August 2015 Calgary Real Estate Market Report

creb

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

CREB® commentary:  Calgary’s residential resale housing market recorded further easing in absorption rates in August due to weaker sales activity.

Sales in the city declined by 27 per cent to 1,643 units last month relative to the same time last year and 12 per cent below 10-year averages.

“Persistent weakness in the energy sector weighed on sales activity this month, which once again retracted to levels well below the norm for the city,” said CREB® chief economist Ann-Marie Lurie.

Residential unadjusted sales-to-new-listings ratio eased from 67 per cent in July to 60 per cent in August, contributing to a monthly rise in inventory levels to 5,146 units. Combined with weaker sales activity, months of supply pushed up to 3.13 months.

While every price range experienced fewer sales per new listing, homes in the higher price ranges saw the most significant decline in absorption rates compared to last year, noted Lurie.

Year-to-date new listings in the $600,000-plus category increased in share of activity compared to last year. However, sales activity in this price range represented 18 per cent of all the sales last month, down from nearly 20 per cent last year.

“With more options in the higher-end of the market, sellers will need to consider their competition as well as their goals regarding a sell date,” said CREB® president Corinne Lyall. “This will influence the pricing strategy they agree upon with their real estate professional.”

Lurie added that despite challenges near the top of the market, absorption rates in the under-$500,000 detached sector remained relatively tight and is likely causing some price trend discrepancies.

Despite weaker absorption rates, benchmark prices remained relatively stable, totaling $456,300 in August.  Lurie credits this steadiness to both the detached and attached sectors, which have remained more balanced relative to the apartment sector.

The apartment sector continued to struggle with increased competition from competing properties during the month, as unadjusted months of supply rose to 4.3. Increase supply is ultimately weighed on pricing, as prices declined on a year-over-year basis by 1.44 per cent in August.

Overall, the combination of price declines and higher inventory levels in some segments of the market are influencing buying patterns in Calgary, said Lyall.

“Improved selection in these segments is giving buyers the opportunity to be discerning about their purchase decisions,” she said. “They may be weighing their options between resale and new product, along with what community fits their lifestyle.

“Although market conditions affect consumers’ real estate decisions, so do their lifestyles. People move for a number of reasons, including proximity to work and schools, along with changes in family dynamics.”

RBC Revises Forecast On Alberta’s Housing Market, Prices To Increase In 2015/16

This past January, RBC predicted that Alberta home prices would increase 1.7% this year and then 0.1% in 2016.  Meanwhile, sales were projected to drop -6.5% in 2015 and then -9% more in 2016.

Skip ahead a few weeks to February, and RBC’s Alberta forecast was downgraded:  prices were now expected to fall -0.5% with the caution that “more significant price declines may occur in 2016.” Home resales were to plummet by nearly -16%, over double the previous forecast.

While the latest forecast from RBC is still expecting a significant drop in sales (-17.8) this year, they’re now projecting a 7.1% rebound in 2016.

Prices are again forecast to increase, this time by 0.7% and 2.1% for 2015 and 2016 respectively.

To read the entire RBC forecast, click here

Related news article: Alberta housing market forecast to rebound in 2016

RBC forecast August

RBC price forecast evolution: Jan, Feb, August 2015

August 1-14, 2015 Calgary Real Estate Market Update

Calgary home prices “are effectively flat lining, not correcting more sharply as some feared,” according to the BMO Economics research note released yesterday.  An RBC Economics report concurs, stating that “downward price pressures remain contained in Calgary.”

However, BMO cautions Calgarians to “stay tuned…with WTI oil prices testing the low-$40 range.”  RBC also acknowledges that while the benchmark price was unchanged month-over-month, annual price growth slowed further in July.

It’s been oft-repeated that overall market conditions mask differing trends which vary by property type, price range, and neighborhood.   But in general, the year-over-year price trend is unmistakable, both in terms of new housing and the MLS® benchmark.   Price growth is shrinking and dipping below year ago levels, albeit slowly.

Sales so far in August are below historical averages, but then again, so are new listings.  It’s very much a subdued but balanced market.

New housing starts plummeted in July, which should keep supply in check and help shore up the resale market, unlike in 2008 when inventory skyrocketed and depressed prices.  On the flip-side, there are many jobs associated with residential construction that may be impacted depending on the duration of a downturn.   Add those to the ever growing number of energy workers laid off and we’ll see the labour market begin to have a larger influence on housing in the months ahead.

Calgary home sales August 1-14 2015

Calgary home sales, August 1-14, Y/Y comparisons

Calgary new listings August 1-14 2015

Calgary new listings, August 1-14, Y/Y comparisons

Calgary luxury home sales August 1-14 2015

Calgary luxury home sales, August 1-14, Y/Y comparisons

Sales-to-new-listings ratio August 14 2015

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

Calgary Stats Summary Aug 1-14 2015

Calgary Stats Summary, August 1-14, Y/Y comparison

Calgary New Home Price Gains Continue To Shrink

Calgary new home prices posted their first month-over-month gain of the year in June, but annual growth continued to shrink according to the New Housing Price Index released by Statistics Canada.

“For the first time this year, new housing prices were up in the CMA of Calgary (+0.1%). Higher land prices were largely offset by builders reducing prices because of market conditions,” stated the government agency.

Year-over-year, prices were up 0.7%, the smallest annual gain dating back to February 2012.

Month-over-month change

Month-over-month change

Year-over-year percent change

Year-over-year percent change

Source: Table CANSIM 327-0046.

Source: Table CANSIM 327-0046.

Calgary Repeat Home Sale Prices Take Hit In July

Calgary led the nation with the largest monthly and annual decline in repeat home sale prices according to the Teranet-National Bank House Price Index released today.

Prices fell -1.9% in July and were down -2.3% year-over-year.  That’s the largest annual drop dating back to June 2011.    After peaking last October, Calgary home prices are now off by -4.6%.

The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method.

Y/Y Percent Change

Y/Y Percent Change

Source: housepriceindex.ca

Source: housepriceindex.ca

Chestermere Real Estate Market Report: July 2015

chestermere

July was a tough month for Chestermere as residents had to cope with flooding, hail & power outages.

Home sales during the month totaled 32, barely over half what sold in June (63) and off  -30% from last July (46).

In a small municipality like Chestermere, the monthly stats can be fairly volatile, especially when looking at prices.  So while the average price was up +10% y/y and the median +13.1%, the benchmark price (not skewed by high or low sale prices) was up a more realistic 5.8% which better reflects market conditions.    The 5.8% is the lowest annual growth since December 2013, highlighting how strong the market has been for the past year and a half.

Expect price growth to continue slowing as the inventory absorption rate (4.19 months) and sales-to-new-listing ratio (48%) points to a buyer’s market.

In other news, the results of the 2015 census are in showing that Chestermere’s population has reached 18,496 – a 7.5% jump from last year.  (Continue reading more here…)

You can download the City of Chestermere historical stat package along with additional charts here pdf

Airdrie Real Estate Market Report: July 2015

Airdrie July 2015 real estate stat summary

Airdrie July 2015 real estate stat summary

The Airdrie benchmark home price slipped -0.3% from the previous month and annual growth slowed to 1.9% as elevated inventory levels and economic uncertainty sapped market strength further.

Airdrie benchmark price growth

Airdrie benchmark price growth

Sales in July totaled 163, a -10.4% drop from the previous year.  Meanwhile, inventory was up 37.7% y/y with 358 listings for sale at the end of the month.

On a positive note, the inventory absorption rate improved slightly from June to 2.2 months, as did the sales-to-new-listings ratio, inching up to 61% so I expect prices to be fairly flat in the short term.

Compared to last July, however, market conditions have clearly weakened.  You can see the inverse correlation between the benchmark price and the months of supply in the graph below:

Airdrie supply benchmark price

Airdrie Supply VS Prices

You can download the City of Airdrie historical stat package along with additional charts here