Media release: Sales improving and inventory declines for fourth month in a row

City of Calgary, August 1, 2019 – For the fourth consecutive month, inventories in the market declined compared to last year. This is due to the combination of improving sales and a decline in new listings.

The market continues to favour the buyer, but a continuation in supply reduction compared to sales is needed to support more balanced conditions.

“We are starting to see reductions in supply across the resale, rental and new-home markets,” said CREB® chief economist Ann-Marie Lurie.

“This adjustment in supply to the lower levels of demand will support more balanced conditions. It is starting to support more stability in prices. If this continues, the housing market should be better positioned for recovery as we move into 2020.”

Year-to-date sales activity remains just below last year’s levels and well below longer-term averages. However, the reduction in inventory has caused the months of supply in July to ease to 4.5 months, a significant improvement from the 5.5 months recorded last year. 

With less oversupply in the market, prices are showing some signs of stability on a monthly basis. This is causing the rate of price decline to ease on a year-over-year basis. Overall, year-to-date benchmark prices remain over four per cent below last year’s levels.

HOUSING MARKET FACTS

Detached

  • Sales activity in July was slightly higher than last year’s levels, but it was not enough to offset earlier declines, as year-to-date sales remain just below last year’s levels. Despite overall declines, trends vary significantly by price range. Year-to-date sales for product priced below $500,000 have improved by 11 per cent compared to last year, while sales over $500,000 have declined by nearly 16 per cent.
  • New listings continue to ease for detached product, reducing inventory across most price ranges. This is also starting to result in year-over-year declines in the months of supply for all prices ranges except homes over $1 million.
  • Adjustments in sales and inventories also vary significantly by district. Year-to-date sales have declined across all districts except the North West and South districts. Easing inventories have not occurred across all districts, with year-over-year July inventory gains occurring in both the City Centre and West districts.
  • Buyers’ market conditions persist, with detached benchmark prices at $488,400 in July. This is over three per cent lower than last year’s levels. Price declines range from a high of 5.7 per cent in the South district to a low of 1.4 per cent in the North East district.

Apartment

  • Despite improvement in July, year-to-date sales for apartment condominiums eased by over four per cent and remain well below longer-term averages.
  • Available rental supply and ample selection in the new-home sector have impacted sales in the resale market. However, inventories continue to adjust, reducing the oversupply in this sector.
  • With conditions favouring the buyer, prices continue to edge down. However, year-to-date benchmark price declines are not occurring across all districts, with modest gains occurring in the North East district. 

Attached

  • The attached sector is the only sector with recorded growth in year-to-date sales, up nearly four per cent. The affordable nature of this product, relative to detached, has likely supported some of these gains.
  • The number of new listings continues to ease. This is causing inventory declines and reductions in oversupply. Like the other sectors, this segment continues to favour the buyer, preventing any significant changes in prices.
  • Both row and semi-detached prices remain over three per cent lower than last year’s levels and well below historical highs. Attached price declines have been the highest in the City Centre district at over five per cent.

REGIONAL MARKET FACTS

Airdrie

  • For the fifth consecutive month, year-over-year sales improved in Airdrie. Year-to-date sales reached 757 units, over three per cent higher than last year. Improving sales combined with declines in new listings have resulted in less inventory in the market compared to last year. This market is moving toward balanced conditions.
  • Oversupply is easing, but July benchmark prices remain over three per cent below last year’s levels. There are steeper price declines occurring in the higher density sectors of the market.

Cochrane

  • Year-to-date residential sales in Cochrane totalled 376 units, slightly lower then last year’s levels. New listings have been in decline, resulting in the fourth consecutive month with a year-over-year decline in inventory.
  • This has caused the amount of oversupply to ease, supporting more stability in pricing. As of July, the benchmark price in Cochrane is $408,300, over four per cent lower than last year’s levels.

Okotoks

  • Total residential sales in Okotoks have totalled 321 units so far in 2019. This is similar to last year, but below long-term trends. New listings continue to trend down, supporting inventory declines and easing in the months of supply.
  • As the amount of oversupply in the market eases, prices have been showing signs of improvement compared to the previous month. However, year-to-date benchmark prices remain over four per cent lower than last year’s levels.

Oversupply is slowing, but a buyers’ market remains

City of Calgary, July 2, 2019 – New listings coming onto the market continued to decline in June, which is helping to reduce the oversupply of homes in Calgary.

Year-over-year, new listings saw a decrease of nearly 19 per cent. Sales activity slowed this month compared to last year by six per cent, but the pullback in new listings was enough to cause inventories to fall by 13 per cent compared to last year’s elevated levels.

“So far, the housing market has generally behaved as expected this year. Sales activity remains just below last year’s levels, prices have eased and supply is starting to adjust to the lower level of sales,” said CREB® chief economist Ann-Marie Lurie.

“However, it is mostly product priced under $500,000 that is trending towards more balanced conditions.”

While the market still favours the buyer – with 4.3 months of supply – the amount of oversupply has eased and is slowing the decline in prices. As of June, the benchmark price in the city was $425,700, nearly four per cent below last year’s levels and comparable to unadjusted prices recorded last month.

HOUSING MARKET FACTS

Detached

  • Detached sales in June declined by nine per cent compared to last year, causing year-to-date sales to ease by nearly three per cent. The decline in sales was mostly driven by homes priced above $500,000.
  • Detached homes priced under $500,000 have recorded improvements in sales and oversupply reductions. The tightening in the lower end of the market will likely start to support price growth in this sector of the market.
  • Despite city wide year-to-date sales declines, activity improved in both the South and North West districts of the city. Sales did ease across other districts, but in some of the most affordable districts (North East and East) supply-to-demand ratios are improving compared to last year. This is pushing those markets toward more balanced conditions.
  • Despite slower sales activity, the amount of inventory declined by nearly 18 per cent. The reduction in inventories occurred throughout all districts.
  • Prices have remained relatively stable over the past few months, with some modest monthly improvements. However, the oversupply scenario has left prices nearly four per cent below last year’s levels.

Apartment

  • Apartment condominium sales eased in June, causing year-to-date sales to total 1,292 units. This is over seven per cent below last year’s levels. Over the same time frame, new listings eased by over 15 per cent, helping reduce some of the resale inventory in the market.
  • Resale inventory levels have declined, but the months of supply continue to remain elevated at 6.8 months. Combined with elevated inventories in the competing rental and new-home markets, this continues to weigh on resale pricing.
  • June’s benchmark price was $250,200, three per cent below last year’s levels. This is resulting in a total price adjustment of over 17 per cent since 2014.

Attached

  • Unlike other property types, sales activity for attached product continued to improve in June. Year-to-date sales total 1,955 units, nearly three per cent above last year’s levels. Improvements were driven mostly by growth in demand for semi-detached product. Attached sales improved across all districts except the North West and West.
  • New listings have eased compared to last year, which is starting to reduce oversupply in the market. Like all other sectors, the attached market remains oversupplied and this is impacting prices.
  • June’s benchmark prices were $399,700 for semi-detached and $286,300 for row product. Respectively, this represents year-over-year declines of 3.3 and 5.4 per cent.

REGIONAL MARKET FACTS

Airdrie

  • After the first half of the year, sales activity remained relatively stable. New listings have declined, which is helping to reduce the amount of inventory on the market and move towards more balanced conditions.
  • The market may be trending towards more balanced conditions, but oversupply continues to weigh on prices. The benchmark price was $334,800 in June, comparable to last month, but nearly three per cent below last year’s levels.

Cochrane

  • Sales activity in the area remained relatively stable compared to last year and consistent with longer-term trends. New listings have eased, helping to reduce inventory in the market and the amount of oversupply.
  • Despite some recent adjustments, the market continues to favour the buyer, placing downward pressure on prices. The benchmark price was $404,000 in June, similar to last month and over five per cent below last year’s levels.

Okotoks

  • Sales have remained stable compared to last year, but they are still below longer-term averages. However, new listings are starting to adjust, which is continuing to push down inventory levels and cause the market to move towards more balanced conditions.
  • As the market moves towards more balanced conditions, this should help create more stability in pricing. As of June, benchmark prices were $414,900, 1.6 per cent higher than last month, but still 4.1 per cent below last year’s levels.