Real Estate Booms for Airdrie, Cochrane, and Okotoks
October, 2013 – Residential Home Sales in Calgary area towns 22% higher in the 3rd quarter of 2013 than 2012.
The tight Rental Market in Calgary, combined with the additional demand created by Calgary’s June floods, and increasing net migration has resulted in rising real estate housing market sales in Airdrie, Cochrane and Okotoks.
Home Sales reached record highs in the surrounding towns for the third quarter, mostly driven by gains in the single-family sector. The declining supply of affordable single family homes within the city of Calgary has encouraged home buyers to consider surrounding areas such as Cochrane, Okotoks, and Airdrie.
In September, the typical single family home in Calgary was $463,700, compared to $351,400 in all surrounding towns. While conditions in surrounding towns vary, single family homes in Calgary’s bedroom communities tend to provide newer and larger homes at a lower cost relative to homes in Calgary. Lot sizes are often larger as well.
Benchmark Real Estate Prices averaged $388,933 in Okotoks, $405,933, in Cochrane, and $365,100 in Airdrie, surpassing the 2007 high recorded for that town.
Year-to-date residential sales activity showed a 13% gain over 2012. However, the number of new listings on the market fell by nearly 13%. Supply has tightened from 2012, when there was an average of four months’ supply, to less than three months’ supply in 2013. Single family benchmark prices averaged $388,933 in the third quarter, a 4% increase over the third quarter of 2012. While single family prices have been on the rise since the last quarter of 2011, prices remain just shy of unadjusted peak levels.
Sales activity showed 7% increase over 2012. However, new listings in the area have improved significantly in the third quarter, preventing erosion of inventory levels. This increase in listings is in part a result of the higher share of new homes listed on the resale market in the third quarter. New product represents more than 20% of the MLS® transactions recorded in Cochrane, higher than figures in Airdire, Okotoks and Calgary.
The months of supply, one measure of balance in the market, has been trending down this year. However, with just over than three months of supply, Cochrane’s market is not as tight as Airdrie or Okotoks. Prices are recovering but remain below peak. Single-family third-quarter benchmark prices averaged $405,933, a 5% increase over the previous year.
Residential sales showed a 14% increase over the previous year. Sales growth over the first two quarters had been dampened by overall declining listings, but it surged in the third quarter as the level of new listings was significantly improved. Affordability is one factor drawing in consumers. In Airdrie, single family homes account for nearly 80% of the sales activity, of which more than 60% of those sold this year were priced below $400,000.
The rise in listings did not keep pace with the rise in sales, causing inventory levels to fall and tightening the market. With conditions that favour the seller, homes are on the market for less time and they are selling closer to list price. Tight market conditions have supported year-over-year price gains of more than 7%. In September, the benchmark single family home price reached $365,100, surpassing unadjusted highs recorded in 2007.
The Calgary Real Estate Board’s 3rd quarter Housing Report for Surrounding Towns is downloadable from our dropbox.