Stronger single-family home sales steer market towards recovery
Here we are nearly nine weeks into 2017 and a sense of optimism in Calgary is hovering in the air. That's because sales are trending upwards, specifically in the detached home sector where the numbers are definitely picking up. It's a slow transition but enough to hang your hat on.
In February there were 1,342 single-family home transactions in Calgary which is a most welcome improvement over the numbers we've seen in the past two years. That number is still about 19% shy of long-term averages but we're on the right road.
And as the sales figures start to rise, we are seeing the number of single-family homes on the market in Calgary drop. Currently there's just under a 2.5 months supply of detached homes on sale and the lower inventory level is helping maintain home prices. Last month, the unadjusted benchmark for detached homes was $501,900 – higher than January 2017 and a mere 1% under January 2016 prices. The quadrant of the city with the lower inventory is the North West.
Calgary Real Estate Board (CREB) president David P. Brown said in his monthly report that both realtors and sellers are feeling very positive and upbeat about the market knowing that there's a higher change of selling quickly and at a good price, or at least, a better price than maybe they thought they might get. There is the possibility that this new invigorated outlook might mean that sellers will jump into the market sending inventory levels sky high which may undo all the good stuff we saw in February. Brown cautions people to remain realistic with pricing as well as optimistic with the outcome.
Calgary's market as a whole
Outside of the detached sector, there has been higher than normal inventory levels across the board; however, this eased a bit in February which is a good omen for market stability in 2017. The month's supply of residential product in Calgary overall is 3.4 months, a much better number than the 5 months of supply we experienced in February 2016. The sales-to-new-listings ration in Calgary if you recall was 39% last February and last month it rose to 55%.
Increased sales trending last month combined with a reasonable number of new listings and lower inventory numbers as of right now, it's also reasonable to assume that the market in Calgary is on its way to recovering, becoming more balanced and predictable.
Ann-Marie Lure, CREB's chief economist refers to February's activity as a “transition” and gives credit to two things: more stability in employment with no mass-offs occurring in recent months and improved single-family homes sales. As encouraging as it is to see people purchasing detached homes and being able to afford them, Lurie believes it will take more time for the market as a whole to catch up and for prices to recover to where they were in last 2013. However, the signs are all there, the indicators are pointing to stability and the giant roller-coaster will hopefully continue it's gradual climb from whence it plummeted.
Apartment condos are that one segment of the market where there is too much inventory. We're at 5.9 months supply of condos which is not supporting any improvement on price even with someone improved sales last month. There are surprisingly a large number of units priced at under $200,000 on the market with the highest numbers of apartment condos for sale recorded in the centre of the city. The benchmark price last month for apartments was $269,200 which is 0.26% less than January's and more than 5% under last February's benchmark. Duplex and town home has seen some gains in sales but there are still some serious price adjustments especially with town homes and not so much with semi-detached properties.
CALGARY HOUSING MARKET STATISTICS: February 2017
Source: Calgary Real Estate Board
Feb 2017 YTY Comparative Analysis
COMBINED CALGARY RESIDENTIAL SALES
Sales: 1,342 (+18.76%)
New Listings: 2,457 (-15.48%)
Active Listings (Inventory): 4,493 (-20.94%)
Median Sale Price: $425,000 (+ 1.73%)
Average Sale Price: $479,648 (+1.2%)
CALGARY DETACHED HOME
Sales: 825 (+19.05%)
New Listings: 1,294 (-19.68%)
Current # of Listings: 1,990 (-32.61%)
Average Days on Market: 41 (-7.85%)
Median Sale Price: $492,000 (+5.24%)
Average Sale Price: $557,061 (+2.78%)
CALGARY METRO APARTMENT/CONDO STATS
Sales: 236 (+40.48%)
New Listings: 581 (-8.79%)
Current # of Listings: 1,387(-0.22%)
Average Days on Market: 66 (+32.11%)
Median Sale Price: $273,000 (+2.99%)
Average Sale Price: $282,429 (+1.87%)
CALGARY METRO ATTACHED STATS
Sales: 281 (+4.46%)
New Listings: 582 (-11.68%)
Current # of Listings: 1,116 (-16.72%)
Average Days on Market: 51(+1.48%)
Median Sale Price: $342,000 (-1.44%)
Average Sale Price: $391,301 (-2.81%)