by CREB on May 01, 2015
After the fifth consecutive monthly benchmark price decline in Calgary, the number of new home listings eased to 3,064 units in April, a decrease of 18 per cent over the previous year.
“With fewer buyers making purchase decisions and improved selection for resale, new home and rental property, sellers have been either adjusting their expectations on price or delaying their plans about when to list their home,” said CREB® president Corinne Lyall.
Sales activity in April totaled 1,957 units, 22 per cent below last year’s levels and nearly 15 per cent below April’s long term averages. Despite weak sales levels, the drop in new listings prevented strong gains in overall inventory levels and helped improve absorption rates in the market.
“While conditions continue to favour the buyer, both the months of supply and the sales to new listings ratio, which represent measures of market balance, tightened in April,” said CREB® chief economist Ann-Marie Lurie. “If this trend continues, it should help prevent resale inventories from rising to previous highs and limit some of the downward price pressures we’ve been seeing.”
Benchmark prices for detached homes totaled $510,200 in April, which represents an unadjusted decline of 0.7 per cent from last month and 1.9 per cent higher than April 2014 figures. Meanwhile, apartment product recorded a monthly decline of 0.7 and a year-over year decline of 0.2 per cent
Year-to-date apartment sales activity has declined by 33 per cent, while new listings have risen by nearly eight per cent. Despite the recent shift in new listings, months of supply in this sector remain elevated, causing steeper monthly price declines and a year-over-year price contraction.
“There’s improved selection across all segments of the market, which takes some of the urgency away for buyers as they consider all of their options before making a purchase decision,” said Lyall. “Sellers have more competition and need to be aware of how much product is available in comparable neighborhoods.”
The detached sector continues to be the most balanced out of the three market sectors. For the second month in a row, the sales to new listings ratio and the months of inventory moved to levels that are more consistent with balanced conditions. However, the detached market does vary significantly depending on the price range.
“Higher priced properties in the detached sector saw a noticeable decline in absorption levels city-wide, indicating there is less demand relative to supply levels,” said Lurie. “This does not come as a surprise as many of the job losses in recent months have occurred in the higher paying sectors.”
Meanwhile, areas outside city limits are also impacted by the slower economic conditions. Year-to-date sales activity in the surrounding areas totaled 1,346 units, a 26 per cent decline. Despite positive growth following the first quarter, April benchmark prices totaled $434,800, 0.4 per cent below last month’s figures and 5.8 per cent above April 2014 figures.
“Market impacts on pricing are wide ranging and ultimately depend on the location, property type, specific features and amount of comparable supply available,” said Lyall. Both buyers and sellers need to be aware of the local market conditions and adjust their expectations accordingly.”
by CREB on April 17, 2015
Slower economic activity influenced demand across the region in the first quarter of 2015. However, despite rising inventory levels, housing prices in Calgary’s surrounding areas remained relatively stable.
“A lack of recovery in oil has many concerned about their employment status and these concerns have been impacting consumer confidence in the first quarter,” said CREB® chief economist Ann-Marie Lurie. “However, on aggregate, surrounding area prices have posted some quarterly growth as some of these areas have not recorded the same level of pull-back in sales relative to inventory levels.”
Unadjusted benchmark prices for residential properties in the surrounding areas were nearly one per cent above average levels recorded in the previous quarter and 8.4 per cent above levels recorded in the first quarter of 2014. City of Calgary prices have started to retract, but it is important to note that total residential benchmark prices in Calgary recovered from 2007 highs in 2013. In surrounding areas, prices only surpassed previous highs last year.
Residential sales in surrounding areas totaled 911 units in the first quarter of 2015, a 22.7 percent decline compared to the same time last year. Meanwhile, new listings increased by 11.6 per cent and inventories averaged 1,715 for the quarter, pushing the quarterly average months of inventory to 5.65.
“With improved first quarter supply in both the city of Calgary and the surrounding areas, consumers will definitely have more housing options,” said CREB® president Corinne Lyall. “Each of the surrounding areas has their own unique dynamic, so it’s really important to consider the community and specific segment of the market that you are buying or selling in when making any real estate decisions.”
Sales in Airdrie totaled 302 units in the first quarter of 2015, a 10.1 per cent decline relative to the same time last year. Over the same period, benchmark prices in Airdrie continued to increase in the first quarter. In fact, quarterly detached prices averaged $397,867 in the first quarter, which amounts to a 0.24 per cent increase over the previous quarter and a year-over-year increase of 8.4 per cent.
Cochrane had a similar experience where quarterly detached prices averaged $445,033 in the first quarter, a 2.6 per cent increase over the previous quarter and a year-over-year increase of 12.5 per cent. Meanwhile, first quarter sales totaled 116 units at the end of March, a 35 per cent decline over the same time last year.
“Cochrane’s resale sector often has a different dynamic than some of the other surrounding areas as there is a larger share of new home sales representing total sales activity,” said Lurie. “After the first quarter, new home sales activity represented nearly 20 per cent of total sales in Cochrane, compared to 10 per cent in Airdrie and five per cent in Okotoks.”
In Okotoks, detached benchmark prices averaged $453,567 in the first quarter of this year, a 1.23 per cent increase relative to the fourth quarter of 2014 and 6.98 per cent higher than the first quarter of 2014. During this period, Okotoks sales activity totaled 117 units, a 21.5 per cent decline compared to last year. Relative to Airdrie and Cochrane, detached properties make up the largest share of sales in Okotoks.
10 Year Summary Statistics of Calgary by CREB®
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First quarter activity reflects economic uncertainty
by CREB® on April 1, 2015
Elevated inventory levels and low sales for three consecutive months caused unadjusted benchmark prices to ease by 0.44 per cent in March, relative to the previous month, for a total of $454,300. Based on first quarter statistics, conditions are consistent with buyers’ market conditions.
Typical home prices have declined by 0.59 per cent in the first quarter of 2015, compared to the fourth quarter of 2014. The sales to new listings ratio also dropped to 41 per cent and months of supply averaged 4.03 for the quarter. This is a significant change from one year ago when the market was facing inventory shortages and price gains.
“Based on current sales activity and rising supply levels, the change in pricing does not come as a surprise,” said CREB® chief economist Ann-Marie Lurie. “However, the recent price adjustments have not eroded all the higher than expected price gains recorded last year. While conditions have likely tempered growth in new listings, further near term price adjustments will be dependent on changes to inventory levels.” said Lurie.
Sales activity fell by nearly 30 per cent in March, compared to this time last year, and remains well below 10-year averages. City of Calgary sales totaled 3,843 units at the end of the first quarter.
“In this market, buyers and sellers should be thinking about their short term and long term objectives,” said CREB® president Corinne Lyall. “This is a challenging economic time and people need to know their long game, so they can make the right real estate choices for today and tomorrow.”
While Calgary’s housing market has demonstrated buyer market conditions for the first quarter, the recent pullback in new listings in March has helped ease the growth in inventory levels, resulting in better absorption rates.
The apartment sector has the highest months of inventory in Calgary. This has resulted in higher quarterly price declines in this sector, when compared to the detached and attached sectors. By the end of March, the apartment quarterly benchmark price declined by 1.46 per cent, against the previous quarter. This compares to the 0.4 per cent declines in the detached and attached sector over the same time frame.
“Market influence is always wide-ranging and everyone has different reasons for making a move,” said Lyall. “Consideration must be given to the amount of inventory that’s available for a similar property based on the specific features of that home. The amount of competition for a property is often what influences the price that buyers and sellers will agree on.”
When considering the inventory that is available in the City of Calgary, there are 878 units priced under $300,000, of which 99 per cent are either apartment or attached product. The majority of inventory falls in the range of $300,000 to $600,000, of which 56 per cent of the product is detached. Meanwhile, at the other end of the spectrum, there are 1,933 units in inventory at a price over $600,000, of which more than 72 per cent are detached homes.
“Concerns in the energy sector continue to persist, and employment figures are starting to support those concerns,” said Lurie. “In February, employment figures pointed towards job losses related to the energy sector. While monthly employment gains offset the losses, most of the gains were in the traditionally lower paying industries such as the personal services sector. If this trend continues, it may influence the composition of housing demand,” said Lurie.
February sales activity remains low
by CREB on March 02, 2015
Year-over-year new listings growth eased from 37 per cent last month to nine per cent in February. However, as sales activity remained below long term averages for the month, Calgary inventory levels rose to 5,474 units in February.
“While housing supply levels continue to be higher than we have seen in this market for some time, they remain below February 2008 record highs of nearly 7,000 units,” said CREB® chief economist Ann-Marie Lurie. “If the pace of growth in new listings continues to ease, this could place some downward pressure on the supply growth in the resale market.”
After the first two months of the year, there have been 6,236 new listings come onto the Calgary market. However, the new listings gains have varied depending on price range and segment. Detached homes have continued to see a decline in new listings in the under $400,000 segment, while both the apartment and the attached product have recorded listing growth in the over $300,000 price range.
“It’s really important for consumers to consider what segment of the market they are buying or selling in when they make any real estate decisions,” said CREB® president Corinne Lyall. “The inventory, demand and price movement will vary based on the community, price range and product type.”
City of Calgary sales totaled 1,217 in February, a 34 per cent decline over the previous year’s activity. While sales fell across all product types, the rate of decline was higher in the apartment and attached sectors of the city.
"Everyone has different reasons for making a move and so it’s difficult to predict how buyers will react to this market,” said Lyall. “Buyers who have been waiting for more inventory to come on the market may find what they are looking for today. If they are in a position to make a buying decision, they certainly can take advantage of the lower interest rates.”
Months of inventory remain elevated at 4.5 months due to supply gains relative to slower sales in February. This placed downward pressure on pricing over the past month.
Unadjusted detached benchmark prices totaled 516,000 in February, a year-over-year increase of six per cent, but a 0.5 per cent fall over January figures.
Meanwhile, attached and apartment benchmark prices totaled 354,600 and 296,000 respectively. Both represented a decline over previous month’s levels.
The variation in price is more extreme when considering the average price. In February the average price rose by 0.3 percent relative to January, but fell by 4.2 per cent compared to last year. This does not come as a surprise given how the composition of the sales influences the change. Benchmark prices provided changes over time on similar properties, providing a clearer indication of pricing trends.
“Expectations vary significantly when talking about the impact that lower oil prices will have on the housing market,” said Lurie. “This wide range in forecasts is often related to assumptions about how long the cycle will last and the resulting impact to employment and net migration.”
“These differences in expectations will likely persist until there is some firm data to support assumptions about Calgary’s employment levels,” said Lurie.
Calgary sales in January totaled 880 units, well below typical activity
Low oil prices throughout January, combined with a shifting outlook in the energy sector, caused unease for consumers. As a result, monthly housing sales activity fell to levels not seen in five years.
“Economic conditions this year are expected to be weaker than original estimates provided in December 2014," said CREB® chief economist Ann-Marie Lurie.
“This change is partly connected to continued low energy prices, which impact consumer confidence. A lack of recovery in oil has many concerned about their employment status and this concern is reflected through the weaker sales activity in Calgary’s January resale figures,” said Lurie.
Sales levels were over 35 per cent lower than the 10 year average and declined across all three sectors in the city (Attached, detached and apartment). Meanwhile, new listings increased by 39 per cent city-wide, causing inventory levels to rise.
“There are many reasons for consumers to list their home,” said CREB® president Corinne Lyall. “One reason may be that consumers are concerned about what will happen to Calgary’s economy and their personal exposure to this risk,” said Lyall.
While new listing activity increased in every price range this month, the rise in new listings was primarily due to gains in the higher price ranges. In the detached sector, new listings increase by 32 per cent relative to January 2014, all of which occurred in product priced over $400,000.
Despite the recent supply increase in the market, benchmark prices managed to remain relatively stable this month. January benchmark prices totaled $459,100, a 7.7 per cent increase relative to January 2014, but similar to December figures.
Although residential prices remained relatively stable, there was some variation in sectors. The apartment sector recorded the largest gain in new listings relative to sales and inventory levels nearly doubled reaching 1,148 units. The rise in supply relative to demand placed downward pressure on benchmark prices, which fell to $298,700 compared to $300,400 in December.
“It’s important for sellers to set appropriate expectations in this market,” said Lyall. “They need to consider their property type, the competition they may be facing in their community, their reasons for selling and, of course, when they ultimately need their property to be sold.”
Detached benchmark prices totaled $518,600 in January, similar to December levels, but a 7.9 per cent increase relative to January 2014. Meanwhile, the attached unadjusted benchmark price in January totaled $356,200, similar to prices recorded in December.
“Housing decisions will likely continue to be postponed for many consumers until they can see what happens with the economic climate in the spring,” said Lurie.
“Nonetheless, if supply levels continue to rise at levels that exceed the pace of demand growth, we can expect this will start to impact prices in the city.”
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by CREB on January 13, 2015
Housing sales are forecasted to ease by four per cent this year, due to market uncertainty and changes in economic climate, while prices are expected to remain relatively stable with a modest increase of 1.58 per cent on an annual basis, CREB® said today in its annual forecast.
Although sales levels are expected to ease, previously tight conditions throughout 2014 indicate that rising supply would push the market into more balanced conditions, supporting price stability in 2015. However, CREB® warns there are multiple risk factors attached to this forecast, which estimates a total of 24,503 homes will be sold in the city this year.
“The housing risks lie mainly with employment levels and net migration, both of which can be more severely impacted by a prolonged period of weakness in the energy sector,” said CREB® chief economist Ann-Marie Lurie. “There is also the impact that energy prices have on consumer confidence. If energy prices stay low throughout the year, concern regarding job stability could cause consumers to delay unnecessary changes regarding housing.”
The report notes that while sales activity is expected to ease in 2015, it remains consistent with long-term levels. By comparison, sales in 2014 were nearly 15 per cent higher than the long-term trends for the city.
“The economic situation is far better today than what is was in 2009, where the fallout of the financial crises resulted in a U.S. recession, weakness in energy sectors, a pullback in investment and ultimately job losses in Calgary,” said Lurie. “With economic indicators remaining more positive in this period, the pullback in housing is not expected to mirror activity during the 2009-2010 period.”
CREB®’s forecast also notes that housing activity can vary significantly depending on location, price range and property type. For example, in 2014, there were less detached homes within city limits available in the lower price ranges. This caused many consumers who were looking for lower priced product to move to the attached and apartment sectors within city limits as well as other surrounding areas. Many consumers turned to the larger surrounding areas of Airdrie, Cochrane, Okotkoks and Chestermere, which all recorded record levels of sales in 2014.
“With more supply in the market expected this year, buyers will likely have more alternatives in all price ranges,” said 2015 CREB® president Corinne Lyall. “It’s a nice scenario for buyers, but it also means that sellers will likely have to adjust their price expectations and be realistic about the amount of time their home will be on the market.”
“A REALTOR® can help navigate market conditions and real estate options, which are always unique to each consumer,” said Lyall. “While challenges in the market can raise concerns for buyers and sellers, it really comes down to their personal situation and knowing what’s right for them. Real estate is truly local.”
For the entire CREB® forecast, visit: creb.com.
by CREB on January 02, 2015
It was a record setting year for Calgary’s condominium apartment and townhouse sectors, as sales reached new annual highs despite year-over-year residential sales declines of 7.5 per cent in December.
Single family sales totaled 708 units in December, a year-over-year decline of 8.3 per cent. Meanwhile, total condominium sales also declined by six per cent over the same time frame, but overall activity remained consistent with long-term averages.
“It is not unusual to see slower activity in the month of December as consumer focus often shifts toward the holiday season,” said CREB® president Bill Kirk. “While monthly sales activity has slowed, it is consistent with December activity over the past several years. Overall, annual sales activity has actually increased by 9.3 per cent over last year.”
Yearly condominium apartment sales totaled 4,742 in 2014, an 18 per cent increase over the previous year. Meanwhile, townhouse sales totaled 3,737 units, a 17 per cent annual increase. Both sectors recorded record years of sales activity.
“Changes in the economic climate are expected to cool housing market conditions in 2015, and December activity may be the first indication of this shift,” said CREB® chief economist Ann-Marie Lurie. “However, any pullback that may occur needs to be kept in perspective as 2014 housing activity far exceeded our expectations.”
City of Calgary sales and new listings totaled a respective 25,664 and 36,329 in 2014. The 13 per cent growth in new listings outpaced the nine per cent growth in sales, contributing to an overall rise in inventory levels.
With more availability in the market, residential benchmark prices continued to level off in December. However, annual average benchmark gains remained above nine per cent. Unadjusted benchmark prices for single family, condominium apartment and townhouse properties all remained similar to levels recorded in November.
Single-family sales totaled 17,185 in 2014, an annual increase of 5.5 per cent. While the single-family sector represents the largest component of sales at 67 per cent, the growth in sales in both the condominium markets has outpaced activity in this sector.
“The activity that we’ve seen in the condominium sectors is, in part, is related to product availability in the lower price ranges,” said Kirk. “The under $400,000 segment of the single-family market within city limits has been declining. With the bulk of condominium products available for under $400,000, more consumers have been turning to these sectors for their housing needs.”
Strong demand for condominium apartments was also met with rising supply levels. New listings totaled 7,297 units in 2014, a 30 per cent increase over the previous year.
While rising listings helped take the pressure off prices, on an annual basis, unadjusted condominium apartment and benchmark prices have recovered and exceeded previous highs recorded in 2007.
In addition to these monthly figures for December, it should also be noted that full details of CREB®’s 2015 forecast will be released on January 14, 2015 at our annual Forecast Conference and Tradeshow.