May 2019 – Market Update

April Brought No Significant Changes in Citywide Sales Activity

No major changes in sales activity occurred this past month, however, the number of new listings does continue to decline when compared to 2018 levels.

This decline has been sufficient enough to chip away at inventory levels overall, which have softened a bit when compared to 2018 levels.

This small adjustment in levels of supply has brought about a further lowering in months of oversupply, which in April was 4.6 months. Although this still indicates oversupply in the Calgary market, this reduction does show improvement from the nearly 7 months of oversupply seen at the beginning of the year.

Ann-Marie Lurie, chief economist for CREB^® said, “Demand continues to be fairly weak in the resale housing market. But, if the reduction in supply levels persists, this could lower the amount of oversupply, which in time could create a degree of price stability.”

The total benchmark price for residential homes was $415,900 as of April in Calgary. This is a bit higher than in March, but still almost 5% below last year’s benchmark price at this time.

Sales were at 1.557 across the city in April, which was 2% higher than 2918 levels. Sales levels year-to-date remain almost 6% below last year and are 26% lower than longer-term averages.

Lurie added, “Sales have been going up primarily for the lower-priced homes, which means tighter supply in that segment. This trend will probably affect lower priced homes differently, depending on location.”

UPDATES IN THE HOUSING MARKET

Detached Homes

• Sales of detached homes increased by almost 3% in April compared to 2018, due to gains made in homes listed for less than $500,000. But, with just 930 in sales, activity remains 24% lower than long-term averages. Gains made recently were not enough to counter pullbacks that occurred earlier this year. This caused sales year-to-date to fall by more than 5%.
• Sales did not improve in all districts. In April, growth occurred in the South, South East, North West, and North East districts. Despite some signals that sales are improving, overall activity remains much lower than 10-year averages clear through every region of the city.
• Inventories of detached homes citywide in April remain slightly higher than recorded levels last year. Months of oversupply are basically the same at 4 months.
• The degree of oversupply varied a great deal depending on the area. Months of supply rose in the West, South, and City Centre districts only.
• Despite the adjustments among detached homes, overall prices in April remain below last year’s levels in all districts. The largest declines year-over-year occurred in the South, North West, and City Centre year to date.

Condominiums & Apartments

• Despite being affordable, sales activity of apartments and condos continues to decline in most districts of the city. So far this year there have only been 714 apartment condos sold, which is the lowest number since 2001.
• Declines of new listings have begun to surpass the declines in sales, causing inventories to soften. As of April, inventories of resale apartment condos came to 1,546 units, which is 16% below inventory levels in April 2018.
• The softening of inventory levels has also led to a decline in months of oversupply to just over 6 months. This still continues to be a buyers’ market, however, this trend could soften the lowering of prices if it persists.
• Prices in April of apartment condos came to $250,400, which is comparable to March, but more than 2% lower than 2018 levels and almost 17% lower than 2014 highs.

Attached Homes

• Sales activity for attached homes increased compared to 2018 levels and this is for the second month in a row, which nearly counters the declines that happened in January and February. Sales year-to-date came to 1,113 units, almost 1% lower than last year and 14% lower than long-term averages.
• Sales year-to-date have gone up in all districts except the West, North West, and City Centre.
• Increased sales and softening listings have prevented further gains in inventory levels in this sector. Months of supply have now gone down to 5 months.
• Following price declines over several months; benchmark prices for semi-detached homes in April went up over March prices. But, prices are still more than 5% lower than last year’s benchmark price levels at $395,300.
• Row prices in April were $284,900, which is more than 5% lower than last year’s levels.

REGIONAL MARKET UPDATES

Airdrie

• Sales were stronger in March and April, which countered earlier declines helping year-to-date sales to come to 363 units, which is similar to recorded sales in 2018. A decline in new listings persists, causing inventory levels in April to soften compared to 2018. Months of oversupply remain high at 5 months, but this is a nice improvement compared to 2018 when months of oversupply were more than 6 months.
• With sales rising and inventories softening, further declines in price were prevented in April when compared to March. But, April prices for the most part remained almost 4% lower than levels last year. Prices have softened among all types of property, with the largest decline year-to-date in the apartment condo sector, at 8%.

Cochrane

• Despite increasing sales in April, sales in Cochrane year-to-date softened by 6% when compared to 2018. But, there has been a softening of new listings as well, which lowers the inventory in this market. Although inventory levels and months of oversupply are still high, it’s the first time since June of last year that the months of oversupply fell below 6 months.
• The improvement in oversupply has probably prevented additional monthly price declines. Benchmark prices in April remained more than 3% lower than last year’s prices, totaling $415,100.

Okotoks

• Despite recent increases in sales, activity year-to-date slowed down compared to 2018. There has also been a softening of new listing, but not enough to prevent additional gains in inventory levels, so months of oversupply remain above 5 months.
• This persistent oversupply has affected prices. Residential prices in April came to $406,700, which is almost 4% lower than 2018 levels. Declines in prices were a bit higher among attached homes, with a decline year-over-year of almost 5%.

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