“The worst may be over” for the Alberta housing market states RBC Economics in their Housing Trends and Affordability report out today. The release continues in part:
“Housing markets in Alberta experienced a particularly violent bout of anxiety in the face of plummeting oil prices at the start of 2015. Sellers rushed to list their homes, and buyers hit the pause button; the combination of which dramatically loosened demand-supply conditions that turned the table squarely in favour in buyers.”
Following a period of rapid price increases in 2013 and most of 2014, property values came under downward pressure in the first quarter of 2015… Resale activity stabilized recently, thereby suggesting that the worst may be over for the market.” (Source)
For Calgary specifically, it meant that housing affordability improved in the first quarter for two-storey homes, bungalows and condo apartments. Still…
“Housing affordability may not be top of the mind for homebuyers at this juncture—uncertainty about global oil markets and, above all, Alberta’s economy likely are dominant considerations. More recent developments show that the freefall in resale activity has stabilized this spring.”
This stabilization has also been evident thus far in June with sales only off the 5 & 10 year average by about 50; a marked improvement from earlier this year when every sales statistic was followed by: “the lowest level since…”
Further helping brace Calgary’s market is the pullback in new listings. Month-to-date, new listings are below the 10 year average by -13% and the 5 year average by -6.6%.
Compared to last June, there have been 368 fewer sales (-19.2%) but 657 fewer new listings (-22.5) The sales-t0-new-listings ratio is at a very active 68.55%, a few percentage points higher than last year during that time.
That’s not to say buyers are feeling rushed or forced into multiple offer situations like last summer. Consider this: only 198/1,550 (12.8%) of homes have sold for list price or above this month, less than half the amount during the first 3 weeks last June: 479/1918 (25%).
Inventory, which had been up significantly on an annual basis earlier this year, has seen the gap shrink. There are 5,370 active listings today compared to about 4,945 a year ago, a 9% y/y increase. Back on January 21st, inventory was up a staggering 67%.
Both the average and median price are showing slight annual declines, down -2.94% and -1.66% respectively with the largest declines in the Apartment segment so far this month.