Seller’s market means higher prices for first-time buyers
“The condominium market offers affordable options for consumers in the city,” according to the Calgary regional housing market statistics released by the Calgary Real Estate Board Oct. 1.
“Selection is limited in the lower price ranges, but choice has improved for higher price homes,” says the board’s president, Becky Walters, in the document.
But many young Calgarians who are still looking to get their feet wet in the real estate world may not be able to afford higher priced homes. Instead, they may have to look elsewhere for more reasonable prices, which are currently few and far between.
Shelley Bennett, whose been buying and selling condos for a few years now, recently helped her daughter, Chelsea Bennett, purchase her first condo at 23 years old. Her older daughter purchased her first condo at 18 years old.
“Young people are a little more sophisticated now and they want to be lining their own bank account and not someone else’s,” Shelley Bennett says.
Mortgage associate Joshua Tagg, says he has seen many first-time home buyers purchasing in the outskirts of the city because of the lower prices. Many are young couples or individuals without children, he says.
The document states residential sales for September rose 19 per cent compared to last year. Over 1,000 of the total sales were single-family homes compared to just over 300 condo-apartments and 245 condo-townhomes.
“Young people are a little more sophisticated now and they want to be lining their own bank account and not someone else’s.”
– Shelley BennettTagg says more people are looking to buy post-flood because the cost of having a mortgage is relatively the same or just slightly higher than renting.
Shelley Bennett says that condos are especially more affordable now with higher mortgage rates and qualification changes. She says an income that would have previously qualified someone for a $150,000 mortgage will now qualify for about an $110,000 mortgage at a higher rate.
However, there are always additional costs when it comes to buying real estate. Chelsea Bennett bought her condo only a few months ago for $216,000 in the downtown core. She says on top of the sale price, she also paid:
• $1,500 in lawyer fees
Photo by Scott Kingsmith
• Moving costs, including $50 to book the elevator in her building
• Hook-up fees for utilities
• $309 in condo fees and parking
• Property taxes based on location and square footage
More frequent sales of high-priced homes has created a boom in housing prices, according to housing market outlook statistics released by Calgary Census Metropolitan Area in the spring.
According to the same document, the average Multiple Listing Service, or MLS, residential sale in 2013 is an estimated $429,000 and is expected to rise to $439,000 in 2014.
Shelley Bennett says the average price when they were looking for a one-bedroom non-renovated condo with parking was about $175,000 to $225,000. For the same condo completely renovated, she says the price is about $260,000 to $310,000.
Chelsea Bennett has been busy renovating her condo with the help of her mom since she purchased it and says she’ll be ready to sell within the next few weeks.
She was able to save up her down payment by contributing to RRSPs through her employer. Her dad also helped out by co-signing on her mortgage.
“(Buying real estate is) hard for young people to break into. It can be difficult, but you need to prepare from a young age and be conscious of it,” Chelsea Bennett says.