April 2018 – Market Update

Inventory Rising on the Housing Market with Prices Remaining Stable

Home sales have continued to be slow in Calgary during the first quarter of the year in Calgary. This was not unexpected since sales had ramped up towards the end of 2017 once the lending market changed.

Sales this first quarter through March came to 3,423 units, which was almost 18% lower than 2017 levels and 24% lower than the long-term average. Slowing sales with a moderate increase in new listings brought about the rise in supply, which has lasted more than four months.

Ann-Marie Lurie, CREB^® chief economist, said, “The gradual improvement in economic conditions has not been sufficient to overcome the current effects of higher interest rates and stricter conditions.”

“The housing market is entering its busiest quarters flush with inventory, which may cause some fluctuations in price. However, the growing economy is likely to keep overall prices from falling precipitously.”

Although prices have been dropping slightly on a quarterly basis, they have remained relatively stable compared to 2017 levels. This is likely due to small gains made in the detached market, which has made up for the declines seen in the apartment market.

The benchmark price across the city for detached homes averaged $502,000 this first quarter. While this is a bit lower than the previous quarter, the fourth quarter of 2017, it does compare to prices in the first quarter of 2017. The detached home priced averaged 503,800 in March, which was 3.6% lower than pre-recession highs, but 1% above recession lows.

Tom Westcott, CREB^® president, said, “Today’s market is stronger than what existed at the height of the recession.”

“If you’re a prospective homebuyer, you can certainly find good value. If you’re selling, you can assuredly get a good price. The key is to stay well informed, no matter what the economic conditions are. There will always be market differences according to what type of real estate it is and its location.”

Inventories for detached homes were low during the first quarter of last year if you compare them to historical norms. This year, average inventories for detached homes are 2,573 units higher than first quarter averages last year and 10% lower than first quarter averages in 2015 and 2016.

There promises to be more inventory this spring than we had last year, which will slow down price recovery to some extent. Prices will vary according to the supply in any given location and the type of home.

Want some more area specific information for your current or next home? Contact us and let us know how we can help!