Let’s begin by clarifying what the ‘new listings’ (NL) stat reveals about the market: not much on its own.
Relists. NL ignores how many expired or were terminated & then listed again. It counts as a NL because it’s assigned a different MLS® number, but net inventory gain would be zero.
Sales-to-new-listings ratio. How many homes have sold compared to how many were listed? An increase in sales could offset a rise in NL.
Inventory. Is supply inflating or deflating? More NL don’t translate directly to more homes on the market. Homes sell, expire, or are relisted, all of which affect the impact NL have on the inventory level.
Comparison. Are you comparing month-over-month (which is very seasonal) or year-over-year? Is the comparison being made to a record low? A record high? Historical average?
With the above four points in mind, let’s look at the Calgary market.
Month-to-date NL are up 41% year-over-year. Again, in isolation that does not reveal much. Let’s add some context:
1. Relists. Of the 500+ listings that were removed from the market this month, about 15% were listed again a few days later, all of which counted as a “new listing.”
2. Sales-to-new-listing ratio. Last December, it was over 110% which meant inventory was being chipped away despite listings being added to the market. Currently it’s at 78%, not nearly as hot. MTD sales are down -3.44% Y/Y.
3. Inventory. Only looking at the NL stat, you would expect supply to be increasing. In fact, over the past month inventory has dropped -13%. You can confident it will be higher again in January, though. (For more information on seasonality, click here.)
4. Comparison. NL last December were at the second lowest level going back over a decade so the year-over-year comparison is exaggerated. Still, NL are above the historical average for this time of year.
To keep the 37.09% y/y inventory hike in perspective, last December was the lowest level we had for the month since at least 2006. Read this post from January to recall how tight the market was at the beginning of the year. The benchmark price that month jumped 10% year-over-year. I think it’s a positive development that the market will be more balanced this time around.
Month-to-date, the average and median price in the City of Calgary is up 2% & 3% year-over-year.
I suspect the benchmark price at month-end will moderate the condo-apartment’s 17% median price growth, and increase the SFH’s & townhomes flat reading.