YYC Real Estate newsletter October 2019
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.