September 2019 – Market Update
Overall Increase in Sales Activity Largely Due to Lower-Priced Homes
The uptick in home sales during August was predominately spurred on by homes priced under $500,000. Increased sales combined with fewer new listings resulted in reduced inventories.
Ann-Marie Lurie, CREB® chief economist said, “There has been an improvement in employment numbers, but primarily in industries with lower-paying jobs, which is influencing the shift we’re experiencing in the market. Buyers are now focusing on homes priced under $500,000.”
Increasing sales for homes in the lower price ranges offset the declining sales in higher-priced homes, causing August home sales to rise by 6% over August 2018.
Sales activity rose for all types of homes, however condominium/apartment-style homes and attached homes experienced the largest sales growth.
Sales of attached homes rose for the sixth month in a row compared to 2018. This is the only type of home experiencing higher year-to-date sales than 2018 levels.
New listings continued to be soft in August, leading to a decline in inventory. This helps move the market in the direction of more balanced conditions.
The pressure to reduce prices is starting to ease. The benchmark price citywide in August was $426,000, which is about the same as in the previous month, but 2.6% below 2018 levels.
Despite increasing sales and lower supply, it will take time for the housing market to recover. Inventory levels are still too high, and sales activity continues to be significantly below norms. It is still a buyers’ market, with more than four months of supply.
UPDATES IN THE HOUSING MARKET
- Sales of detached homes are still slightly lower than 2018 levels, even though sales have increased in the North West and South districts in August.
- Growth across Calgary has been spurred on by homes priced below $500,000. At the same time, softening sales and rising inventories of homes priced over $500,000 have caused a rise in the months of supply, reinforcing the buyers’ market.
- August benchmark prices ranged from more than a 5% year-over-year decline in the South district to a nearly 1% decline in the South East.
Condominiums & Apartments
- For the second consecutive month, there has been an increase in sales activity for condominiums and apartments. However, these increases were met with an increase in new listings. Therefore, there were little or no changes in inventory levels and the months of supply continue to be too high.
- Sales activity is still slightly below 2018 levels. The average amount of inventory this year has softened compared to 2018.
- Benchmark prices across Calgary in August softened compared to 2018, but the North east, South East and East districts showed modest gains. However, prices are still well below the highs of 2014.
- For the sixth month in a row, attached sales year-over-year increased in Calgary. The result is 2,665 units sold year-to-date, which is almost 5% more than this time last year. In the meantime, new listings keep softening, which leads to less inventory.
- The months of supply in August was under five months, compared to more than six months in August 2018.
- These improvements have contributed to some increases in benchmark prices, yet benchmark prices in August were still 2.6% lower than 2018 levels.
REGIONAL MARKET UPDATES
- Although a decline in year-over-year sales activity occurred in August, year-to-date sales are slightly higher than 2018 levels. Most of Airdrie’s growth has been spurred on by increases in the detached sector, unlike Calgary. Listings year-to-date have softened by 13% and inventory levels are slightly down compared to 2018.
- This movement in the direction of more balanced conditions is easing the pressure to lower prices. The benchmark price in August was $334,600, which is 1.8% lower than 2018 levels.
- Encouraged by fewer new listing and consistent sales, inventories keep trending down. This supports some softening in the number of months of supply, dropping from almost eight months in August 2018 to five months this August.
- These reductions are supporting more stability in prices. The benchmark price in August was $408,000, almost 4% lower than 2018.
- Increased sales in August brought year-to-date sales to 373 units, which is a little higher than 2018 levels, but still lower than long-term averages. There continues to be a softening in new listings, causing a decline in inventories and lowering the months of supply.
- Months of supply went down from almost 10 months in 2018 to less than five months last month in August. Even so, benchmark prices this year have continued to remain more than 4% lower than 2018 levels.
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