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Average selling price climbs 18 per cent

Whatever gains were made in Calgary's resale housing market in 2007 can be put on the shoulders of activity in the first part of the year, say industry professionals.

Year-end figures from the Calgary Real Estate Board show that single-family housing sales totalled 18,438 -- down more than three per cent from the previous year.

The average selling price climbed almost 18 per cent to $472,230. In the condominium sector, the 8,236 units that changed hands represented a decrease of less than two per cent. At the same time, the average selling price of $316,370 was a jump of nearly 20 per cent compared to 2006.

In the smaller centres outside of Calgary, there was a slip of less than one per cent in the number of sales, while the average price soared by 28 per cent to $377,287.

While overall sales were down two per cent or so for the year, they were "up dramatically in the first six months and down even more so in the last six," says Bryan Morrow of Re/Max First in Calgary.

Board figures show that from January to the end of June, 19,836 single-family homes and condominiums were sold in and around Calgary -- but from July to December, sales fell to 12,061.

"The first half was great," says Gary MacLean of Re/Max Central.

"Then the second half slowed and we found ourselves with an overabundance of inventory. It was a buyer's market in the second half and prices are suffering."

Potential buyers found themselves with plenty of selection and were able to take time to make their purchasing decision.

Listings poured onto the market from those who had purchased new homes and were trying to sell their existing homes, along with speculators who had purchased investment properties when prices were lower and were now trying to sell them.

Sales through the board's MLS system tumbled from 4,000 in March to less than 1,500 in December.

CREB year-end numbers also show that during the year, nearly 54,000 new listings were added to the catalogue of available homes.

MacLean tracks the sales to listings ratio as part of his stable of graphs. In March and April of last year, one home sold for each new listing -- a balanced market.

"Since then, this ratio has deteriorated considerably and at the end of 2007 it stood at one sale for every 4.46 homes on the market," he says.

As the year started to wind down, the listings total began to decline -- as it has historically done due to the holiday season.

But there was a different twist to this one, says MacLean.

In October, there were 9,900 active listings on the board's ledgers, but it had slipped to less than 9,300 by the end of November. Then came a dramatic drop to under 6,500 by the end of the year.

"The sharp decrease in active listings was due to over 2,400 homes not selling and coming off the market as their listings expired," says MacLean.

Ron Stanners, who is winding up his one-year term as CREB president, says that about 30 per cent of all homes for sale were vacant last year -- mostly speculators trying to move their properties.

But overall, he calls 2007 a good year.

"Sales were down a bit from '06, but prices were up somewhere around 10 per cent December to December," says Stanners.

"The market went like hell for the first four months and then started to slow -- and I think that because of the strength of the first part of the year, we were able to have a pretty good year."

It was a good year for buyers because there was plenty of

choice and not much urgency to buy right away.

On the other side of the equation, sellers were in a tougher spot because of the larger inventory and the lack of upward pressure on prices.

After climbing steadily from $375,646 in January to a peak at the end of July at $447,271, the average MLS price started to slide. By the end of the year, it had dropped to $413,200.

As for single-family homes, the average topped out at $505,920 in July. Except for an upward blip in November, it showed a steady decline finishing 2007 at $444,769.

Morrow, who also maintains a library of charts, graphs and figures that he provides in a client newsletter, says there were two price stories during the year.

"From December to December, they rose around nine per cent -- all of which masks the fact that in the first seven months, prices rose by nearly 25 per cent, then promptly fell by 13 per cent," he says.

The Calgary Herald 2008