Dramatic ups and downs have many Calgarians riveted to real estate
By Mario Toneguzzi, April 11, 2009
It has become a national obsession.
And just like sports aficionados who keep a daily count of the number of goals and assists hockey players such as Jarome Iginla tally, homeowners and potential buyers are well aware of what the prices of single-family homes and condominiums are doing on a daily basis, particularly in the local real estate market.
“Even 10 years ago, the obsession was not about our home prices, because we knew it was a good long-term investment,” says Don Campbell, president of the Real Estate Investment Network in Canada and author of three books on the real estate market.
“We knew it was a very smart move to buy a piece of real estate. People understood back then that markets go up, markets go down, markets stay flat. That’s what they do.”
The obsession comes from all the information available in newspapers, television, broadcasters and the Internet– and the information is instantaneous. Television shows about flipping houses became popular. People started to obsess about making a quick buck.
“It’s changed our Canadian mentality–our North American mentality–to almost like a day-to-day experience,” says Campbell, adding that when looking at the real estate market, people should not be looking through a microscope but through a telescope.
“If you analyze monthly the numbers, which is microscopic analysis, it will drive you crazy–make you feel like a genius one day and a fool the next depending on what news that comes out that day,” he says.
The market today is just taking a breath, he says. Recently on a national television program, Campbell said the housing market was not crashing or collapsing but simply correcting itself.
“The market cannot run at a sprint forever,” he says. “It’s just like any great athlete. You do have to rest and sometimes when it rests and you’re not understanding that it is resting, it can cause fear and obsession in the marketplace. And that’s what we’re witnessing right now.”
Average sale prices for single-family homes peaked at $505,920 in July 2007 and for condos at $332,237 in May 2007, but have declined since then. The latest numbers from the Calgary Real Estate Board showed single-family home sales averaged $420,354 in March while condos averaged $284,056–both up from the previous month.
Looking back, residential MLS sales in the city had an average price of $26,712 in 1973 and climbed to about $108,000 in 1981. But the market fell in the early ’80s with the overall average price dipping to $80,462 in 1985. Since 1995, at $132,114, the average MLS sale price in Calgary rose every year until 2008, when the price fell to $405,267 compared with $414,066 in 2007.
But in recent years, Calgary has experienced a housing boom. Average prices rose by more than $28,000 in 2005, more than $95,000 in 2006 and by nearly $70,000 in 2007.
Our Real Estate Price Obsession was last modified: April 30th, 2010 by admin