Housing recovery a balancing act Growth in new listings outpaced sales preventing inventory declines
City of Calgary, September 1, 2017 – Sales posted a modest gain in August, but a rise in new listings kept inventory levels elevated.
Inventories totaled 6,624 units, where over half were comprised of attached and apartment style properties. While inventories were 16 per cent higher than August 2016 levels, the slight rise in sales prevented further gains in the months of-supply, which remain just above four months.
“Employment growth is contributing to the stability in sales activity, but it is not enough to meet the recent rise in listings and make a substantial dent in inventory levels,” said CREB® chief economist Ann-Marie Lurie.
“Unemployment rates remain elevated and job growth is mostly occurring outside the energy sector, slowing the recovery process. Broader economic improvements will be required prior to it translating into substantial improvements in the housing market.”
The second month of higher inventories compared to sales weighed on prices for the month. The unadjusted city wide benchmark price totaled $442,300 in August. This is 0.3 percent below last month, but remains nearly one per cent above last year’s levels. Overall total residential prices remain four per cent below peak levels.
“Buyers have several options in this market, and sellers need to continue to be realistic regarding the price they expect to receive for their home,” said CREB® president David P. Brown.
“While some of the buyers are re-entering the market, they are also considering all of their options prior to making a commitment.”
The pace of growth in detached sales has closely matched new listings this year. However, inventory levels continue to remain at 3,280 and months of supply pushed up to 3.32. Recent gains in months-of-supply prevented further gains in prices this month. Detached prices totaled $510,900 in August. This is slightly lower than last month, but 1.5 per cent above last year’s levels.
With over seven months-of-supply, the excess supply continues to weigh heavily on the apartment condominium sector. As of August, the benchmark price totaled $263,300. This is one per cent below last month and three per cent below last year’s levels. Downward price pressure in this sector is expected as supply levels remain elevated in the new, resale and rental market.
HOUSING MARKET FACTS Inventories rose across all districts in August. The largest number of units added occurred in the City Centre and all North districts. The rise in City Centre inventories was primarily caused by gain in higher density product, while gains in all North districts was mostly due to detached activity. Detached prices vary significantly by district, with the highest prices recorded in the West end at $738,900 and the lowest prices in the East district at $356,700. Overall prices appear to be stabilizing in most districts, with stronger price gains recorded in the City Centre and West districts. Apartment price declines continue to occur across all districts. Declines averaged from a low of 2.5 per cent in the West district to a high of 6.6 per cent in the North district. The City Centre contains the most apartment style product. Within the City Centre, year-to-date apartment prices have fallen by nearly four per cent compared to 2016, while 2016 recorded an annual decline of nearly 14 per cent below 2014 peak levels. Attached prices were relatively stable at $336,300 in August. This is similar to last month, but 1.5 per cent higher than last year. Despite recent growth for the row segment, August row prices remain well below peak at 6.8 per cent. Semidetached prices are only 2.9 per cent below peak pricing.