November 2015 Calgary Real Estate Market Report


Download CREB®’s December 2015 Report: click here pdf

CREB® commentary:  Weak sales activity relative to inventory places downward pressure on prices.

Persistently high inventory levels within Calgary’s residential resale housing market, combined with weak sales activity, contributed to buyers’ conditions in November.

Monthly sales totaled 1,263 units, a 28 per cent decline from last year and nearly 20 per cent below the 10-year average. Meanwhile, the amount of new listings in the market increased by five per cent over last November, and moved five per cent above 10-year average.

The combination of both soft sales and elevated listings caused months of supply to rise above four months. It represents the third consecutive month that housing supply in the city has remained near four months, which is an indicator that supports buyers’ conditions.

“The housing market is reflecting the realities of the economic conditions,” said CREB® chief economist Ann-Marie Lurie. “Calgary has continued to post job losses in the energy sector, unemployment levels are high, wages are down and recovery expectations have changed. All of these factors have contributed to the weak demand we have seen throughout the year.”

CREB® president Corinne Lyall pointed out that inventory levels still remained 27 per cent below the November highs recorded in 2008.

“Furthermore, price declines have not been as steep as those recorded during the last downturn,” she said.

The unadjusted benchmark price in November declined to $450,700, a 0.5 per cent drop compared to last month and two per cent from last year.

Calgary’s detached housing sector faired the best in November as months of supply increased to only 3.4. Nonetheless, the unadjusted benchmark price declined by 0.6 per cent compared to October, and 1.52 per cent from November 2014, to $510,700.

In the attached category, buyers’ conditions emerged as months of supply increased to 4.8. As a result, the unadjusted benchmark price declined to $352,400, a 0.5 per cent drop from last month and 1.5 per cent from last year.

The apartment sector continued to be the hardest hit of the three sectors. Months of supply increased to 6.9 in November, causing benchmark prices to slide 0.5 per cent from October to $287,000. Meanwhile, year-over-year prices were off by 4.6 per cent.

Despite weaker absorption rates for most of 2015, residential benchmark prices have only recently started to decline – while average and median prices have dropped more dramatically. Lurie attributed that to slower activity in the higher-priced segments of the market, which can skew average and median prices.

Benchmark prices represent changes for similar-type homes, minimizing the impact caused by changes in distribution.

“It is not a surprise that the average price has recorded a steeper decline than the benchmark price,” she said. “Last November, detached sales in the city over $700,000 totaled 159 units or 15 per cent of the market sales. This November, there were only 103 sales representing 13 per cent of the market sales.”

Lyall said knowing the difference between indicators such as average, median and benchmark prices is important for sellers.

“There is no question that this can be a challenging market,” she said. “However, because of these circumstances there is a greater need for market intelligence.”


TD: 10% Peak-to-trough for Alberta Home Prices


Mortgage rates will be rising sooner than we think according to TD Bank.

While the Bank of Canada is expected to keep their overnight rate steady until sometime in 2017,  TD sees the 5 year government bond yield going up by anywhere from 60 to 70 basis points by the end of 2016.  That in turn could be passed through to consumers in terms of higher 5-year fixed mortgage rates of a similar increase.   Mortgage rates could begin rising as early as next month.

What would that mean for Calgary?   Diana Petramala, economist at TD Bank explains:

“Calgary is going through a bit of a correction right now, so higher interest rates are only going to deepen that correction.

Home prices are already down by almost 4%, and we do think that we could see sales and prices fall further through 2016 and 2017.

We’re betting on maybe a 10% peak-to-trough in home prices in Alberta overall; a large amount of it’s being concentrated in Calgary right now.”

You can watch the entire video here, or download and read the transcript here pdf

Community Name Changes

This is just a quick data housekeeping post to inform you that CREB®’s community names and districts will be updated to align with the City of Calgary beginning January 5, 2016.

City Districts

City will be comprised of 8 Districts

The majority of the community boundary and name changes will centre on the following:

  • “Estate” areas will be removed from the MLS® system as they are not recognized by the City of Calgary
  • New community names will be added (eg. Royal Vista )
  • Community updates (eg. Victoria Park & Connaught become Beltline, as the City changed that back in 2003)
  • Existing names will be changed to match City naming (eg. Saddleridge becomes Saddle Ridge)
  • Commercial area names will be expanded to match City naming (eg. Highfield becomes Highfield, Manchester Industrial, Alyth/Bonnybrook and Burns Industrial
  • Zones A, B, C, D will become eight districts
    • North
    • Northeast
    • East
    • Southeast
    • South
    • West
    • Northwest
    • City Centre

The community list with the old/new naming standards can be downloaded here pdf

November 1-14, 2015 Calgary Real Estate Market Update

The narrative hasn’t changed much from last week: sales are down while new listings and inventory remain elevated.

Month-to-date average and median prices are off -2.2 and -3.6% from the same period last year.

I know many are critical of benchmark prices and indices, and that the average is the most fun to reference during both booms and busts because of its hyperbolic nature.  But a word of caution:  in the low sales environment we’re in, it’ll take just one multi-million property like this to sell and significantly boost the average price upwards.

Let’s say that Aspen Woods home sold yesterday. The MTD average price would’ve jumped 4% from $467,384 to $485,910 on that sale alone.

The median price is a much better alternative, and although it’s also influenced by a change in the sales mix, it won’t be skewed by a single high or low sale. If that Aspen Woods home had sold for $12,250,000, the median price would sit unchanged at $409,900.   Just something to think about.

Through two weeks in November, a total of 635 homes sold across the city.  That’s -6.3% below the 10 year average and -10.3% fewer sales than the 5 year average.

New listings are up 4.2% y/y to 1178, above the 10-year average by 4.7% and the 5-year average by 15%.   It’s the highest MTD November level since 2008.

There are 5,699 homes on the market, a 27.2% increase (+1,220) from the 4,479 homes for sale exactly a year ago.

Overall, there’s not much to suggest that prices won’t continue to be squeezed lower in the coming months.

Calgary home sales Nov 1-14 2015

Calgary home sales, Nov 1-14 Y/Y comparison

Calgary New Listings Nov 1-14 2015

Calgary New Listings, Nov 1-14, Y/Y comparison

Sales-to-new-listings ratio Nov 1-14 2015

Sales-to-new-listings ratio,  Nov 1-14 2015

Calgary luxury sales Nov 1-14 2015

Calgary luxury homes sales, Nov 1-14, Y/Y comparison

Calgary Real Estate Stats Summary - Nov 14 2015

Calgary Real Estate Stats Summary, Nov 1-14, Y/Y comparison

Calgary Home Prices Only 1% Off Peak

If someone had told you back in January that Calgary home prices would only be -1% off the peak ten months in, you may have dismissed it as wishful thinking.

Yet, here we are.  The Calgary market has been more resilient than many have expected.

According to the Teranet-National Bank House Price Index, Calgary prices in October were down -1% from a year ago when we were at peak.   Between September and October, prices pulled back -0.8%.

Calgary real estate conditions were spectacular in 2014, and that momentum has helped propel the market through a turbulent economy this year.   But that residual strength has waned.    Sales remain depressed and inventory is growing. Prices will slowly bleed.

However, this isn’t like 2008/2009 when the global financial crisis shut off the lending taps and brought the market to a halt.   No, not everyone has been affected by the energy sector downturn equally.   That’s why you’ll see homes in the higher price brackets impacted more than those in the lower price range.

For example, between 10/11/2015 and 11/11/2015, there were 84 homes sold between $600,000-700,000 with 408 currently homes still for sale.   That’s an inventory absorption rate of 4.9 months, deep into a buyer’s market.

During the same dates, 325 homes sold in the $400k-$500k price range with an inventory of 652 remaining.   That’s only a 2 month supply.

Clearly, sellers with homes priced between $600-$700k will need to be more aggressively priced in order to compete than those listed for under $500k.

Whether buying or selling, it’s important to drill-down to the specific property type, price range and community to find out how the market is truly performing in your desired area.

Teranet - National Bank HPI, Y/Y percentage change for Calgary

Y/Y percentage change for Calgary

Calgary Index

Calgary Index

HPI for Canada

HPI for Canada

Calgary New Home Price Slide Extends Into September

Calgary new home prices slid a little further in September according to the New Housing Price Index released by Statistics Canada.

The year-over-year price decrease in Calgary was the second in as many months. Up until August, prices had not fallen on annual basis since January 2012.

In September, prices were down -0.5% y/y  but were unchanged from August.

Calgary NHPI, Y/Y Percent Change

Calgary NHPI, Y/Y Percent Change

Looking out across the country, the highest annual growth was in Hamilton with an increase of 3.7%.   The largest y/y decrease was in Regina where prices fell -1.4%.

You can read the entire Statistics Canada release here.

NHPI, Sept 2015

NHPI, Sept 2015 (click to enlarge)

November 1-7, 2015 Calgary Real Estate Market Update

Calgary home sales in the opening week of November were down 29% y/y and below the 5 & 10 year average by -11.1% & -5.7% respectively.

Glancing at the chart below, you’ll see the outliers in November 2006, 2013 & 2014 to the upside, and 2008 – when the financial crisis was in full swing – to the downside.   Overall sales this past week have been about par with 2007, 2009-2012 levels.  All that to say that it was a “meh” start to the month.

Calgary real estate sales - Nov 1-7 2015

Calgary real estate sales, Nov 1-7, Y/Y comparison

There are 25.5% or 1,154 more homes on the market than one year ago.   The 650 new listings month-to-date is the highest since 2008.

Calgary New Listings - Nov 1-7 2015

New Listings, Nov 1-7, Y/Y comparison

The sales-to-new-listing ratio for Calgary sits at a very comfortable 50.92%, but that masks the disparity among different housing categories.

To the far left of the market strength spectrum are Apartments with a buyer’s market ratio of 35.21%.    Last month, Apartment prices were the hardest hit with the benchmark price falling to $288,300, nearly a -4% drop year-over-year.

Detached homes are at a 62.86% sales-to-new-listings ratio…but again, when you dig deeper into that housing category you see that market strength is dependent on the price range:

“More than half of detached sales in October occurred below $500,000,where demand relative to supply remained relatively tight –thereby potentially offsetting some of the price losses in the higher end of the segment… while some price adjustments have occurred in the higher-end detached category, this is less likely for the under-$500,000 detached segment” – CREB®

These diverging trends highlight why it’s important to look at each property on a case-by-case basis when considering how much to offer or list it for.   General trends don’t always reflect what’s happening to individual homes on the market.

Sales-to-new-listing ratio Nov 1-7

Sales-to-new-listing ratio: November 1-7, 2015

Calgary luxury home sales - Nov 1-7 2015

Calgary luxury home sales, November, Y/Y comparison

Calgary Real Estate Stats Summary - Nov 7 2015

Calgary Real Estate Stats Summary, Nov 1-7, Y/Y comparison