The aftermath of the Calgary flooding last month has created an anomaly in the Calgary real estate market. Many homeowners displaced by the recent Calgary flooding were located in affluent Calgary communities along the Elbow River with multi-million dollar properties. These owners along with those renting suddenly needed a place to live and went searching the market place to find any suitable properties listed on the Calgary MLS®.
According to Tink International Real Estate agent, Thomas Keeper, there's a “crazy” volume of activity in the luxury home market, with buyers rushing in. Homeowners in affluent neighbourhoods along the Elbow River, who were greatly affected by the flooding, are prompted in buying homes elsewhere, while their homes are being repaired for several months. Keeper said, multimillion dollar homes that normally sell in a year's time, now sell for 10% more than their normal price in a matter of weeks, further having a ripple effect throughout Calgary.
He described the luxury home market as bumping buyers down, with a recent example of three offers for a new home listing in a southern Calgary suburb over the weekend. Although home prices may decline in areas affected by the flooding, overall prices in the City are expected to increase and remain high for the foreseeable future.
The usually quiet month of July became a boom this year, according to Mike Hornby, a Re/Max associate. He noticed another southern suburb home had 19 showings in 8 days, which is unusual in July.
An associate broker at CIR Realty, Mike Leibel said he expects only a short-term impact by the flood on property values in flood-affected areas. Further he recalled the quick turnaround after a downtown west side condo building beside the Bow River was flooded years back.
According to chief economist Ann-Marie Lurie of the Calgary Real Estate Board (CREB®), the decline in home prices in flood-affected areas may depend on the city's move to build dikes or berms to control flood when rivers overflow their banks. Lurie said the tighter housing market may draw renters to bedroom communities outside of Calgary, like Airdrie. She further said, if renters won't consider home ownership, they would have to settle renting homes in suburbs that are left available.
With the vacancy rate already tight from the start, now the rental market becomes non-existent, according to Hornby. Calgarians are generally triggered to buy homes decisively – not necessarily for being displaced by the floods but for their foresight of a tighter market ahead. The bright side of the Calgary flooding has been the increase in sales of Calgary luxury homes.
Courtesy of: Calgary HeraldPosted by Ross PAVL on