Calgary Real Estate Report June 2019
Summer is within reach and the Spring market has picked up (particularly after the provincial election) but not nearly as much as historical normals. Yet sales are consistent going forward, indicating that summer might not be as dormant as usual.
Better employment numbers might be driving sales and a slight improvement in buyer confidence moving forward. There is still a lot of catching up to do and the numbers still indicate a solid buyer’s market.
There is general consensus amongst the industry, and from the general buying public that we have hit bottom sometime during the early part of spring. I have been watching listing prices recently which remain somewhere between the 2008 peak and 2014 peak in most communities, which indicates that sellers have either refused to drop prices further, or that they are confident they will find buyers. This is indicated by the number of days on the market, which has diminished recently for the lower priced homes, particularly in single family detached. That said, undesirable houses, in undesirable locations, still sit stagnant on the market.
Interest rates are on the decline and indications that the BOC will drop rates as well rather than increase them. The most notable piece of the puzzle occurs on June 18, with the TransMountain Pipeline decision. Should the project be approved, it may not immediately affect employment, but will have a profound affect on buyer psychology. Motivated buyers waiting until after this decision can be affected both positively or negatively depending on the news. We may actually see a return to multiple offers on good investments in the case of positive news, or the reverse if the pipeline is delayed further.
Sales growth in May was met with a decline in new listings. Inventory was 7,467 units, a decline of 12 per cent compared to last year. While still oversupplied, this is an improvement from the five months of supply recorded last May. Citywide sales in May totalled 1,921 units, 11 per cent higher than last year’s levels. However, sales remain 10 per cent below longer-term trends. As has been the case for years, this sales growth was primarily driven by homes prices under $500,000.
The condo townhouse market remains oversupplied yet surprisingly is over 8% LESS than last year, likely due to a recent termination of listings more than actual sales. Semi-detached homes on the other hand, took a year over year hit of 4 - 6% in medium price decrease, with an increase of 18% of inventory leading to an increase of 21% of days on the market. The oversupply was led mostly by newly built Duplexes.
There is positive news for detached houses which saw a 12% decrease in listings, but sales there are still 10% below historical averages. What is notable, is the price decreases stopped as of last few months, which just a fraction of percentage registering with most sales. Year over year, prices remain anywhere from less than a percent (N.E) in losses, versus the hardest hit City Center (-6.5%) and the deep South (-5.25%).