New statistics indicate that our housing market is leveling off. Could this be, in light of other news that Calgary is experiencing the worst recession ever?
Our first recession of note which was just a few years before World War I, was something Calgary didn’t really recover from until almost 1950. At that time, speculators bought up land and the City of Calgary pushed the city limits way out to 50 Ave in the south in anticipation of needing more land. We had more vacant lots than houses in some areas and it took into the early 1960s to truly fill out.
In analyzing the real estate statistics issued by the Calgary Real Estate Board (CREB®) for June 2016, it would appear that important segments of the Calgary market could be seeing some stabilization of prices, mostly likely due to higher number of listings and sales not declining as quickly as experienced earlier this year.
The story in the detached home sector
The number of new listings entering the market in the single-family segment has started to slow down relative to the number of sales. In fact, the percentage of new detached home listings fell faster than sales did – 5% to 3.7%, respectively, which is the second time this has happened since January 2016. The result of this is that the benchmark price for single family homes was $502,400, which was just .4% more than May 2016 and only 3.4% lower than June 2015 which isn’t bad, considering what’s happened in Calgary in the past 12 months.
It’s interesting to study the detached segment of Calgary’s market because two of every three transactions in Calgary are in this sector.
CREB® chief economist Ann-Marie Lurie has noted that the detached home market has been inching towards balance. This is what has prevented prices from dropping at more accelerated rates than what’s occurred in the first two quarters of 2016.
Another encouraging stat is that the months’ supply of inventory in the detached market segment has been less than three in the last three months. In layman’s terms, this means it would take just under three months to sell all the homes currently listed for sale. Lurie also explains as a sign of more balanced conditions in Calgary.
Sellers should be somewhat encouraged by this news, but everyone needs to keep it real going forward because we are still in challenging times and our economy still needs to get on the road to recovery.
June 2016 was also the first time since late last year that there has been a bit of a gain in single family home prices which eased the rate of decline, going from a 2.2% decline the first three months of this year to just .7% in the second quarter.
What others are saying about Calgary’s housing
The Conference Board of Canada weighted in last month, also calling our housing market balanced overall. Robin Wiebe, an economist with the board, noted that Calgary’s MLS® prices may rise in the short term perhaps by as much as 2.9%.
One of the only things saving us from a free fall, the kind that Calgary saw in the early 1980s, are the remarkably low interest rates. Hopefully the word “crash” is never going to be used when people talk about the recession of 2016.