First time buyers generate interest

Marty Hope, Calgary Herald
Published: Saturday, May 16, 2009

Calgary's resale housing market is chugging along. Once in a while, you hear of a home that has attracted more than one buyer, setting up a bidding war--but for the most part, the sales engine in this buyers' market is purring along nicely.

In April, nearly 1,300 detached homes were sold through the Calgary Real Estate Board's MLS system, along with 579 condos.

As I've said previously, affordability is playing a key role for those buyers who are comfortable in their jobs and looking to get into home ownership for the first time.

Prices are running at about 10 per cent below year-ago levels and there have been four straight months of sales increases.

Make no mistake, it's the first-timers who are generating interest and activity in the market --not only in Calgary, but right across the country.

"First-time buyers seem more acclimatized to economic factors, even though the barrage of bad news continues to flow," says Elton Ash, regional executive vice-president for Re/Max of Western Canada.

A month or so ago-- and there's nothing to suggest much has changed--Re/Max surveyed 32 markets in Canada and found 22 are still under buyers' control.

"Those who are secure in their jobs, have accumulated good down payments and have acceptable credit ratings are continuing to venture forward, undeterred by tighter lending criteria," says Ash.

The fact buyers are calling the shots--and are getting financial boosts from reduced house prices, historically low mortgage rates and federal government assistance-- has further stimulated first-time buyers to get out and look at what's available.

Improved affordability is prompting many of them to get off the fence, out of rental and into the market, says Ash from his Kelowna, B. C. office.

While the Calgary average selling price is still 10 per cent below where it was a year ago, April's $426,311 marked the fourth straight monthly increase for detached homes.

The condo average was $277,953, about 11 per cent below year-ago figures.

"While a sense of caution still prevails, more and more first-timers are finding it hard to pass up the chance to become homeowners in today's buyer-centric real estate climate," says Ash.

While newbies to homeownership are hogging the spotlight, those already in the market are moving around and taking advantage of some of the same elements.

They're just as affected by price, the selection of homes available and financing as anybody else.

Ash says that different price ranges are being affected differently, depending on the market segment and the inventory within it. "We have seen prices of smaller homes, or what could certainly be classed as first-time homes, stabilize, whereas, the luxury-home segment continues to be soft," he says.

Affordability in the moveup market has also improved, feeling the effects of the overall market pressure pushing prices down. "Once you are in the market, it really is a relative experience," says Ash.

Homebuilders have entered the fray by offering incentives, through pricing, special lending rates, specifications, or upgrades in an attempt to attract buyers.

Dusting off the crystal ball and giving it a good shake, Ash peered through the haze into the short-term future.

Our country's overall economic performance, consumer confidence, the unemployment situation, and how successful the federal government is with rolling out its stimulus packages.

Ash says it will likely be into the October and December period as far as into 2010 before the country sees a steady strengthening of overall economic performance.

"It will not be an overnight, turning on the light switch type of situation, but a cautious, steady improvement," he says.

As the economy improves, so, too, will the fortunes of the housing industries. But until that happens, it's the first-timers who are carrying the ball