November 2019 – Market Update

Homes under $500,000 moving to more balanced conditions

Sales activity across Calgary increased by nearly 10% compared to 2018, driven primarily by increased sales for attached homes, condominiums and apartments.

New listings softened, reducing inventory levels and oversupply conditions. Even though the market is becoming more balanced, it still suffers from oversupply and prices are still lower than 2018 levels.

Ann-Marie Lurid, CREB^® chief economist said, “Employment has shifted in the city, with job growth occurring in our non-traditional sectors and often at a different pay scale. This is consistent with the shift to more affordable housing product”

“However, at the higher end of the market the amount of oversupply is rising, as supply cannot shift enough to compensate for the reductions in demand. This is likely causing divergent trends in pricing and preventing prices from stabilizing across the city.”

We are experiencing inconsistent signs of improvement across all types of housing and price ranges. Increases in sales are being seen in the lower price ranges in all types of housing. But this has failed to shift prices, as persistent oversupply conditions continue to press on prices.

Benchmark prices citywide in October were $422,900, slightly below the previous month’s levels and 2% below 2018 levels.

UPDATES IN THE HOUSING MARKET

Detached

• This month’s sales activity is slightly higher than 2018 levels, due to growth in every district except the North and North East. But citywide levels year-to-date still compare with 2018 levels and are more than 19% below longer-term trends.
• New listings kept softening this month, but not as fast as levels recorded throughout the past 8 months.
• Increased sales activity and the softening of new listings reduced inventory levels by 15%. With an inventory of 3,391 units, the months of supply is slightly under 4 months. Compared to 2018, this shows a decline, but it remains high according to longer-term trends. There was a softening in months of supply in all districts but the North, due to more pressure from the new-home segment.
• Benchmark prices softened over last month, caused by declines in every district except the East and South East. October prices overall stayed almost 2% below 2018 levels and almost 8% below previous highs.

Condominiums & Apartments

• Sales of condos and apartments kept improving in October while new listings softened. This helped to lower inventory levels and months of oversupply came down to slightly less than 6 months. Despite increases, it continued to be a buyers’ market.
• Increases in sales year-to-date resulted from gains in the South East, West and North sectors. Reductions in inventory occurred in every district but in the South East.
• Overall prices year-to-date remained more than 2% below 2018 levels and almost 17% below peak prices. But there are signs that prices may be stabilizing, with prices in the East, South East, and North East staying comparable to 2018.

Attached

• The greatest increase in sales activity is in attached homes, with year-to-date increases of almost 7%. Increases occurred in all districts but the North East and North West.
• New listings softened by 8% so far in 2019, leading to declines in inventory and reducing the amount of oversupply.
• Like most sectors, there continues to be an oversupply of attached homes, which is leading to adjustments in pricing. As of October, row and semi-detached prices remained 4% and 2% below 2018 levels, respectively. There continues to be a softening of prices in almost all districts and these remain much lower than previous highs.

REGIONAL MARKET UPDATES

Airdrie

• Sales activity among semi-detached, row, condo and apartment homes increased over 2018, resulting in an increase in total sales year-to-date by 3%, which is a little lower than longer-term averages.
• There was a softening of new listings, resulting in the lowest levels of the past 5 years. This helped to lower inventory levels to below 2018 levels.
• These improvements are reducing the pressure on prices, but not enough to wipe out previous declines. Overall benchmark prices year-to-date remain more than 3% below 2018 levels.

Cochrane

• Additional gains in October resulted in a 3% increase in sales year-to-date. An 11% decrease in new listings softened the supply resulting in a reduction of the months of supply.
• However, the decreases in oversupply have not yet influenced monthly movements in price. Benchmark prices are still more than 3% below 2018 levels and far below previous highs, which is also true of most other municipalities.

Okotoks

• Following a definitive decrease in sales in 2018, sales have continued to increase this month. This resulted in an improvement year-to-date to levels just under the figures recorded after the recession.
• New Listings are still softening, which lowers inventory levels to bring months of supply to just less than 5 months. This shows an improvement of almost 6 months from 2018 levels.
• With the market less oversupplied, we can begin to see some softening of the pressure on prices. Overall benchmark prices year-to-date were $410,090. This is 4% below 2018 levels.

If you already have a home in Calgary and are want to know what it’s worth – check out our FREE home valuation tool here.