August 2019 – Market Update
Four Straight Months Now of Growing Sales & Declines in Inventory
For four straight months there have been declining inventories compared to 2018. This is the result of an uptick in sales and the slowing of new listings.
However, Calgary is still experiencing a buyer’s market. For the market to become more balanced, supply reduction would need to continue relative to sales.
Ann-Marie Lurie, CREB® chief economist says, “We are beginning to see supply reductions across the new-home, resale and rental markets.”
“This adjustment, along with the lowering of demand will create more balanced market conditions, which will support more stable prices. If we continue in this direction, the housing market in Calgary should improve enough to anticipate a recovery as we approach 2020.”
Sales activity year-to-date is slightly lower than 2018 levels and far lower than longer-term averages. The good news is that the reduced inventory has softened the months of supply to 4.5 months, which is a big improvement from last year’s 5.5 months.
Now that there is less oversupply, prices are beginning to show signs of stabilizing month-after-month. This is easing the decline in prices year-over-year. Overall, the benchmark prices year-to-date are still more than 4% lower than 2018 levels.
UPDATES IN THE HOUSING MARKET
- July’s sales activity increased slightly over 2018 levels, but not enough of cancel out prior declines. Sales year-to-date are still below 2018 levels. Despite this, trends show significant differences according to price range.
- For detached homes, new listings are still softening, which lowers inventory in most price ranges. This trend is causing declines year-over-year in months of supply in nearly all price ranges, homes priced over $1 million are the lone exception.
- Adjustments in inventories and sales also show significant variability by district. Sales year-to-date across most districts have declined, apart from the South and North West districts. Inventories have not softened across all districts because July year-over-year gains occurred in the West and City Centre districts.
- There is still a persistent buyers’ market, with benchmark prices for detached homes in July at $488,400. This is more than 3% below 2018 levels. Declines in prices range from a low of 1.4% in the North East district to a high of 5.7% in the South district.
Condominiums & Apartments
- Although sales improved in July, sales year-to-date for condos and apartments softened by more than 4% and are still way below long-term averages.
- Affecting sales in the resale market are the abundant rental supply and choices available in the new-home sector. But inventories are continuing to adjust, which does reduce the oversupply, so that helps.
- While conditions still favour the buyer, prices will keep edging downward. However, benchmark price declines year-to-date are not happening in all districts, since there have been modest gains in the North East district.
- Attached homes are the only sector that has recorded year-to-date sales growth, which is up almost 4%. These gains likely resulted from the fact that attached homes are more affordable than detached homes.
- The number of new listings coming on the market continues to soften. The result is declines in inventory and reduced oversupply. Like other sectors, it’s still a buyers’ market in this segment, which prevents any major shift in prices.
- Prices for both semi-detached and row houses are still more than 3% lower than 2018 levels and far lower than historical highs. Price declines for attached homes have been the most extreme in the City Centre, at more than 5%.
REGIONAL MARKET UPDATES
- Sales year-over-year have gone up in Airdrie for the 5th month in a row. Sales year-to-date are now 757 units, which is more than 3% higher than 2018. Improved sales combined with fewer new listings have brought about less inventory compared to 2018. This market is becoming more balanced.
- Oversupply is softening, but benchmark prices in July are still more than 3% lower than 2018. Prices are declining more steeply in the higher density sectors.
- Residential sales year-to-date in Cochrane came to 376 units, which is a little below 2018 levels. There has been a decline of new listing, which means 4 months in a row with a decline in inventory year-over-year.
- The result is a softening in the amount of oversupply, which supports more stable prices. The benchmark price in July was $408,300 in Cochrane, more than 4% below 2018 levels.
- Residential sales are 321 units in Okotoks at this point in 2019. This figure is similar to 2018 figures, but lower than long-term trends. With new listings continuing to decline, so does the inventory, which eases the months of oversupply.
With the easing in oversupply, prices are beginning to show improvement when compared to prices in June. However, benchmark prices year-to-date are still more than 4% below 2018 levels.
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