Calgary Real Estate - You Can't Take It With You!
I was pondering why inventory has ramped up throughout this year and sales are down in June 2010 compared to recent Junes. Sales of single family homes for the 30 days ending June 26, 2010 were 1087 compared to 1837 for June, 2009. Interest rates have moved up a bit and new mortgage rules have made it more difficult for some potential buyers. Some buyers advanced their purchasing decisions in anticipation of these changes in mid-April. We have been experiencing a bit of a lull since then. However, when we look at interest rates over the past 30 years, we are still experiencing historically low interest rates. So what gives?
Heading back to Saskatoon...
It is sometimes difficult getting a pulse on the current flow of migration to and from Calgary. Census information confirms the status several months after the fact. In a survey by the Calgary Apartment Association discussing rental apartment turnovers in 2009, the number one reason tenants quit renting was to purchase a house or condominium. With lower interest rates and lower home prices in 2009, that makes sense. So why are sales down in June 2010? Interest rates and home prices are up just a tad so shouldn't sales still be strong? I received better understanding with the number two reason tenants quit renting. According to Gerry Baxter, executive director of the Calgary Apartment Association, the number two reason that tenants quit renting was job relocation. "This likely all coincides with the turn in the economy. People who had flocked to Alberta to take advantage of job opportunities and a thriving economy began to return to their homes elsewhere in the country due to the economic downturn". Mr. Baxter was referring to tenants in his comments but I think that this applies to some home owners as well. Most Calgarians have been affected by the downturn. Perhaps one member of the household has lost his or her job or perhaps business income is down from previous months. Families can carry on for awhile but there comes a point where a decision is made to pull up roots and move to an environment where it is easier to make ends meet. Methinks this is the fundamental reason why our listings inventory is up and demand is down. Unfortunately, unlike the turtle, you can't take your home with you.
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