NEWS FROM "THE HOUSE TEAM"

The country's hottest real estate market could be heading for a fall but experts say that's a good thing because it will take the froth out of the market. The Canadian Real Estate Association said yesterday the average price of a home sold in Calgary rose to $374,067 last month, a 47% increase from a year ago. But the good news for anybody buying a home in the city is the number of new listings in October was up 51.3% from a year ago.

That surge in supply should help to slow the pace of price increases in Calgary's housing market, though it won't happen right away. "It takes time for prices to adjust to changes in market balance. In Calgary, in particular, prices will return to earth but it is going to take a few months," said Gregory Klump, chief economist with the association, which represents real estate boards across the country.
The booming Alberta economy has helped push Calgary past Toronto this year as the second-most expensive place in the country to own a home. Vancouver still holds top spot with the average price of a home sold in the city last month rising 20.3% from a year ago to $548,022. But 4,257 Calgary homes were put up for sale last month, up from 2,814 a year earlier.

The story was similar in Edmonton, where new listings were up 27%.
Phil Soper, chief executive of Royal LePage Real Estate Services Ltd., said it is pretty clear the real estate market has nowhere to go but down."The two leading indicators of the end of an expansion cycle are a decrease in the number of units that are selling or a decrease in the rate units are selling and an increase in inventory levels because homes are taking longer to sell," Mr. Soper said. "Both are happening and it's a trend that started in the fourth quarter of 2005."

The statistics show the Canadian real estate market will set a record for sales and price this year. Despite those records, Mr. Soper noted the sales gains are negligible at 0.1% growth."The next thing that occurs is that people that have to sell their home adjust their price
expectations, and that affects the rate of price appreciation. That has happened already in Central Canada, Atlantic Canada and we will see it in British Columbia, Saskatchewan and Manitoba in the coming months," he said.

The Alberta market is different because it is now being affected by speculation, Mr. Soper said. "There are people listing homes because they feel this is a time to surface some value." The national statistics show an increase in housing supply is becoming an issue across
the country. Nationally, 47,744 homes were put up for sale last month, a 10% increase from a year ago.

It's one of the reasons the CREA has said it expected prices to rise by only 6% next year. Canada Mortgage and Housing Corp. has predicted a 5.7% increase next year. Mr. Soper expects to be in the same range when his company makes its 2007 forecast next month.

Elton Ash, vice-president of Re/Max of Western Canada, noted his company came out with a forecast for a 5%-to-6% national price increase in 2007. He said he expects the pace of price appreciation to slow, especially in Calgary.