September 2017 – Market Update

Stepping back to see the trend

The numbers are in; inventory increased and sales dropped in September. But is that really all there is to it? Not even close!

Overall, here in Calgary, we can see that sales are still higher than last year. Strong gains for the first 6 months of 2017 have put the number of Calgary sales a whopping 7% higher than where we were this time last year (although still 11% below long-term averages). While the trend is clearly positive, we are looking at some hurdles that still need to be cleared.

Across all property types in Calgary we saw inventories rise to a total of 6,861 units.  The multi-family sector for both attached and apartment style homes saw the highest inventory on record for the month of September.  With inventory levels rising, price recovery has lost some momentum over recent months.

Overall in September we saw a total of 3,266 new listings, a year over year gain of almost 10%.

There appear to be several factors having a distinct influence on the number of new listings. After seeing falling prices over the past two years, there is no doubt that many sellers were simply waiting for market conditions to improve before choosing to list their homes. This is a cycle that Calgary has seen many times over and while the number may seem alarming at a glance, it is to be entirely expected. Essentially, the stability in the market has prompted many sellers to delay no longer the decision to sell.

It is also worth noting that in some segments and areas, the increased supply of new homes are having a direct impact on the total housing supply, which in turn is preventing price increases. The positive here is that it does present an opportunity for buyers to step into a home that was previously financially unattainable.

Septembers unadjusted benchmark prices totaled $441,500. While that is 0.2% below last month, it is still nearly 1% above last year. We can observe the slight downward pressure on prices due to the increase in inventory.

Prices in the detached sector remain relatively stable compared to last year. Condominium apartment prices remain 4% below 2016 levels and 12% below 2014 highs. This sector continues to struggle with price declines resulting from excess supply as months of supply pushed above eight months.