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First-time home buyers' expectations too high: Coldwell Banker

Courtesy of Mario Toneguzzi, Calgary Herald

CALGARY - First-time home buyers are primarily concerned with affordability when choosing a new home, but their expectations may be too high relative to their current financial buying power, says a survey by real estate firm Coldwell Banker.

The survey was conducted among the company's brokers and sales representatives in markets across North America.

Nearly half of the survey respondents reported that affordability was the top concern for first-time home buyers, but 82 per cent of this group also consider move-in conditions to be very important when searching for homes. Only seven per cent are looking to buy fixer-upper homes that they could buy at a lower price and renovate themselves.

"In the past, first-time home buyers were willing to purchase older, more basic houses in an effort to save money and break into homeownership," said John Geha, president of Coldwell Banker Canada. "Today, this group has greater home expectations because they have grown up accustomed to their parents' lifestyles. It is important for first-time home buyers to remember that by considering a fixer-upper for their first home purchase, they can build equity over time and move up and into a second-stage home that better reflects their expectations."

In Calgary, Bonnie Wegerich, president of the Calgary Real Estate Board, said the spring market has received an added boost from a growing number of first-time buyers entering the market.

In May, homes in Calgary priced at $400,000 or less accounted for nearly 70 per cent of all MLS sales.

According to 29 per cent of Coldwell Banker brokers and sales representatives surveyed, first-time home buyers were more concerned with down payments 10 years ago than anything else while only 23 per cent said this is the biggest concern in today's market.

Some other key findings from the survey include:

- 70 per cent of respondents said first-time home buyers are looking for larger homes than they were 10 years ago;

- 38 per cent said proximity to work is the top priority for first-time buyers;

- 33 per cent said investment is the top reason for first-time buyers in making their purchase; and

- 46 per cent said first-time buyers look at five to 10 homes on average before making their purchase.





Calgary Housing Market Showing Year-Over-Year Gains
First-time home buyers breathe new life into housing market

Courtesy of The Calgary Real Estate Board

Calgary, June 1, 2009 – The number of single family homes and condos sold in May in Calgary metro are both up from a year ago.

MLS® sales activity of single family Calgary metro homes was 1,584 in the month of May 2009, showing an increase of 23 per cent from 1,290 sales in April 2009, according to figures released by the Calgary Real Estate Board (CREB®). This was an increase of 16 per cent from May 2008, when single family home sales were 1,368. The number of condominium sales for the month of May 2009 was 653, an increase of 13 per cent from the 579 condominium transactions recorded in April 2009, and an increase of 13 per cent from May 2008, when 577 condominiums changed hands.

“The spring market has received an added boost from a growing number of first-time buyers entering the market,” says Bonnie Wegerich, President of the Calgary Real Estate Board.

In the month of May, homes in Calgary metro priced at $400,000 or less accounted for nearly 70 per cent of all home re-sales.

“We are seeing the first year-over-year gain in single family home sales since last September,” says Wegerich. “A pent up demand has been building—with many first time home buyers now taking advantage of affordable prices, record low interest rates and federal government housing
incentives,”added Wegerich.

The average price of a single family Calgary metro home in May 2009 was $436,427, showing an increase of 2 per cent from April 2009, when the average price was $426,311, and showing a decrease of 9 per cent from May 2008, when the average price was $479,564. The average price of a Calgary metro condominium was $275,212, showing a 1 per cent decrease from April 2009, when the average price was $277,953, and a decrease of 12 per cent over last year, when the average price was $311,816. Average price information can be useful in establishing
trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods, or account for price differentials between geographical areas.

“The gap between supply and demand at the end of last year was pushing prices down,” says Wegerich. “But since December we have seen five consecutive months of increases in home sales, while our inventory continues to trend lower. The gap has narrowed and prices are stabilizing.”

Single family Calgary metro new listings added for the month of May totaled 2,235, up 11 per cent from the 2,010 new listings added in April 2009, and showing a decrease of 35 per cent from May 2008, when 3,432 new listings came to the market. Calgary metro condominium new listings added in May 2009 were 998, up 3 per cent from April 2009, when the MLS® saw 967 condo listings coming to the market. This is a decrease of 35 per cent from May 2008, when condominium listings were 1,538.

The median price of a single family Calgary metro home in May 2009 was $390,000, showing an increase of 3 per cent from April 2009, when the median price was 380,000, and down 7 per cent from May 2008, when the median price was $419,000. The median price of a condominium
in May 2009 was $255,000, up 2 per cent from April 2009, when the median was $251,000, and down 11 per cent from May 2008, when the median price was $285,000.

All Calgary metro MLS® statistics include properties listed and sold only within Calgary’s city limits. The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period of time. During that time, half the buyers
bought homes that cost more than the median price and half bought homes for less than the median price.

“We need to be cautious about declaring a firm bottom is at hand, but the improvement in recent months is an encouraging shift,” says Wegerich. “All signs indicate we are moving to a balanced and stable market. Consumer confidence is improving, prices are holding steady and inventory is trending downward.” “I think some buyers are trying to predict the bottom of the market. The reality is if you spend too much time trying to anticipate the bottom, you miss out on choice and selection,” added Wegerich.