More than 1,700 REALTORS® and real estate professionals attended the Calgary Real Estate Board’s fifth annual forecast breakfast last week to hear newly appointed president Ed Jensen’s outlook for the new year and an overview of the roller-coaster ride that was 2007.

The 2007 commercial market was positive, as there was a 2.8% increase in sales with 955 properties sold, compared to 928 in 2006. The total dollar volume of commercial property sold was $4.9 billion in 2006, and in 2007 that number rose over the $5 billion mark, a 0.7% increase.

Last year saw an increase in Calgary industrial sales and a decrease in office sales, but retail and multi-family sales were on par with 2006.

"You don't drive too far downtown to notice the commercial construction activity with tower cranes back dropping every street corner," said Jensen. "According to Calgary Economic Development, Calgary is entering into a period of normalized growth in the commercial sector."

New sub-lease space and office complex completions will increase both retail and office availability in 2008, said Jensen.

Industrial leasing continues to be very competitive with a two-year average vacancy rate of only 1.1%.

Suburban office space increased above 3% for the end of 2007 and downtown lease space is increasing due to the availability of sub-lease space and new building completions. Land sales in the southeast quarter accounted for over 55% of sales in the city.

Total rural MLS® dollar volume was $847 million in 2007 and the average sale price per parcel was $780,861 and averaged 31.6 acres per sale.

Last year, there was a 4.5% decrease in dollar volume over 2006, with an 18.6% decrease in the number of sales. There was a 17.3% average price increase in 2007 over 2006.

There was also a definite interest in bedroom communities, whether it is a price point or lifestyle choice, said Jensen, as the average price jumped over 28% from December 31, 2006 to December 31, 2007.

Listings were up in 2007 from a combination of record new home sales, sellers listing their pre-owned homes, investors cashing in and high prices, which tempted a number of homeowners to list and test the market for various reasons.

Single family and condo average sale price both had generous increases in the early part of 2007 and then saw a correction in the latter half of the year, finishing with good yearly results.

"(There is a) growing percentage of homeowners interested in the condominium lifestyle," said Jensen. "The percentage of condo listings to single family listings is growing steadily and has climbed over 30% of total sales activity in Calgary.

"This trend should continue to climb, as we move into the future, with all the new condo starts in 2007 as well as those planned in ‘08," he added.

2007 as a whole had inventory levels that looked high but are more in line with record sales over the last few years; 2006 was the anomaly, said Jensen.

"Our statistics show an overall price appreciation for the year. Sellers need to have a REALTOR® interpret all the variables to come up with the right value to sell, in each specific market. Over 80% of the communities saw prices increased, some greater than others," said Jensen. "20% of the communities did not go up in value. This may also mean there is opportunity here for buyers, who need to call their REALTOR® for more details and to analyze the local market."

"I expect to see the first part of 2008 continue to be a bit of a roller-coaster ride, with listing levels going up and down until we get through the last part of this inventory adjustment period," he said. "Seeing a solid Alberta economy, strong employment, predictions of movement to past levels of net migration, I see the Calgary market moving closer to normal market conditions. As normal as Calgary can be."

For 2008, single family and condo listings and sales volumes will both go down 5%. In terms of average prices, 2008 will see a rise of 5% across the sectors, said Jensen.

The condo average price is the only anomaly and will rise by 6% this year to $335,300, as demand will increase in this sector through out 2008.

Average rural prices and average prices in surrounding towns will also see an increase in 2008, to an average of $875,600 and $396,000, respectively.

—Dan Leahul is the resident reporter for the Calgary Real Estate News