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After the first full month with social distancing measures in place, the housing market is adjusting to the effects of COVID-19.

April sales hit 573 units, a decline of 63 per cent over last year. “The decline in home sales does not come as a surprise. The combined impact of COVID-19 and the situation in the energy sector is causing housing demand to fall,” said CREB® chief economist Ann-Marie Lurie. “Demand is also falling faster than supply. This is keeping the market in buyers’ territory and weighing on prices.” Sales activity eased across all price ranges, but the largest declines were for homes priced above $600,000.


With a greater share of the sales occurring in the lower price ranges, the average price decline was more than eight per cent. Prices for the average home are also declining, reflected by the benchmark price, which fell by nearly two per cent compared to last year.


New listings this month totalled 1,425 units, a decline of 54 per cent compared to last year. Inventories also declined, but with 5,565 units available, they remained high enough to push the months of supply above nine months.

The economic impact of the situation is significant and early indications point toward more job losses and higher unemployment rates. Several government incentives will help cushion the blow, but challenges in the housing market are expected to persist throughout this year.


HOUSING MARKET FACTS

Detached

  • Detached sales eased by 63 per cent this month compared to last year, with the largest decline in the West district.
  • Slower demand was also met with easing supply, as new listings declined by 57 per cent. Overall, inventories eased by 25 per cent compared to last year. Despite the decline in inventory, the months of supply rose to more than eight months.
  • The detached benchmark price eased by one per cent over last year, totalling $479,100. Prices managed to remain flat in both the South and South East districts. The highest price decline was in the City Centre, with a drop of more than three per cent.

Apartment

  • Apartment sales slowed to 95 units. This is a 62 per cent decline over last year. New listings also slowed, but it was not enough to support a larger decline in inventory levels, which only eased by 13 per cent compared to last year. With 1,349 units in inventory, the months of supply rose to 14 months.
  • Condominium prices were falling before recent developments in the market and the pace of decline remained relatively unchanged at more than two per cent compared to last year. Since the first energy crisis in 2014, the citywide apartment benchmark price has declined by nearly 19 per cent.
  • Year-over-year prices have eased across almost all districts, but the South East district saw the largest year-over-year decline this month at nearly six per cent.

Attached

  • Semi-detached and row properties recorded a significant drop in sales and new listings, causing inventories to decline by nearly 20 per cent. However, with a combined inventory of 1,441 units compared to just 138 sales, the months of supply rose to over 10 months.
  • Semi-detached prices eased across all districts for a citywide year-over-year decline of nearly three per cent. The City Centre recorded the largest year-over-year decline at four per cent.
  • Row priced declined in all areas except the East district. Citywide row prices declined by more than two per cent for a total of $278,300.

REGIONAL MARKET FACTS

Airdrie

  • Sales in Airdrie slowed to 60 units in April. This decline in sales was met with a similar decline in new listings, which totalled 107 units. This helped reduce inventory levels, but with 407 units still in inventory, the months of supply rose to nearly seven months.
  • Overall, the benchmark price remains comparable to last year. Average prices have declined, but some of this is due to more homes being sold in lower price ranges, as there was a significant decline in sales for homes priced above $500,000.

Cochrane

  • April sales in Cochrane dropped to 29 units. This is 55 per cent below levels recorded in the previous year. However, new listings also eased. With only 61 new listings in the market, inventories declined to 281 units.
  • Prices were easing before social distancing measures were put in place and April’s benchmark price totalled $398,900. This is nearly two per cent lower than last year. However, both the median and average price rose compared to last year. This is likely due to more homes being sold in higher price ranges, as there were no sales recorded in the lowest price range.

Okotoks

  • Both sales and new listings dropped, with totals of 17 and 44 units, respectively. Inventory remained well below last year’s levels, but weaker demand pushed up the months of supply to nearly 12 months.
  • Prices were trending down from the start of the year, but levels have remained relatively stable compared to the previous year. In April, the benchmark price continued to trend down, totalling $402,300.
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While lower Months of Inventory will lead to more balanced markets and stabilized pricing, we have noticed that the properties being sold have had an increased average price of 4% in Alberta to $375,649 from $361,131 in January 2019. Since the current Months of Inventory, and the number of sales in January do not support a market where we would see significant movement in price, it is primarily due to movement in the higher price ranges that is having this effect on pricing. The 6.3% increase in the average price for sales in Edmonton, and a 4.8% increase in the average price for sales in Red Deer had a big part in that jump upwards for the Province.
 
The sales activity in the higher price points is consistent with the showing activity that we have had for CIR's listings.  The month over month showings have continued to rise and we anticipate this to continue into Spring. The showing activity that has had the largest gains, is in the $500,000 to $800,000 price points, the move up markets. We have been anticipating the move up markets to start performing better as the lower price points had picked up activity in 2019.
 
The activity that we are seeing is closer to normal for the ten year averages, but is still a bit lower than average.  It appears that people are adjusting expectations to the "new normal", and confidence is continuing to return to the markets. Since Alberta's economy continues to outperform most of Canada for weekly earnings and opportunity, we are seeing the net migration into the Province continuing to increase. This has resulted in the rental markets continue to tighten, which will end up driving buyers and investors into the markets as well as help our move up markets as the first time buyers enter the market. We are also watching the unemployment rate which was seeing a drop through the Fall months of 2019, but has since started rising again in December and January.  There appears to be a lag of six months in the Real Estate markets to the employment markets, so we will continue to monitor the migration and employment trends.
 
All of this said, we are very happy with the results in January 2020. While the Province had an increase in sales of 4%, CIR Realty experienced an increase in sales of 15.6%!  Our agents continue to focus on educating clients on making good decisions to help them achieve their goals in Real Estate.
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Posted in calgary, calgary communities, calgary real estate, CIR Realty, market update, real estate
January Market Update


The improvement of the Calgary housing market continued in December with further stability capping off a stronger second half of the year.

New figures from the Calgary Real Estate Board show that activity returned to levels close to those seen in the past five years with annual sales up 1%.

“Price declines, lower mortgage rates and some modest improvements in full-time employment helped support some demand growth in the city. Reductions in supply are also contributing to the slow adjustment to more stable conditions in the housing market,” said CREB® chief economist Ann-Marie Lurie.

Annually, the attached homes segment was the star performer with sales up by nearly 7% for a total of 3,780 sales. Apartments just outpaced year-ago levels with 2,672 units sold, while detached sales were broadly in line with those of a year earlier.

Price pressures
Overall prices in 2019 declined by 3% year-over-year, marking a 10% decline since the 2014 slowdown in the energy sector.

“As oversupply in the market continues to ease, we should start to see more stabilization in prices. However, conditions continue to favour the buyer and this is weighing on prices,” added Lurie.

For December, attached sales were up 14% to 220, apartments gained 27.6% to 134 sales, and detached sales increased 1.6% to 504.

December’s unadjusted benchmark prices were $418,500, just slightly lower than November and 1% below last year’s levels.

Detached benchmark prices were $480,100 in December contributing to the 2019 average of $484,808, three per cent below last year’s levels.

December semi-detached prices were $388,200 and row prices were $283,000. Both segments saw annual price declines in excess of three per cent and remain well below previous highs.

 
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