Calgary Real Estate Under COVID-19
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.