Calgary’s resale housing market in November stayed true to the course for 2018.
The Calgary Real Estate Board’s monthly MLS report for November once again highlighted the typical pattern that has established itself in the city’s residential real estate market in 2018 – low demand combined with elevated inventory leading to lower prices.
“It appears that we’re kind of following that same trend of buyer’s market conditions. It seems to be really persisting in the market right now,” said James Cuddy, senior analyst in Calgary for Canada Mortgage and Housing Corporation.
“The mismatch between supply and demand is putting downward pressure on prices . . . This is the result of the ongoing economic challenges that we’re seeing in Alberta right now, particularly in the energy sector. Overall, employment growth has been relatively soft but above and beyond all that we’re also well familiar that there are other headwinds in the market right now. There’s new mortgage rules for both high ratio and low ratio mortgages that were implemented in the not-too-distant past. But we’re also seeing higher interest rates becoming a reality.”
The full CREB report can be found here. Here are some of the key highlights for November:
- MLS sales fell by 16.95 per cent year-over-year to 1,171;
- Dollar volume of sales was off by 20.47 per cent to $518.7 million;
- New listings of 1,914 were down 7.13 per cent;
- Inventory at the end of the month was 6,501, up 14.39 per cent from a year ago;
- Months of supply to sell a property under current demand conditions rose by 37.74 per cent to 5.55 months;
- Sales to new listings ratio dropped by 7.23 per cent to 61.18 per cent;
- Sales to list price ratio also fell by 0.66 per cent to 96.38 per cent;
- Average days on the market to sell a home rose by 20.47 per cent to 63;
- The benchmark price – which CREB says indicates the price of a typical home in the market – declined by 3.25 per cent to $422,600;
- The median price dropped by 4.13 per cent to $395,000; and
- The average sale price decreased by 4.23 per cent to $442,940.
“Recent challenges in the energy sector have weighed on consumer confidence over the past month. Combined with weakness in the employment market and further gains in lending rates, this is impacting ownership demand,” said Ann-Marie Lurie, CREB’s chief economist.
CREB said MLS sales are nearly 20 per cent below long-term averages and the inventory was 32 per cent higher than typical levels for November.
“Higher inventories and weaker sales are resulting in buyer’s market conditions and price declines,” said Lurie.
Cuddy said the elevated inventory has its roots with the recession back in 2015 and 2016.
“In terms of our forecast, we’re expecting sales to remain largely flat through to 2019 and 2020,” he said. “In the near term, it largely depends on what happens in the energy sector. So we’ll see if some of the recent changes by the provincial government has a positive effect on that sector. Obviously that will have a positive impact on demand for housing.”