To read that new listings in Calgary are up over 19% year-over-year might make you wonder if a market shift is in the works. Are sellers starting to list en masse?
A 19% increase over the last couple years might seem significant until we get a broader perspective. We can’t analyze the new listings statistic in a bubble. First, let’s zoom out and look at a few more years data:
While new listings are elevated this month compared to 2011 & 2012, most notably they are nowhere near 2008 levels when inventory levels peaked.
In 2008, a large portion of those new listings were because of speculators that jumped in and bought in 2006- 2007 expecting prices to keep rising. Today, there isn’t the same extent of investor-driven activity and that over-supply has worked its way out of the resale market as we can see the chart below:
Besides total active inventory, we need to consider the amount of sales.
Month-to-date, the Sales to New Listing ratio for all of Calgary is 61.67%. Last April during the same period the ratio was 61.61%. So even though new listings are elevated over 19% this month, sales have also increased in step leaving the ratio unchanged.
Along with the Sales to New Listing ratio, the Inventory Absorption Rate which looks at how many months it would take to sell the standing inventory is a useful measurement because it takes into account homes that have already been listed. The lower the IAR, the more pressure on prices to rise higher.
In any case, inventory could definitely stand to increase as it has been slim pickings for buyers these last few months.