March 2019 – Market Update

Housing Market Still Chilly Due to Persistent Oversupply

Calgary’s weak economy continues to contribute to soft sales in a housing market with elevated inventory.

The result of this is certainly reflected in prices.

“The ongoing slow down in home sales continuing into February is no surprise,” said Ann Marie Lurie, CREB® chief economist.

“Since the economic climate has not changed in any demonstrable way people working in the energy sector are concerned about job security and this affects confidence.”

February benchmark prices across Calgary were at $414,400. This figure is almost 5% below January 2018 figures, slightly below the prior month’s and more than 10% below 2014 highs.

Although the housing market in Calgary is still oversupplied, softening sales and declining prices are apparently having an influence on sellers. February experienced an 8% decline in new listings compared to February 2018, which numbered just 2,211 units.

UPDATES IN THE HOUSING MARKET

Detached Homes

• At the end of February, sales of detached homes for the first two months of 2019 totaled 1,079 units, which is 13% lower than this time last year and 30% lower than long-term averages. Home sales softened across almost all districts of the city, but not the North West. Sales activity stayed far below the usual levels in all districts.
• New listings across Calgary ranged from an increase of 15% in the North West to a 23% decline in the North district. New listings year-to-date came in at 2,544 units, which is almost 2% lower than last year.
• Despite those new listing adjustments, detached sector inventories saw a rise on average of 25% compared to 2018 levels. However, looking at the more affordable areas for detached homes, including the East and North East districts, we saw a decline in inventory levels compared to 2018.
• With months of inventory in the detached sector staying above 5 months, prices keep trending lower. Benchmark prices across the city in February were $475,600, which is 0.2% lower than January prices and more than 5% below February 2018 levels.

Condominiums & Apartments

• Even though condominiums and apartments are relatively affordable, sales continued to be slow at just 149 units.
• Unlike what’s happening with detached homes, with 7 years in a row of new listing declines, the impact is starting to affect inventory levels.
• Inventory levels came to 1,301 units in February, which is 9% lower than last year’s levels. Inventories did soften, but February’s slow sales meant that the months of oversupply remained near 9 months.
• Benchmark prices in February for condominiums and apartments were at $252,300, which represents a 1.7% decline from last year’s prices, even though they were similar to last month’s figures. Prices for condominiums and apartments have fallen by 16% over the highs of prior months.
• Benchmark prices across Calgary have softened, but certain districts have had modest gains, but not enough to eliminate prior declines. However, this is an indication that prices may be moving towards more stability in certain areas.

Attached Homes

• Things remained pretty much the same in the attached homes sector, with months of inventory staying nearly 7 months and prices remaining constant compared to January, yet still 4% lower than prices last year at this time.
• Just as with condominiums and apartments, activity can fluctuate dramatically depending on the location. Semi-detached benchmark prices softened by more than 5% compared to 2018, with the largest declines in the City Centre and South districts.
• The North district experienced a slight improvement in prices.
• Row prices were down by almost 4% from last year’s levels. Unlike semi-detached home prices, row prices softened across the entire city compared to 2018 and are still almost 14% lower than monthly highs.

REGIONAL MARKET UPDATES

Airdrie

• Total sales are 150 units so far this year in Airdrie, which is 27 units lower than recorded levels at the same time in 2018. However, these numbers compare to the average amount of activity over the past decade.
• Although the number of new listings is soft compared to last year, inventory levels have gone up to 448 units. With more inventory and lower sales, months of oversupply continue to be elevated at 5 months.
• Prices for detached homes in February came to $355,200, which is more than 4% lower than this time last year.

Cochrane

• Residential sales year-to-date compare to 2018 levels due to the gains made in sales of detached homes, for the most part.
• New listings in the first 2 months compared to the same time last year, however, inventory levels did go up. The months of oversupply stayed just under 7 months.
• Due to the oversupply, prices year-to-date went down compared to 2018. Year-over-year, benchmark prices in February were $413,300, which was 1.3% below 2018 prices.

Okotoks

• Sales in January and February 2019 were 30 units below this time in 2018. New listings also softened compared to 2018, which caused inventory levels to go up and months of oversupply to stay elevated at 10 months.
• Continual oversupply keeps weighing down benchmark prices with February prices at $411,500, representing a 1.3% decline from last month and a 4.6% decline over this same time last year.

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