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.
But the good news is that June was very brisk, with sales approaching and often surpassing a 100 units a day and the ratio of sales to new listings often well above 50% which would otherwise indicate a seller's market. Of course, that all changed on July 1st with the new rules and sales immediately dropped to lower than a third of new listings.
It did indeed seem like June was a turnaround month while we are still in pandemic recovery mode and there is every indication that consumer confidence is growing from the lows of months, and years gone by. In many instances well priced homes were sold within the first week or two of listing and there were instances of multiple offers.
The overall housing market showed little change from last June with all statistics virtually the same in all categories except a 6% increase in New Listings and a substantial drop of 18% in active listings. While the average price stayed the same, Medium price dropped by 2.4%, continuing the trend of new buyers purchasing entry level homes.
The detached sector was virtually unaffected since last year with a slight increase in New Listings (5.7%) but a huge decrease of 21% in Active Listings, leading to some frustration and actual lack of inventory for buyers in this sector. Inner city lot values have taken a further hit with prices in R-C2 communities dropping slightly simply because builders are not building as much anymore. Long term outcome of this may be a lack of new builds and infills in the forthcoming years.
There was a bit more variance in the Attached market with total sales up nearly 3%, New Lisitngs up 14% but active listings dropping by 13%. While medium price was not affected there was a significant drop of 10% in the Average Price and pending sales are down by 23%. In opposition to that, Days on Market are down 5%. There seems to be a bit of mixed signals in the attached market in that older homes are selling for less and newer homes are rarer so prices have not balanced as a result.
Condos and Townhouses continue their recent trend of levelling off the once precipitous drop they once endured. While total sales continue to drop 13%, active listings are down by 14% wihch actually led to average prices rising by 3%. However, people are still generally flocking to the less expensive units with the medium price showing a 6% drop in price from last year.
Are we in a transition period? What will the longer term effects of the covid pandemic be? The market trend seems to ask the questions more than answering them. In Canada, we will likely see tough times for the higher end homes and markets like Toronto and Vancouver will continue to correct as the affordability factor diminishes.
As for Calgary, there is a bit of optimism brewing. The next month's statistics will give us a clearer picture.