Sales-To-New-Listings Ratio Points To Further Price Gains

One measurement to gauge the real estate market is the sales-to-new-listings ratio.   It’s simply calculated by dividing the number of sales by the amount of new listings.  For example, a ratio of 0.5 (50%) means one home is sold for every two homes that are listed.

Economist Will Dunning had this to write: “Price growth depends on the state of balance in the market. My forecasting system estimates that prices will rise at about the same rate as overall inflation when the sales-to-new-listings ratio is about 51%.”

ATB’s economist Todd Hirsch wrote this in a research note last month: “The ratio of home sales to new listings gives a good read on the overall balance in the residential market. There is a distinct seasonality to home sales, and as a result the ratio does fluctuate up and down.”

The two charts below show the close correlation between the sales-to-new-listing ratio and prices in the Calgary real estate market.



Price Change Comparison

Price Change Comparison

Month-to-date in September, the overall sales-to-new-listings ratio is at 63.58% compared to 55.52% this time last year – both figures above the 51% needed for home prices growth to keep pace with inflation.

You can track the ratio daily on my website here. Stats Page

3 responses to “Sales-To-New-Listings Ratio Points To Further Price Gains

  1. Pingback: November 1-7, 2013 Calgary Real Estate Market Update | Calgary Real Estate Review

  2. Pingback: Calgary Housing Inventory Dropping Even As New Listings Rise | Calgary Real Estate Review

  3. Pingback: More Calgary Homes Selling Than Are Being Listed | Calgary Real Estate Review

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