October 2019 – Market Update
If the Trends Continue, the Housing Market May Become More Balanced
For three months in a row now there has been an increase in Calgary’s sales activity compared to 2018 figures while new listings and inventories have softened year-over-year. If this continues the housing market should become more stable.
Ann-Marie Lurie, CREB® chief economist, says, “Declining prices have caused some buyers to return to the market.” She added that increased sales are primarily due to homes priced under $500,000.
There was a 16% increase in condominium and apartment sales last month, which represents this sector’s most active September since 2015. The growth year-to-date in condominium and attached homes were enough to offset a slight decline in detached homes, which resulted in a sales growth year-to-date of almost 1% in Calgary.
Despite increased sales and reduced inventory, the city’s overall housing market is still oversupplied, which continues to dampen prices.
Lurie went on to add that while demand for housing is increasing a bit, sales are still weak. Yes, the market is beginning to stabilize, but this is primarily due to supply adjustments in Calgary.
Inventory levels remained high in September at 6,889 units, however, this represents a 13% decline compared to 2018. The months of supply in Calgary is currently at 5 months, which still favors buyers, but not as much as we saw last year at this time.
Across Calgary, the unadjusted benchmark price in September was $424,900, which is 2% below 2018 levels.
UPDATES IN THE HOUSING MARKET
- Increases in sales over the three previous months were not enough to counter the pullbacks that happened earlier this year. Year-to-date sales figures are almost 1% below 2018 levels. Despite declines across the city, sales increased in both the South and North West districts, due to noteworthy sales gains in homes priced under $500,000.
- The months of supply are still elevated at more than 4 months, but this shows improvement compared to last year at the same time.
- September’s benchmark prices ranged from a decline of over 4% year-over-year in the South district, to fairly stable in the West, North and North East districts.
Condominiums & Apartments
- There was an increase in sales of 16% last month, which makes it the best recorded September in the last 3 years. Despite recent increases in sales activity, levels year-to-date are still stable compared to 2018, but much lower than longer-term trends.
- Condominium and apartment sales varied across Calgary. There was significant growth in the South East and North districts where both have experienced major new-home development, likely influencing resale activity.
- Oversupply is still weighing on this segment’s prices, with unadjusted prices still 17% lower than 2014 highs.
- Year-to-date has seen increases in sales in both row and semi-detached homes by over 5% compared to 2018. These are the only types of homes that have seen significant year-over-year gains.
- New listings are still soft, which continues to reduce inventory as well as the months of oversupply.
- It’s still a buyers’ market despite some reductions in months of supply and prices are still softening. Benchmark prices year-to-date declines went from a high of almost 6% in the City Centre, down to a low of 3% in the North East.
REGIONAL MARKET UPDATES
- There are continuing signs of growth in the resale market. Sales activity increased in September, causing an increase in year-to-date sales by almost 3%. New listings softened, which reduced market inventory.
- The market continues to be a little oversupplied, but there is edging down in the months of supply compared to 2018. This is creating more stability in the movement of prices. The unadjusted benchmark price in September was almost 2% below 2018 levels.
- Sales in Cochrane are still increasing and levels year-to-date are still the third-highest ever recorded. Cochrane is facing fewer challenges concerning demand than Calgary, but elevated inventories are still weighing prices down.
- Inventories are beginning to go down. If this keeps up, the market will likely become more balanced and, in time support more stable prices.
- Sales are still recovering from last year’s recorded lows. Increasing sales and the softening of new listings are causing declines in inventory year-over-year and reducing market oversupply conditions.
- The market is becoming more balanced, but prices are not reacting much. Benchmark prices year-to-date are still just over 4% below last year’s levels.
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