Inventory Watch (April 2010)

Year-over-Year Inventory Comparison

Metro-Calgary SFH inventory has increased over 30% in a month and is quickly closing in on last year’s highest level.  Condo inventory is already higher than the same time last year and looks to continue increasing.

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In 2009, SFH month-end inventory peaked in March with 4369  (Currently at 4114)

Condo inventory had peaked a month earlier with a February month-end level of 2065 (Currently at 2176)

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click to enlarge

While nowhere near the peak levels experienced in 2008, this inventory increase is good news for buyers that have had limited selection throughout the last half of 2009. Sellers have to deal with increased competition and should be carefully monitoring the next several months. With increasing rates and tighter lending standards beginning mid-April, the buyer pool will be decreasing in the near future. Will it be enough to temper the Calgary housing market? Or will the impending changes result in a surge of sales and prices in the short-term?

5 responses to “Inventory Watch (April 2010)

  1. Here are my seasonally adjusted stats for March:

    Inventory was well ahead of pace, and was about 500 above where it “should” have been according to the usual February to March changes.

    This was a result of increased listings which were about 14% higher for the month than what was expected.

    Sales on the other hand were also 10% higher than expected which is why the ab rate is still balanced.

    Mean and median were almost exactly on pace, as was sales:new listings. This tells me the market hasn’t moved dramatically yet into a bear mode but might tip over later this year.

    I think all in all what we are seeing is a high volume market – high listings, high sales, high inventory. This is entirely expected given the low interest rate environment.

    One interesting stat is the percentage of “vacant” properties compared to total SFH listings. This is still very low compared to recent years.

    To me this suggests there are many people out there wanting to “move up” this year and listing their own homes in anticipation of buying before rates go up.

    It will be interesting to see if there are enough first time buyers to support the move-ups.

    My guess is from Bob’s “ab rate by price range” data is that there are for now. If this is the reason for the inventory increase, we should see it tail off in the next couple of months, coupled with an increase in sales:new listings.

    My guess is is that prices won’t deviate from seasonal changes for the next few months.

    Incidentally my calculations for end of April data predict an inventory of about 4300, mean of 473000, median 427000, sales 1450, listings 3000.


    Mike Fotiou says: Thanks again for this, Jimmy! It will certainly be interesting to see how the rest of the month plays out and compares to the seasonally adjusted calculations.

  2. Good analysis. Jimmy. Will the avg. price go to $500K during the summer? It seems that the market is totally recovered to 2006-2007 peak stage.

  3. daniel:

    Seasonal patterns suggest that the peak will be about 485k. I don’t think it will get above 480k though, since the inventory numbers are now less tight than they usually are.

  4. Mike but not mike F

    Simple supply and demand.

    Supply is growing faster than average (unsold homes) and demand is cresting (pre-April 19th mortgage changes) and should fall again in May, till June, when it may pick up before July 1st (prime rate hike?) then fall again as mortgage rates keep going up.

    There isn’t much cents to be putting your dollars into RE right now.

    On a side note I’ve noticed a lot more houses coming up in the low $200’s and even below $200k’s. I haven’t see that in years and that’s a good thing. Also on the upper end neighbourhoods I’ve been seeing lower prices each month, another good sign.

  5. The CAD is at par with the USD. Interesting rate will be up soon and the demand side is already exhausted. Only move-up buyers can support the high avg. price in the next few months?

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