December 2018 – Market Update

Challenging Economy Continues to Affect the Resale Market

Sales in Calgary for November came to 1,171 units, which is lower than long-term averages.

So far this year sales have reached 15,349 units, which is a 14% decline over 2017 figures and nearly 20% lower than long-term averages.

Ann-Marie Lurie, CREB^® chief economist said, “Consumer confidence has waned over the last month due to the challenges facing the energy sector. When you combine that with weak employment and lending rates that continue to grow, it’s not surprising that ownership demand has softened.”

New listings in November eased by 7% compared to this time last year. The downturn in new listings does help to prevent further gains in inventory. There are currently 6,501 total units in inventory, however this is far more than the 5,683 units that were in inventory at this time last year and 32% higher than normal levels for the month of November.

Lurie added, “With more supply and weaker sales a buyer’s market continues in Calgary, which just causes prices to decline even more.”

In November the benchmark price across the city was $422,600, which is almost 1% lower than October’s and more than 3% lower than last year at this time.

Sales have slowed in all price ranges year-to-date, except for homes priced under $200,000, which currently makes up 6% of all sales. The largest sales decline is being experienced in the $600,000 to $999,999 price range.

Tom Westcott, CREB^® president said, “In any market, you need an affordable product if you expect steady sales.”

He added, “The good news is that buyers may be able to buy a home that they could never have imagined affording in the past. Sellers must stay up-to-date on what is actually selling, in their own neighbourhood as well as in surrounding areas.”

UPDATES IN THE HOUSING MARKET

Detached Homes

• Sales for detached homes in November were down across all districts. Sales in all of Calgary were 679 units, a 21% decrease in activity compared to a typical November.
• The number of new listings went down 3% when compared to this time last year. Declines in the North, North East and South East districts were what pulled the figures down for the most part. New listings year-to-date in 2018 have gone up in all districts, except the East and North East.
• The detached home sector inventories totalled 3,491, which is 26% higher than 2018 levels at this time. There has been five months of supply at this point, far more than the three-month usual for the month of November.
• Benchmark prices in November for detached homes came to $486,000, which is 1% less than October’s figures and 3% lower than this time in 2017. This comes to almost 7% lower than the monthly highs on record for October 2014.
• The detached home sector inventories totalled 3,491, which is 26% higher than 2018 levels at this time. There has been five months of supply at this point, far more than the three-month usual for the month of November.
• Benchmark prices in November for detached homes came to $486,000, which is 1% less than October’s figures and 3% lower than this time in 2017. This comes to almost 7% lower than the monthly highs on record for October 2014.
• Prices have softened clear across Calgary in November. Year-to-date, the largest declines have been in the North and North East Districts. This has very likely been caused by the competition created by the new-home sector. The South and North West are the two districts furthest from any kind of price recovery.

Condominiums & Apartments

• Despite November’s year-over-year gains, condominium and apartment sales citywide have only come to 2,557 units up until now. This is 5% below last year’s figures and 21% lower than long-term averages.
• Most of the condominium activity is in the City Centre and makes up 48% of all sales.
• After years of oversupply, new listings for apartments continues to soften, which helps prevent additional large gains in inventory levels and even helps reduce inventories in the East, North East and South districts.
• Despite some fluctuation in inventory levels, most districts still grapple with oversupply, leading to price declines, which have ranged this year from almost 6% in the East district down to just 2% in both the North West and City Centre districts.

Attached Homes

• Sales of attached homes came to 3,344 units year-to-date, which is a 16% decline over 2017 and 14% lower than long-term averages. Across most of Calgary there was a softening of sales activity, apart from the North East district where sales continued to be relatively steady due to improved row activity.
• For the most part, the rise in new listings continues to push inventory levels higher and these gains are mostly in semi-detached homes.
• The oversupply situation has depressed prices. The benchmark price for semi-detached homes in November came to $400,700. This represents a 0.67% monthly decline and a 3.3% year-over-year decline. Recent declines in price have eliminated any gains that occurred in this sector last year. Year-to-year prices compare closely with figures in 2017.
• Row prices are also inching down, but not as quickly as the prices of semi-detached homes. Row prices in November were $292,900, which is a 0.2% decline from October and a little more than 3% lower than 2017 levels. For the most part, year-to-date prices are still almost 2% lower than last year’s prices and almost 10% lower than previous highs.

REGIONAL MARKET UPDATE

Airdrie

• The housing market in Airdrie is still declining in sales, while inventory continues to rise. The perpetual oversupply has caused a decline in benchmark prices for detached homes.
• Sales activity so far this year in Airdrie has gone down by 142 units year-over-year, with sales currently at 1,101 units. New listings so far in 2018 compare to 2017, but are still higher than recorded long-term averages.
• So far this year the average inventory is nearly 18% higher than at this time last year, maintaining the average months of oversupply at approximately six months. The persistent pressure has caused house prices to decline, with the benchmark value year-to-date of detached homes now at $342,773, representing a decline year-over-year of almost 2%.

Cochrane

• Sales of residential homes in Cochrane year-to-date have gone down 58 units, making the total units sold so far this year 573. These levels compare to other similar times in the past several years and are actually represent an increase in long-term averages.
• New listings keep on reaching historical highs for each period so far this year. New Listing levels in 2018 so far are 308 units, which actually represents an increase in long-term averages. Average inventory levels so far this year are 14% higher than at the same time last year.
• Despite recent declines, benchmark prices for detached homes year-to-date have remained steady when you compare them with last year’s prices.

Okotoks

• Sales of residential homes year-to-date have declined to just 449 units, which is similar to 2010 levels.
• New listings are still a bit higher than in 2017. Oversupply continues in Okotoks, with average inventories so far this year at 53 units higher than at this time last year.
• Despite weak sales and increased supply, prices for detached homes in Okotoks show slight increases. The average benchmark price for detached homes year-to-date came to $436,091, which is 1.5% higher than 2017.

 

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