Mortgage and Housing Corporation.
The forecast, released Thursday at the 13th annual Alberta Housing Outlook Conference in Calgary, said the average price of new single-family homes will hit $355,000 this year — a 12.4 per cent increase from the year before — but jump by 37.3 per cent to $487,500 in 2007.
“There’s been long delays in housing construction,” said Lai Sing Louie, senior market analyst for the CMHC in Calgary. “We’re looking at a lot of the prices moving in even now that would have been negotiated back in 2005 and are just being completed now. So all that process into 2007 will bring up that average price quite dramatically.”

Prices in the new home market are recorded when a house is completed and “absorbed” or when
homeowners take possession. The forecast is for the Calgary Census Metropolitan Area and
encompasses the city, Airdrie, the Municipal District of Rocky View, Chestermere, Cochrane, Irricana, Beiseker and Crossfield.

Prices of new homes in the Calgary CMA have risen dramatically in the past few years. In 2004, the average price for a new single-family home was $285,243 and rose to $315,796 in 2005.
Louie said the resale home market will also experience strong gains in 2007 — although not as hefty as this year.

The CMHC forecast has the average resale single-family home in the Calgary CMA rising by 39.2 per cent in 2006 to $385,100 and by 9.5 per cent in 2007 to $421,500. The average resale condo in the Calgary CMA is forecast to rise by 41 per cent this year to $259,600 and by 10.4 per cent in 2007 to $286,500.

“There’s been a huge movement in prices in 2006,” said Louie. “2007 will be a very good year.”
Total MLS sales are forecast to hit 32,500 this year, representing a three per cent increase from a year ago but they are forecast to drop by 6.2 per cent to 30,500 in 2007.
Kevin Clark, president of the Calgary Real Estate Board, said all indications are that the Calgary and Alberta economies are still very strong and that will drive a strong real estate market in the near future.

“And although we’ve seen an increase in listings in the last few months, we would see that as an interim settling of the marketplace as opposed to a change in the marketplace,” said Clark, adding there is an anticipation the real estate market will gradually settle down through to the end of this year.

“We’ve seen a settling of prices in the last few weeks and that’s driven very much by the increase in inventory. The demand has still been good, but the increase in inventory, the increase in supply, have allowed prices to settle and actually fall back a little bit in quite a number of areas. Once that regains its security — its stability — then it would likely indicate the prices will rise some in the future.”

Richard Corriveau, regional economist for the Prairies and Territories for Canada Mortgage and
Housing Corporation in Calgary, said the provincial forecast remains strong. The average price of a resale house in Alberta was $218,266 in 2005. It is forecast to jump to $282,500 this year and to $318,000 in 2007.

“What we’re currently living in in Alberta is a dream environment,” said Corriveau. “That is contributing to record level of housing starts and sales as well. Heading into 2007 we believe the best will be behind us . . . But the impacts of net migration from 2006 will still maintain housing demand at very strong levels.

“The ultimate concern for this marketplace is the escalation in house prices that’s currently existing, both new and resale, and that’s resulting in a tremendous gain in monthly carrying costs. That will cast some people to the sidelines.”

The CMHC is forecasting total MLS sales in the province will hit 72,500 this year, but drop to 68,750 in 2007 with rising prices the main reason for the decline.

AVERAGE HOUSE PRICES FOR CALGARY AREA
New Homes
2004
$285,243
2005
$315,796
2006*
$355,000
2007*
$487,500
Resale Homes
2004
$222,851
2005
$250,789
2006*
$348,700
2007*
$381,000
*Forecast

This article was posted by Allan Miller of Sutton Real Estate Lethbridge, please view my web site at www.TeamMiller.ca, or call me at 403-329-0479 for more information about Lethbridge Real Estate.

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Published in: on December 14, 2006 at 9:38 pm  Leave a Comment