Calgary Real Estate Report November 2019
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).