After that is really unpredictable.
After that is really unpredictable.
If this was written on April 1, it might be interpreted as a joke.
But the housing market is no longer a joke. It is hot, very hot. March sales were the best since the glorious spring of 2007. Personally, I was involved in over a half dozen multi-offer deals, and needless to say, with the competitive bidding, it was difficult to win any of them.
Over the past 4 or 5 months we have gone from a bonafide buyer's market to a hot seller's market. Listings had been pulled off, but now, as a response, they are being "dumped" on the market by the hundreds every day. Of course, there are gems, but they are priced high. There are no longer any bargains. The multi-bids (I've seen 5 or 6 bids in the first few hours of a listing), happen when something is listed at an obvious low price to trigger multiple offers. All of these are the detached houses which have shown the biggest bounce back price wise. At nearly 11% increase from this time last year, the real growth has to put in context: prices dropped 5% from March (onslaught of covid) to November when they bottomed, meaning that the increase since then has really been about 15 or 16% --- IN JUST A FEW MONTHS!
Detached homes sold 147% more than last year, Townhouses 152% more, Semi-detached 134% more and even apartments did well at 76% more. New listings are creeping up as mentioned from 57% to 95% across the board. Still that leaves active listings between 7.5% down (detached), 3% down in townhouses, a whopping 30% down in Semi-detached (builders have stopped building these or pulled them off the market), and only condos have an increase in Active listings by 17%. Average. As mentioned, detached are up 11 to 12% in average price, townhouses 7 percent, semi-detached up 4.65%, and for the first time, condos are UP by a percent.
Will the frenzy continue? Certainly not at this rate - but Calgary's market has legs. We're still a ways from the 2014 levels and we can easily pass that once the pandemic ends. And we have a long way to go to catch Ontario and BC house prices. With all the economic stimulus going on everywhere, we could ride this train until oil prices find their healthy price point. There's also indication a lot of economic diversity is about to happen. Every day from 70 to 150 houses sell, with many more than a million dollars, and plenty in the 600-900 range, which we never saw before.
But then, people are still unemployed -- but they're not the ones buying the houses. I think we'll have a healthy spring/summer, maybe a bit of drop off in late summer.
After that is really unpredictable.
Greetings. Having experienced many multiple offer deals representing buyers, and well priced homes figuratively flying off the shelves days or hours after being listed, I can concur it is officially a seller's market in Calgary. Single family homes, especially the older ones in established neighborhoods with upgrades or the possibility of upgrades are really selling and at much higher prices. In some cases, almost comparable to peak prices in 2014.
With low inventory and keen buyer interest, it appears more listings are starting to hit the market. So spring craziness has already begun. All the elements described in my last newsletter are driving the activity: extremely low interest rates, people with money to burn (ie whoever is not unemployed right now), competitive prices for a city this size, and growing confidence that a return to normality is forthcoming.
Collectively, all home sales compared to last February were up 54% but new listings started to catch up at the end of the month as sellers listed to take advantage - up 13%. Active listings across the board are still down nearly 21%. Prices are up, even averaged out - Average Price nearly 9%, medium prices nearly 7 %. Days on market (DOM) down 20%,
We see even more incredible figures in the detached market which seems to be driving everything now: Total sales up at whopping 66%, new listings 17.5% but active listings still way down from even last year's low figures - 30%. Here is where homeowners can smile and buyers can grimace -- in just a few months, prices of detached houses have risen 10%, recovering more than half of their losses from the past 6 years. Some houses as I mentioned have recouped nearly all losses.
Obviously Townhouses and Semi-Detached haven't done as well, but have seen a decent correction. First time buyers or downsizers seem to be gravitating to the lower price Townhouses as sales there are up nearly 60% compared to half that for semi-detached. New listings are up by 24% for townhouses, but virtually unchanged from last February's figures for semi-detached. Builders have stopped building based on last years dismal figures. Active listings are down 7.5% for Townhouses, a decent 39% for semi-d homes. Medium prices up 3% for townhouses but rebounded in the semi market - up an amazing 27%. Less of an upward trend in average price at 1.6% up and 12% up respectively. DOM is down 8.6 for Townhouses, down 35% for semi-d.
Apartments are still struggling. Total sales up 30%, new listings up only 2.3% percent, active listings still down at 2.5% However, prices are still dropping here - 1.9% medium price; 7.35% average price.
So condos may have not seen bottom yet but everything else seems to be on a burn.
Despite the cold weather, the market continues to be healthy, very healthy. During what now seems a balmy January, the frenzied selling and buying of the past few months of 2020 continued as investors, first time buyers and generally optimistic home seekers flooded the market. We went from literally 6 years of a buyers' market to a bonafide sellers' in the span of weeks or a couple of months. I have been involved in multiple offer deals or seen houses listed and sold within days on a regular basis. Listings that were sitting dormant for months suddenly started flying off the shelf. Low interest rates, an influx of 30,000 people into Alberta, confidence in low prices compared to other large cities, and a spirit of ownership that seems to thrive in Alberta have quickly turned things around. No one knows how long it will last, but most believe at least into the spring market.
The figures below support the observations. The following are the PERCENTAGE CHANGE from January of last year, the month before the pandemic had any effect on the market.
All categories of housing fared brilliantly if they were well priced. As a total market, sales were up by an astounding 40% but in February so far that has increased to 60%. New listings are down 5%, Active listings down 22%, indicating a lack of product on the market. For the first time, we've seen a huge increase in prices, obliterating losses last year and the previous year combined: Medium price up 4.7%, Average price up 4.4%. In February so far, medium prices from last February have jumped an astounding 9% and average prices by 7.5%. Days on the market (DOM) down by a significant 15%.
In the detached sector, the lack of housing have really had an impact. Total sales were up 42% while new listings dropped by 8%, leaving active listings down by an incredible 32% from last year. In February total sales so far have blown away last February's numbers by 69%. This of course has had an impact on prices: medium prices up by 4.5% and average prices up by 3.7%. Days on market dropped by 13% and 20% so far in February.
Semi detached have finally turned around though prices are still challenged. Total sales are way up - 68% and new listing continue to drop by nearly 12%, reflecting the drop in new builds. Active listing are way down by 40%. Yet still prices continue to drop as covid obviously has had an impact here -- people want bigger yards: Medium prices and average prices are down by 4.7%. Sales are quicker though (DOM) is down 17%.
Even condos/apartment have seen a huge improvement, though the active listings have only dropped by 1.6% and new listings by 3%. Total sales are up 26% and prices have suddenly turned around - medium price up by 4.76; average price by an incredible 9.6%. DOM are less at nearly 17%.
These figures show a sellers' market in Calgary. If you have been thinking about selling, best advice is to price it right (we're still down from 2014 levels) and get your property on the market during the spring months in case of a sudden correction. If you've been sitting on the fence to buy, the turnaround has happened. The bottom was last Sept/Oct and it's been up since then, and significantly.
With sales of 1200 homes, Calgary has seen the best December sales since 2007. Attractive interest rates along with prices that remain lower than several years ago have likely supported some of the recovery in the second half of the year. However, it is important to note that annual sales activity declined by one per cent compared to last year and remain well below long-term averages.
Although New listings in December across the board increased by 11 per cent,, the number of sales exceeded the number of new listings, plus a lot of listings were either terminated or expired, and therefore inventory has become greatly reduced. Reductions in supply and improving demand in the second half of the year have contributed to some of the recent price improvements in the market. However, the recent gain in the benchmark price was not enough to offset earlier pullbacks as the annual residential benchmark price in Calgary declined by one per cent over last year because of the early lockdown and fears brought about by the onset of Covid-19.
The pandemic has resulted in a significant shift in economic conditions, yet the housing market is entering 2021 in far more balanced conditions than we have seen in over five years. This will help provide some cushion for the market moving into 2021, but conditions will continue to vary depending on price range, location, and product type. Generally, like in November, the shift from condo purchases (for first time home buyers) to townhouses has led to a significant turnaround in those. Added to this was a conscious decision by builders to focus on the cheaper option of building townhouses where we once saw the less profitable semi-detached. The higher price here added to the nearly 6% average price of townhouses from last December and a 33% increase in sales. Also doing very well is the detached home. Total sales here are up a whopping 42.5% which led to a significant 31% drop in active listings. Average prices though were only up about 1% as it's becoming obvious, the sales are driven by lower prices. Prices should begin to rise in the spring with detached as months of supply here have dropped well over 52% from last year and days on the market is now 17% lower than last December. I've been involved in several situations where a well priced detached property sold within days of being listed.
Apartment sales are up by 38% but so are listings (up nearly 20%). Condo/apt continue to drop in value both in medium and average price by about 14% and despite the sales, still has 2% higher listings than this time last year due to a flurry of newer listings earlier in the year. Semi-detached has seen total sales up by 39% and a similar percentage drop in active listings, yet medium prices are nearly 12% lower than last year, and the average price 5.4% lower. This is reflective of a trend away from these house types, both new and old, and as a result we are seeing builders in the inner city turning more to the townhouse concept.
Below is a chart of December 2020/december 2019 figures:
Welcome back and seasons greeting.
For the sixth month in a row, sales in the Calgary market recorded a year-over-year gain. Sales growth over the past several months has been the strongest seen in the past five years, but the activity has not been strong enough to offset the pullbacks from the spring. Year-to-date sales remain over three per cent lower than last year's levels.
New listings continue to slow, reducing inventory in the market. On a year-to-date basis, new listings have eased by nearly ten per cent and are at the lowest level recorded since 2001. This has reduced the oversupply that has been impacting the market for nearly five years. The sales in the months past have surprised all, considering job losses and unemployment. My feeling is they are driven by bargain hunters and a general belief that prices are at the bottom. The further reduction of supply adds the slight gains in prices we've seen recently. As of November, the benchmark price was $423,600. This is nearly two per cent higher than last year's levels.
However, conditions vary depending on price range. There is not a lot of supply for affordable homes in each product type because of high demand. This is likely causing differing price trends in the lower end of the market versus the higher end.
November sales activity improved across every district, contributing to a year-over-year citywide increase of 26 per cent. Improving sales over the past six months have helped offset some of the pullbacks from earlier in the year, as year-to-date sales were only two per cent lower than last year's levels. However last year's levels were low compared to historic averages.
Like other sectors, inventory in the detached market has also eased due to the sharp decline in new listings. This has kept the months of supply below three months for the past three months. The tighter market conditions are supporting price gains. As of November, the detached benchmark price improved by nearly three per cent compared to last year for a total of $492,000. However, prices did not improve across all districts, as the City Centre continues to record prices that are one per cent lower than last year's levels.
Activity for this product type does vary significantly depending on location and price range. The pullback in new listings relative to sales has caused significant reductions in inventory for homes priced below $500,000. Higher price ranges have also seen some declining inventory, but the degree of decline has not been as significant. In fact, the market is exhibiting sellers' market conditions for homes priced below $500,000, while still favouring the buyer for homes priced above $700,000.
Year-over-year gains in sales were met with slower new listings, resulting in inventory reductions and a month of supply of three months. While conditions are not as tight in the semi-detached market as they are in the detached market, the reductions in supply relative to demand were enough to support further monthly gains in the benchmark price.
As of November, the benchmark price was $395,100, which is one per cent higher than last year's levels. Activity did vary depending on location, as price gains were the highest in the South East district, while prices remained just below last year's levels in the City Centre.
There have also been notable differences within this market depending on price range. The months of supply has declined significantly for product priced below $400,000. This decline is likely contributing to some of the differing price trends throughout the districts of the city. Newer Semi-Detached priced over $650,000 are still having significant difficulty in selling.
Year-over-year gains in the row sector continued in November and were enough to cause year-to-date sales to remain at levels similar to last year. Bucking the trend from other sectors, new listings rose compared to last year, easing some of the downward pressure on inventory levels. The months of supply stayed above four months, higher than levels seen in both the detached and semi-detached sectors, but a significant improvement from the nearly six months of supply recorded last November.
Row prices also showed signs of stabilizing, as November prices remained comparable to last year's levels. Despite some of the monthly gains, on a year-to-date basis, prices remain nearly two per cent lower than last year's levels and have eased across all districts except the City Centre, West and East.
Following seven months of year-over-year declines, apartment condo sales improved over last year's levels. However, last November was an exceptionally weak month for apartment sales. Year-to-date apartment sales totalled 2,209, a 13 per cent decline from last year and nearly 30 per cent lower than longer-term averages.
New listings did ease slightly this month, placing some downward pressure on inventory that was missing earlier in the year. However, inventory remains higher than last year's levels and the months of supply is still elevated at nearly eight months. The oversupply in this market continues to place downward pressure on prices, which not only eased relative to last month, but remain one per cent lower than last year's prices. The only district to see some positive momentum is the North, where prices rose slightly compared to last year.
The past few days and weeks have shown what appears to be the beginning of a general trend downward in both sales and new listings. It all points to a possible flat market during the holiday season and maybe pushing into late winter. It remains to be seen what the spring will see. There is confidence that house prices are good though supplies are down. If supply increases, so too should sales.
So as we go into holiday, it's all wait and see. To that end, buyers are generally still in the driver's seat especially for the houses priced 600K and over. Attached please find a statistical report on November's market, a regional monthly stats package, and a third quarter report.
I would like to wish all a happy holiday season.
The market continues to be buoyed by very low interest rates and confidence in mid range housing (400-600K). Some days this month saw more sales than new listings which is unprecedented in this type of market. And with a slew of terminated or expired listings leaving the market over past few weeks the ratio of active listings to sales keeps dropping. However, sales are down substantially in the 700+ range. In fact, 700-800K sales barely represent 5% of the figures. Of course, this hits the high middle end homes and new detached builds in the inner city or larger homes in the suburbs especially.
In general, the market is moving in a very positive direction. Total sales are up 27% from November of last year, new listings have dropped by nearly 13% and the median price is up 1.3%. Even days on market (DOM) is down nearly 18%. The detached market has virtually the same improvements except active listings which is even down over 23% contributing to DOM down 23%. There have been quick sales here and multiple offers on well priced detached homes. It does mean the good well priced homes in the 400 to 600K range are figuratively flying off the shelves so it makes it tough for buyers in that market. There have been sales above the 950K mark as well as people take advantage of expensive homes with very attractive prices. The down side here is that medium and average prices of detached homes are down between 7 and 9% from last year, the biggest drop yet.
Row and townhouses continue to take a hit. While sales are up 20% and new listings are down 27%, the medium price has dropped by 8% and the average price has dropped nearly 20%! While semi-detached has shown a great improvement over last year, it was these that suffered the worst coming into this year, especially the new ones in the inner city that were priced high because of the cost of land. While builders continue to take a hit, the average price has increased because buyers are moving from the older, worn listings to the newer ones to take advantage of the competitive prices.
Even apartment/condo sales are up by nearly 29% though new listings and active listings continue to rise. But for the first time in a long time, the medium and average price of these units has risen between 1.5 and 5.4% respectively. DOM continues to rise as the rise of active listings and buyers selectivity keeps the units on the market longer.
If something could be extrapolated from this it's two things: low interest rates will continue to drive the market; and consumer confidence has returned - we have signs of a balanced market though I would proceed with cautious optimism moving forward. After brisk sales in late summer and early fall, will the stampede to buy continue? Only time will tell.
While the expression "THE SKY IS FALLING" has been thrown around for many months now, especially with regards to the Calgary Real Estate Market, the data continues to provide ample contradictions!
September sales were the strongest total since 2014. New listings were up from last month but strong sales continue and the ratio of sales to new listings still hover around 60%, a ratio indicative of a healthy balanced market. Low lending rates are driving sales but also consumer confidence indicates that the worst is over and the market has bottomed out. All markets are improving except for the row house which, while not decreasing in price as much as in the past, still has not found its legs during the recovery period these past few months. At 7% down from last year, row/town houses continue to take it on the chin. Condos are faring better, but with the huge percentage decrease over the years, it will take quite a bit before they see prices like in 2014, if ever. However, with no negligible decrease in value, I'm confident that market can not get any worse.
Recovering slightly but still showing a 1.8% drop in prices is the attached/semi-detached home, old and new. This market has seen improvement simply because of the lack of new builds (builders losing any sort of profit margin has led to a drop in permits). Prices here have generally bottomed out and begun a slow tred upward in the 400-550K range. There is still difficulty in the plus 600K range for new builds in the inner city where the price of building and lots has not caught up to what buyers are willing to pay. As supply diminishes, in this sector, prices will level off and begin a slow upward trend.
Single family detached continue to do very well, again in the sub 600K range and especially in the 400 to 500K range. Overall, this market actually saw an increase in the average price of 1%. Multiple offers and quick sales are very common in almost all locations in Calgary. However, the ones that are selling are the well-priced and spotless, somewhat or majorly renovated houses that immediately catch the eye. For a significant time now how the house shows provides an ample boost over lot value. Gone are the times when in the inner city you get a house for >lot-value< and the house relatively comes for free. Advise for sellers -- PAINT, RENOVATE (WISELY), CLEAN and present your home in the best possible light, and last, but not least, accept we are at the bottom of the market and price accordingly.
If you are a buyer in the 400 to 550K single family detached range, there is competition out there with these historically low interest rates and finding the home you like may mean putting a reasonable offer in quickly. You may have more opportunity to wait on single family and semi-detached in the 600 to 900K range, but you also will not have the greatest selection. Those house are not selling well and often at a financial loss to the owners, and as such, are not being put onto the market in great numbers.
The overall market has been steady price wise, with sales up 25% Year over year, new listings steady year over year, and inventory dropping a significant 12%.
While it is becoming increasingly clear the effects of the Covid-19 pandemic and rupture in the economy has had some effect on Calgary's (or Canada's) housing market, but not as much as first feared, there are mixed signals about future trends. On a personal note, I have been involved in several multiple offer situations in the past weeks, and shocked by some surprising quick sales as well. Well priced houses (especially in the detached sector) seem to sell quickly and close to asking price. Sales have been steadily well over the 50% ratio of sales to new listings, improving greatly over the past few years, but not at the 65% seen in July when changes were coming to mortgage lending. Interest rates are as good as they will ever be and that is certainly helping sales and modest growth in prices in the detached and row house sector.
The stats indicate a slight downward trend continues for condos though continuing to modify somewhat, and a recovering trend specifically in the detached market. Similar improvements are seen in month-to-month stats for semi-detached and row houses though this abrupt turnaround is not reflective in the negative stats in the year-to-date category. In other words, while Attached homes inventory is dropping, prices that have been dropping show signs of improving this month.
Sales have been steady in all categories over the past few months as the normally busy spring market started late (because of the lock down) and got pushed right into summer.
Compared to last year (which historically saw poor performance), things are looking better. Detached YTD (Year to date) saw 12% fewer sales but 15% newer listings, leading to a drop in supply of 17%. Month of Supply is down by 5.6% as is DOM (days on market). Prices have remained steady compared to last year. August 2020 compared to August 2019 saw even more of an improvement. Supply was down by 15% and months of supply by nearly 20%. Most importantly Average Price was up by 3.3%!
Semi-detached had been struggling lately. Total sales both YTD and during August 2019 was down about 12%. New listings are really dropping as builders have stopped building because of low earnings - down 26% from last August and 18% YTD. DOM is thankfully improving at 7% less than last August. The big discrepancy is in prices. August this year is up both in Medium Price and Average price between 7 and 9% from last August. But the YTD tells a different tale as both prices fell by over 5% over the year, meaning earlier sales were brutal this year.
Condos are continuing to suffer. Total sales down between 18 and 20% YTD and with monthly comparisons. Listings are dropping thankfully by 26% from last August and 18% YTD. DOM is also down from last August by 10% and 7% YTD. They are selling faster, but at a 3.5 to 7% drop in price compared to already brutal 2019 figures.
Row houses have leveled off with slight price drops of 3.5%, less inventory but actually INCREASES of sales by 7.5%.
There are still many challenges ahead. While it seems investor/buyer confidence in the market has improved, Calgary still has unemployment issues and no one knows just how much government subsidies have been propping the housing industry. It can be said that Calgary is still the affordable alternative to other major centers (which also have employment issues and much higher prices), the general trend still continues to show very slight upward movement.
If you're searching for detached houses over 600K, you can afford to take your time. But nice properties in the 400-600K range continue to sell quickly. What is clear is the drop in new builds, particularly in the attached sector, that may eventually lead to a shortage of supply in the future. That may ultimately lead to a turnaround in prices in the semi-detached sector.
As always, a lot rests on the economy and how quickly things get back to "normal".
June was indeed an unexpected month in Calgary's housing market, driven perhaps by the oncoming changes in borrowing that could impact buyers with borderline credit ratings and the price of houses that they could afford. With changes to down payment rules that now have to be entirely in cash, not in credit, and a bit tighter formula of income to payment ratios, we may see a significant slowdown in sales moving forward.
As the pandemic situation winds down, what will the "new normal" be? We're in unchartered waters here but some positive signs give us reason for optimism - but the recovery, inevitable, will take time. Oil is up, rig count is way down in the US, OPEQ is cutting production and people are driving again. CREB (Calgary Real Estate Board) is giving the go ahead for social distancing measures to be followed but open houses in vacant properties are now a go, with guarded open houses in the next two weeks extended to non-vacant homes.
The market sales continue to be slow but there is definite improvement over April. Here's a summation of what happened in May (and maybe an explanation of why).
MAY WHOLE MARKET STATS:
TOTAL SALES: (TS) down 43% over last year in May (remember spring market usually peaks in May but this year is very delayed!). NEW LISTINGS (NL) - down 29% from last May which brings the overall decline in ACTIVE LISTINGS (AL) down by 22%. This is significant because while there were 7500 listings this time last year, there are only 5800 this year which is somewhat normal historically for this time period! MEDIUM PRICE (MP) is down 4.6% and AVERAGE PRICE (AP) is down more than 7% from May of last year. Again, most purchases are in the lower 300K to 400K market area. PENDING SALES (PS) is also down from the end of last May by 7.4%, again because of the delay in what would normally be a spring market. A positive sign is that DAYS ON MARKET (DOM) is also down by 7%, meaning houses are selling quicker than last year. Sales of total market is slowly climbing each day in the past few weeks, now over 60/day on a regular basis, or consistently above 30% of new listings which shows signs remarkably of a what to expect in a balanced market (though we are definitely still in a buyers market - reasons for this at conclusion of newsletter).
MAY DETACHED HOUSE STATS:
TS down 43% (on par with whole market) and NL down 32%. People are simply delaying their listings, though there are still significantly more than a 100 listings (total market) put on MLS each day, and significantly more in the past weeks. But sales are gradually improving in June. Medium price is down 4%, average price is down 7.4%. pending down a whopping 31% and with Attached, because of the higher prices normally, there is an INCREASE of DOM by 8%.
TS down 35%, NL down 21.6%, MP down 4.7, AP down 10%, PS down 11%, DOM up 16.4 percent. What this means is Attached seems to be the most affected in the market with average prices dropping more than Detached prices and DOM increasing as well. People are more cautious about buying attached as they look at potential risks of the appreciation factor long-term. However, of significance here is the fact that most of these price drops are seen in older units with little or no upgrades.
TS down a HUGE 56.5%, NEW LISTINGS also down 28%, ACTIVE down 16%, MEDIUM PRICE AND AVERAGE in the 12% drop, which again is of concern because of previous drops over the past few years. It's a half and half story, newer builds selling lower, but the older condos are bleeding. PS are down 25%, and DOM surprisingly down 5.7%. Investors are simply taking advantage of a crippled condo market with so many low priced listings and deals, they are selling faster.
YEAR TO DATE: (YTD)
TS are down 25%, lower than May's statistics, possibly because of pre-pandemic sales and a current rush of sales over the past few weeks, NL down around 20% so still lower than all active listings to date last year when we first started seeing declines in new listings, Med price down 4%, Aver price down 6.7% and pending sales down 1.7%.
What does it all mean? Obviously still a buyers market. But listing prices are scattered from double digit percentages down from 2014 levels, some even down from 2008 levels, but there are confident listings too, mainly in "go to" neighbourhoods in upgraded houses where listing prices are very high. Some sell, and some stay on the market forever, selling eventually for 10-12% lower than original asking price. House flips in select neighbourhoods are still happening but sellers are not making much profit. New builds are significantly down as well.
All in all, there are bargains. If you are a buyer, you can steal a house if you're willing to get into older houses with no upgrades on busy streets, etc. If you want a really nice house in a really nice neighbourhood, there are deals, but there are still buyers and competition for these houses so low-offers don't work.
If you are a seller and have to sell, list competitively and expect a fight. If you are a buyer, do the work and stay vigilant as there is a growing turnover in the market.
Of course the Covid-19 is adversely affecting the market and with that, the tank in oil prices leaves a lot of uncertainty in the future for Alberta. News today showed that China's economy is already on the rebound and that gives hope that things may turn here sooner than later.
Total sales in Calgary last year in April were 1544, this year 572 or a drop of 63%. May so far is looking even worse at -76.32%. New listings continued to drop in April by 54% and so far 62% in May. Active listings in April are down 21.4% from last April; down 22.3% so far in May. Not surprisingly, people are refraining from listing or pulling unsold homes from the market. Average Price in April was down 8.25% and pending sales were down 60%. Days on Market (DOM) increased slightly in April by 2%, but were up 24% so far in May, insinuating the sales occurring in the past few days sees buyers scooping up long standing listings.
Annual YearToDate (YTD) stats show -21% in total sales, -22% in new listings, average price of all homes dropping 2.8%, Med. Price no change, Pending Sales down 29%, and DOM down 5% from last year. As unnerving as these stats are, the fact that 2019 was not a great year makes it even more concerning. But to put it all in perspective, this is all about Covid-19 and the impact it's having on housing markets across Canada and around the world.
Breaking things in Detached, Attached and Condo/Townhouses, here are the Stats:
Detached - TS (TOTALS SALES) versus one year ago:
April down 63%, May down 72%; NL (NEW LISTINGS) Apr down 56%, May down 65%; Medium and Average price -3 to --8%, more slightly cheaper homes being bought with a higher drop in the average price. Pending sales down 78% in April and fortunately a huge drop in DOM of 40%.
Attached - TOTAL SALES - Apr down 63%, May down almost 83%! NEW LISTINGS - down 50% in April; Active listings down 21%; Med Price down 2.5%; Ave Price down 6.5%. Pending sales down 70% and DOM up 5%.
Condo/Townhouse - TOTALS SALES down 62%; NEW LISTINGS down 54%; Active down 13%, Med. Price down ONLY .87 or less than 1%. Ave Price down 7%, Pending Sales down 27% and DOM DOWN 6%.
Benchmark price, the TRUE INDICATOR of what home prices are doing are down only 1% for detached homes, and down slightly more than 2% for attached and Condo/Townhouses. With DOM also decreasing on Average in April, it does mean what is on the market is selling fasting. While, in general, listings coming onto the market are competitive in price, they are not being listed at bargain prices. It means what is selling is usually after a drop in price or at a much lower percentage of asking price than is normal (historically about 2-4% below asking). On higher end homes, in the 800 to million price range, sale prices have been 50k to 80k below original list price or drops of nearly 10%, while many in the million have seen sales 200K plus below original asking.
The challenges for sellers is obvious at this time. But there are challenges for buyers as well, with restrictive rules on showings, no open houses, and generally less listings on the market.
Most experienced Realtors agree that while the Spring Market is a write-off, if the Covid situation gets under control soon, we will have a surge of activity towards the late summer and into the fall. How much prices fall between now and then depends on the economic fallout and the necessity of sellers to sell.
For now, it's a hunker down situation and what happens could be anyone's guess. I'm taking it slow now myself and adhering to social distancing rules as much as possible. My sincerest hopes that all will make it through these trying times relatively unscathed. If you need further explanation as to the interpretation of market movement, please feel free to contact me. If you know anyone that is keen to sell (or even buy), we'd be happy to advise them. Thanks for your attention.
City of Calgary, April 1, 2020 –
After a strong start to 2020, economic conditions have dramatically changed, as COVID-19 is impacting all aspects of society.
The economic impact is starting to be felt across many industries. This includes the housing market.
March sales activity started the month strong, but quickly changed, as concerns regarding the spread of COVID-19 brought about social distancing measures. This had a heavy impact on businesses and employment.
“This is an unprecedented time with a significant amount of uncertainty coming from both the wide impact of the pandemic and dramatic shift in the energy sector. It is not a surprise to see these concerns also weigh on the housing market,” said CREB® chief economist Ann-Marie Lurie.
By the end of March, sales activity had fallen 11 per cent compared to last year. This is 37 per cent lower than long-term averages. The drop in sales pushed March levels to the lowest recorded since 1995.
“The impact on the housing market will likely persist over the next several quarters,” said Lurie. “However, measures put in place by the government to help support homeowners through this time of job and income loss will help prevent more significant impacts in the housing market.”
New listings dropped by 19 per cent this month. This decline in new listings compared to sales caused supply levels to ease and helped prevent a larger increase in oversupply. Overall, the months of supply remain just below five months, similar to levels recorded last year.
Prices were already forecasted to ease this year due to oversupply in our market. In March, the citywide benchmark price was $417,400. This is nearly one per cent lower than last year’s levels. The reduction in both sales and new listings should help prevent significant price declines in our market.
However, price declines will likely be higher than originally expected due to the combined impact of the pandemic and energy sector crisis.
HOUSING MARKET FACTS
REGIONAL MARKET FACTS
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As February's sunshine throws a renewed warmth on the city, there is also clarity of a burgeoning "New Normal" in Calgary's housing market. It's been clear that the market has been at the bottom for many months, but January is bringing signs there is a "very slow" crawl to recovery - key word - "crawl". If things are improving, they will do so in a very slow steady fashion. It's unlikely there will be any kind of "boom" in the near future as the best the next year has in store is likely a balanced market.
The stats so far this year are showing a major improvement over last year but in the context of historical values, they still indicate a slight edge to the buyer. However, a lot of very slow activity last year also indicates pent up purchase indicators. I'll explain through the stats.
January this year saw 7.74% sales improvement over last January while new listings were actually down -8.3%. Active listings are down to about 5000, again dropping by -8% from last year, but still slightly over January historic averages.
Medium prices are up by 2.5% over last January while days on market (DOM) is also up by 5%, again indicating buyers are taking their time. Year to date (YTD) indicators show a strong trend upward as pending sales are up a whopping 40%.
In the detached homes sector, sales are up 6.38%, new listings are down -10.75% and total active listings are down significantly by -15.23%. Both the medium and average sales price has actually recovered by around 4%, indicating that buyers are going for the more expensive houses, possibly because prices are so attractive right now.
Attached sales are also up by 4%, new listings down a whopping -17.45%, and active listings also down -10.45% from this time last year. Medium prices are up just over 3% while average prices have dropped a bit at -1.67%. More sales and more interest in higher priced attached homes; but prices are still down by a bit.
The condo/townhouse market is another kettle of fish altogether. It is a bad/good news story for sellers. Sales are up significantly at 18.55% but new listings are also up at 10.5% and active listings are also up 12.3%. These new and active figures in this sector were already very high last year and they are still increasing. It all leads to explain why medium prices have dropped -6.23%, the average price a whopping -12.74% drop. However, the bright side is the higher sales and the amazing PENDING SALES which has sky-rocketed to 48% increase over this time last year. It looks like buyers are finally jumping into the condo/townhouse market and taking advantage of the ridiculous prices.
All in all, there is a fairly pronounced distinction between the detached/attached market and the condo/townhouse market, but all seem to be showing signs of improvement. So, to conclude, it looks likely that this Spring's market might be the busiest we've seen in years.
While we just witnessed the turnaround into a new Decade, we might have symbolically seen a turnaround in the real estate market. December sales, especially leading up to the holiday season, were quite strong as compared to last year and years in general. Often, sales to new listings were almost equal, compared to well below 30% values we've seen recently. New listings were down once again. All in all, sales were up 1% from last year though the year thanks to a strong first quarter, spring and December finish. Prices over all still were about 3% below last year. It is estimated that the overall price of properties has dropped by about 10% since the peak of 2014, though much more with condos and townhouses, but balanced with less detached and attached homes price drops.
However, the most significant part of December's statistics are the fact that there is definitive signs of improvement in an otherwise very slow time of the year. It all seems to be pointing to a potentially busy spring. It's likely going to be a buyer's market for at least another year, but the tide is slowly turning.
With the aftermath of an election that did not bode well for Alberta and the repercussions of that, with companies pulling out of Alberta resulting in layoffs, one cannot overstate the profound impact that has had on the Calgary housing market.
Of course the immediacy of the bad news stories overshadow a lot of good news stories. The Enbridge Line 3 opens up and TMX begins construction are among the many news stories putting a positive spin on Alberta's economy moving forward. Some financial analysts put Alberta's economy to lead Canada's norm for the next few years.
However, the psychological weight of the current state of affairs keeps us firmly in a buyer's market, despite signs we're slowly moving to a balanced one. This is reflected in November's stats, which in terms of sales is one of the lowest Novembers in recent history even with the 5 years of stagnant sales overall.
The overall benchmark sale price on all houses averages about 4% lower than last year, making it one of the biggest drops in the detached sector since the recession began. While the number of sales actually were up over last year, they were around 20% lower than historic averages, despite the general growth of Calgary's population and the wealth of product on the market.
As has been the case for the past 5 years, most sales in the detached sector were in the 400 to 500K range, and much lower for townhouses and condos. Despite a lot of those being pulled off the market by sellers, newly built condos are adding to the inventory and oversupply.
In the attached sector, row houses in the East section have taken a huge hit, down 8% in sales compared to 2018, bucking a trend that has generally kept prices in Calgary east resistant to recession. Elsewhere, sales are up 6% over 2018. New listings and inventory average 8% lower than last year but are also higher than historical averages. ays on the Market (DOM) have increased by 10.5% and prices are anywhere from 3 to 4.5% down from last year's averages.
Detached sales are down 4.55% compared to 2018. New listings are down 12.57 dropping detached inventory almost 10% from last year; but still high compared to historical averages. DOM continues to increase by a staggerng 15% and in general sale prices on detached (Average, Benchmark, Medium) range from a drop of 3.5% to 4.5%.
In the condo/townhouse market, sales are down 6.5% due to the pullback of new listings of around 10% from last year's highs. DOM is up 12.5% and prices vary from 2.45 all the way to 6% lower overall from last year. The condo market continues to hurt badly and is subject to other negative external forces besides demand. Major banks are pulling out of financing older buildings with POST TENSION construction and there's even word some insurance companies are not renewing on certain units. If you plan on buying a condo, it is IMPERATIVE you check all factors that might affect the building's future.
While the stats and current layoffs, election result and company pull outs have an impact on the market, buyers should be aware that these stigmas eventually dissipate - in other words - NOW IS A PERFECT TIME TO GET INTO THE MARKET. Interest rates are coming down, some lenders are offering STRESS TEST FREE loans, and Income to mortgage ratios in Alberta beat every other urban sector in Canada. We've hit bottom, we're at bottom and there's no other place to go but up. Something for us to ponder over the holidays (which also historically is one of the best times to buy).
The monthly newsletter does come with a sprinkle of challenges the market is facing post-election. We're all aware of companies laying off, companies leaving town, a minority liberal government and great disenchantment in the province. Sometimes this perfect storm of bad news stories overshadows the good ones. The TMX is going forward with the hiring of 2200 jobs, Warren Buffet's Rattlesnake Ridge wind project is a 1.2 billion NatGas pipeline expansion about to begin, the keystone XL pipeline is moving forward, tech jobs are coming to the city and so the list goes on.
That said, it continues to be a strong buyers market and many opportunities are out there for those willing to go in before the exodus of listings (which has already started) begins to take shape. Sellers, not getting the price they want, are turning back to the rental market or simply taking their product off the market. A 12% drop in listings year over year has now occurred, with about 6400 listings on the market, inching every closer to a normal market. That said, there is a reticence for buyers to commit and days on the market (DOM) continue to increase by nearly 16%.
When we look at monthly sales statistics versus YEAR TO DATE (YTD), there is a great dichotomy. For example, October shows significant price increases in nearly every type of home, averaging about 9% above last year's average, with detached houses showing more than 12% increase. Does this mean home prices are going up? No. It shows that buyers are buying into more expensive homes at near bargain prices than they were last year. YTD prices are actually down right across the board, ranging from about 3 1/2 to 4 1/2%.
If one would make anything of this contradiction is that most recently, a few savvy buyers/investors are charging into the market and scooping up higher priced homes that show potential appreciation value in the future. Nuts and bolts logic pervades: houses are affordable compared to historic markets; there is still a surplus; it's still significantly a buyers market especially moving into the holiday season; and time has shown that buying when confidence is low is much better than when a turn-around is just around the corner.
If I copied and pasted last month's newsletter, the details would not be too far off. We've had a third straight month improvement in sales from last year, though figures are still tame and in favour of buyers. What is definite, not to repeat myself too much, is that the market is in "plateau" mode; a period of time after hitting bottom wherein not much changes and prices stay relatively stable month to month.
Year to year, there is a consistent improvement from 2018. Inventory is 13% lower than this time last year, sitting around 6700. That however, is still above the long term average of 5500-6000. This makes for a slight overabundance of listings which of course leads to downward pressure on prices. Also, significantly, it leads to buyers taking their time in making decisions; as a result DOM (days on the market) remains higher even than last years levels. With Condos, it has increased the least (only 11% from last year), however levels have been high there for years. Detached days on the market has significantly increased by a whopping 17%, matching increases felt by attached housing. Reasons are likely the higher prices which are impacted by a continual trend by buyers to move towards low priced homes.
For detached homes, supply compared to last year is down 6.54% and like last month, there's been a collective 3-5% reduction in Benchmark, Medium and Average prices year over year. To reiterate, this loss reflects higher in the average/medium range because of a lot of first time buyers jumping in a lower prices and investors taking advantage of lower prices.
Attached home listings, despite new ones popping up in the inner city everywhere, are still down year over year at 9.4% with current inventory 6% less than what it was last September. Price wise, detached matches the 3 to 5% reduction that's felt with attached homes. Condo/Apartment listings have taken a huge price drop since 2014 but only slipped around 2-3% since this time last year, thereby taking less of a drop than attached and detached homes. This smaller drop is indicative that the condo scene, while still in rough waters, may have finally bottomed out.
Poor weather might continue to hamper sales in the coming months. Buyers also seem fixated on the upcoming election. We may see some significant shifts in the market in the months to come. October sales will be very unpredictable though, with good weather, might see increased activity.
Conclusively, the market is slow, showing improvement, but still in a somewhat stagnant state and still in favour of buyers.
With summer behind us, a few new trends are affecting the Calgary market which otherwise has maintained a somewhat dormant state.
One of the marked increases is the number of new listings over the spring and summer months which brought total listings from a January low of 5000+ to just over 7000. While this figure is well below last year’s high of 8900, it surpasses what was happening leading into the fall of 2016 and 2017. As a result, days on the market (DOM) now has increased across the board. Less so for condos/which were high already, but more for the 500K+ detached and semi-detached homes. The average is about 60 days, slightly above average, but for houses in the 70 - million+ range it rises incrementally with million+ houses staying on the market for 8 months. The major sales continue to be in the 300-400K range with first time home buyers jumping in and taking advantage of a buyer's market. Another trend that seems to be continuing is the "house flip" trend, buying of cheap houses, renovating and flipping.
Average price year over year has stayed at about -2 to -3%, with little change month to month, summer from spring. The benchmark price has begun to increase as buyers are starting to take advantage of lowered prices on houses on the high end. The sales to listing ratio has decreased from a spring high of about 67% to about 51% now, meaning as more houses are being listed, sales are not keeping up with them. While the summer has been quite slow, August was VERY SLOW. With the upcoming Federal election looming, it seems a lot of buyers continue to sit on the fence until the results are known.
Looking forward is very difficult. There might be a slight fall surge after such a slow summer. Positive news on the jobs front have helped with some new industries both in and outside of the oil patch getting a kick start. Employment numbers are slowly increasing in Calgary and the imminent return to work on TransMountain should help.
Sellers continue to hold onto their prices. Though decreases are seen every day, listing prices seem to be on the high side, edging close to where they were in early 2013. We've been bottomed out for months, we're not crawling out yet, but there is a sense of moving forward. Next month will tell more clearly.
Sales activity increase led by lower-priced homes
City of Calgary, September 3, 2019 – Increased sales and easing new listings reduced housing inventories in August. Sales were primarily driven by homes priced below $500,000.
“Employment numbers have been improving, but mostly in industries that are traditionally lower paid,” said CREB® chief economist Ann-Marie Lurie. “This is contributing to the shift that we are seeing in the housing market, with growth being limited to product priced below $500,000.”
Rising sales for homes priced under $500,000 offset sales declines in the higher price ranges. This caused August sales to improve by six per cent compared to last year.
Sales activity improved for all product types. The growth was largest for apartment-style and attached properties.
Attached sales increased for the sixth consecutive month compared to the previous year. This is also the only property type with year-to-date sales higher than last year’s levels.
New listings continued to ease this month, which caused inventory to decline. This is helping the market shift toward more balanced conditions.
The amount of downward pressure on prices is also easing. At $426,000, the unadjusted citywide benchmark price this month remained comparable to last month, but 2.6 per cent lower than last year’s levels.
Despite improving sales and reductions in inventory, housing market recovery will take time. Inventory levels remain elevated and sales activity is still well below historical norms. The market continues to favour the buyer, with over four months of supply.
HOUSING MARKET FACTS
REGIONAL MARKET FACTS
With the highly publicised price drops in housing in recent weeks, Calgary seems to be quickly heading to a balanced market as purchases (both investors and mostly first time home buyers) seem to be getting off the fence. For the past few weeks, there have been a healthy ratio of sales to new listings, coming in around the 60-70% mark.
Price drops across the board have levelled off and in the case of apartments, improved. Starting with detached homes, sales have dropped off slightly by 2%, but new listings are down a whopping 13%. Days on the market (DOM) has increased by 23%, mostly due to buyers knowing they can take their time to make decisions. Price drops of 5% year over year are carried forward, but definitely levelled off. Most detached homes in good areas have lost no more than a total of 8-10% since the peaks of 2014. So the bulk of the decrease happened in the last year. Again, much of this is due to the stress test forcing buyers to buy lower priced houses. That and a combination of first time buyers getting into the market with starter homes have lowered the medium price of houses sold.
Condos and townhouses are definitely fairing better. While sales are still down 14.5%, inventory has dropped a significant 12%. While we were seeing price drops nearing the double digits in recent years, it has now levelled off to detached rates of 5-7%. Some of this could also be attributed to new builds coming on the market at highly competitive rates.
Attached homes seem to be doing even better with sales UP 4% and new listings DOWN 10%. On my drive abouts, it seems there is plenty of inventory but the statistics do not support it. DOM for detached has increased though by 8.5% and prices year over year are down about 4 to 5%.
The CALGARY REAL ESTATE BOARD is predicting 2020 to be a recovery year based on the direction of the market. Again, depending on outside forces (Federal Election), the market can swing to a balanced market even sooner than that. Most of the 5% price drops happened between last summer and this winter and has throughout the spring basically stopped. So all indications are the market has already levelled off. And with the reduction of inventory and new builders building, it is likely we will see steady prices until next spring.