Prices remain stable compared to last year
City of Calgary, April 2, 2018 –
As expected, slow sales this quarter have persisted through March in the City of Calgary. This is not a surprise, after stronger growth in sales at the end of last year following the announced changes to the lending market.
First quarter sales totaled 3,423 units, nearly 18 per cent below last year's levels and 24 per cent below long-term averages. Easing sales and modest gains in new listings caused inventories to rise and months of supply to remain above four months.
"Economic conditions are slowly improving, but it has not been enough to outpace the current impact of higher lending rates and more stringent conditions," said CREB® chief economist Ann-Marie Lurie.
"We are entering the most active quarters in the housing market with more inventory, which could create some price fluctuations. However, the improving economy is expected to prevent overall prices from slipping by significant amounts."
While prices trended down on a quarterly basis, they remained relatively unchanged over last year's levels due to modest gains in the detached sector offsetting declines in the apartment sector.
The citywide benchmark price for detached product averaged $502,000 in the first quarter. This is slightly lower than the fourth quarter of last year, but comparable to levels recorded in the first quarter of last year. In March, the detached price reached $503,800, 3.6 per cent below pre-recession highs, but one per cent above the lows recorded during the recession.
"The market today is better than what we experienced at the peak of the recession," said CREB® president Tom Westcott.
"You can find good value if you're looking to buy a home, and you can also get good value if you're selling. Being well-informed, in any economic condition, is the key, because there are differences in the market depending on what type of property it is and where it is located."
Detached market inventories in the first quarter of 2017 were low compared to historical standards. This year, detached inventories have averaged 2,573 units over the first quarter, 10 per cent below first quarter averages recorded during 2015 and 2016.
Spring will have more inventory than last year, slowing progress on price recovery. However, the amount of price adjustment will vary depending on competing supply by location and product type.
Information provided by CREB
Calgary housing market prices hold, but sales fall
Calgary, March 1, 2018 –
Residential home sales declined in February, but a decline in new listings helped keep prices steady this month.
Sales totaled 1.094 units in February, 18 per cent below last year's activity. Easing sales occurred across all property types this month, which outpaced the sales growth that occurred in January. After the first two months of the year, sales activity remains well below longer-term averages.
"Housing market conditions are still adjusting to rising lending rates and changes in lending requirements. This process is expected to be bumpy, with demand adjustments leading the changes," said CREB® chief economist Ann-Marie Lurie.
"However, it is important to remember that it is early in the process and the impact on prices will ultimately be dependent on the supply response."
A decline in new listings was not enough to prevent further gains in inventory levels, but it offset some of the impact of slower sales activity. In the detached sector, one of the largest declines in sales occurred in the $600,000 - $999,999 range, while this price range also recorded gains in new listings.
"This is a market where the fundamentals of a sound pricing strategy need to be understood by sellers. At the same time, savvy buyers typically have a clear understanding of how much of a mortgage they can get," said CREB® president Tom Westcott.
"With all the recent changes, potential purchasers should be obtaining pre-approvals so they understand exactly what they can afford prior to making an offer on a home. It also provides them flexibility in this market."
Citywide benchmark prices totaled $434,300 in February, which is just above levels recovered last month, but comparable to levels recorded last year. While year-over-year price growth remained relatively stable in both the detached and attached markets, apartment prices remained three per cent below last year's levels.
Info provided by CREB
While Calgary is officially out of a long period of economic downturn, the path to recovery is expected to be bumpy.
The impact of stricter lending criteria and higher interest rates is likely to offset the modest improvements in the economy.
"Housing market conditions are expected to remain relatively unchanged in 2018," said CREB® chief economist Ann-Marie Lurie.
"The market will continue adjusting to the 'new normal' in this economy. However, there was modest job growth and net migration last year, with expectations of further improvements into 2018."
Minimal changes in sales activity are expected to be met with easing new listings for some property types. This should support more balanced conditions and prevent widespread benchmark price declines.
"In this market, knowledge is power. A REALTOR® will help buyers and sellers understand what options they have, and negotiate the best price for their property," said 2018 CREB® president, Tom Westcott.
"For buyers, there are a lot of supply choices in all prices across most product types. Sellers need to understand what niche their home falls within, their competition and how fast they have to sell."
More balanced market conditions will be led by the attached and detached sectors of the market, while the apartment sector will continue to struggle with excess inventory in 2018.
Prices will likely continue to face some downward pressure in the apartment sector, with stabilization not expected until the latter portion of the year.
The attached sector may benefit as demand shifts from the detached sector to the attached sector, with modest price gains of 0.38 per cent. Easing demand in the detached sector is expected to be met with easing listings, supporting overall stability in pricing.
Information provided by CREB
There were 625 more single-family homes sold through Calgary’s resale market in 2017 than the tally from a year earlier.
With 11,831 homes in this segment changing hands last year, activity grew by 5.5 per cent from 2016, says the Calgary Real Estate Board.
This includes 616 single-family homes sold last month, which was the second slowest month of 2017, but outperformed December 2016 by 47 deals.
An area CREB defines as south Calgary paced all ends of the city last month with new owners for 132 homes.
For home styles of all kinds, there were 18,882 transactions through Calgary’s resale market last year, which was up six per cent year over year........Read more
Sales activity for all product types improved in December and pushed monthly sales to long-term averages for the second month in a row.
However, new listings also rose, keeping inventory elevated compared to typical levels for December. With more supply remaining compared to sales, benchmark prices edged down for the fifth consecutive month.
"Many of the economic indicators continue to post modest improvements, including improving sales. However, demand gains have not outpaced the additional supply coming into the housing market.
This is creating some of the bumpiness in terms of price recovery," said CREB® chief economist Ann-Marie Lurie, who added that prices have stayed comparable to last year.
The gap between detached supply and demand closed in the first half of 2017 and supported early price growth. As prices improved, this was perceived as a signal for many who delayed selling their home, and caused a late rise in inventory that limited price growth.
Overall, the detached benchmark price in 2017 averaged $504,867, 0.63 per cent above last year's levels.
Challenges continue to face the apartment sector, with elevated supply in the resale market. The new home and rental markets weighed on this sector. The excess supply caused average annual benchmark prices to decline by four per cent this year. This is a total annual adjustment of nearly 12 per cent since the start of the recession.
In the attached sector, the first half of the year saw an improvement in sales relative to inventory levels. This supported stronger price gains in the second and third quarter. However, a late rise in inventory levels took some of the momentum away from price growth. On an annual basis, attached prices totaled $332,325, comparable to last year's levels.
"This year, we saw a rise in the number of consumers willing to purchase in the market with the expectation that the economy had already shifted. There were also many who waited to list their property until prices showed more stability," said CREB® president David P. Brown.
"Those who acted were typically driven by long-term plans that best suit their current lifestyle. We are ending the year with stronger sales in the last quarter, but supply levels are holding back price gains. The year played out as expected with a transition from price declines to general price stability in most sectors of the market."
Info provided by CREB
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