July housing market picks up with MLS sales on the rise

Calgary real estate news. There was some glimmer of hope for Calgary’s struggling resale housing market in July but the increase in MLS sales was likely the result of demand that was put off from earlier months when the height of the COVID-19 pandemic was in full swing.

According to July MLS data by the CREB, there were 1,835 transactions during the month, which was a 12 per cent increase from July 2019.

However, year-to-date MLS sales of 8,474 remain 15 per cent below the level for the same period a year ago.

“There have been improvements relative to the lowest sales levels caused by COVID-19, but it is too early to say things are shifting back to pre-pandemic levels,” said Ann-Marie Lurie, CREB’s Chief Economist.

“We are still facing record high unemployment rates, significant government aid, and uncertainty throughout the business community. This will continue in the coming months.”  

For the month, new listings of 3,036 were up 12 per cent from a year ago while the inventory of homes for sale at the end of the month fell by 10 per cent year-over-year to 6,647. 

The benchmark price – what CREB describes as the price of a typical home on the market – fell by one per cent from a year ago to $418,000.

The months of supply, which measures the number of months it would take to clear the inventory with the current demand, was 3.62 months, representing a 19 per cent year-over-year decline.

“COVID-19 shutdowns occurred over the traditionally busiest quarter for real estate sales. Some of the recent gains reflect activity that would have occurred in those months shifting into July. Some demand is returning to the market, but so is the supply,” said the real estate board.

“Inventory levels trended up over the previous month, offsetting some of the sales growth. Higher-density row and apartment products have supply/demand ratios that are well above traditional levels. Higher-than-typical levels of supply relative to sales for higher-density product also had a more significant impact on prices for those product types. Year-over-year price declines ranged from more than eight per cent for row properties to nearly three per cent for semi-detached and apartment properties. 

“Tighter market conditions for detached properties supported some upward price trends and year-over-year prices were stable compared to the previous year. However, on a year-to-date basis, detached prices remain nearly one per cent lower than last year’s levels.”

The real estate market may have picked up in terms of numbers and statistics in July but for those on the street, living the reality, it’s still a tough go. 

Realtor Jon Dick, one of the top producers at RE/MAX Real Estate (Central) in Calgary, said the July numbers are buoyed by the lack of activity in April and May, which is usually a strong time for real estate transactions.

“Probably June and July, the volumes that we produced, some of that would have been business that normally would have been written earlier in the year,” said Dick. 

“I think the next couple of months will give us more of an idea if June and July were in fact what I think they were. We managed to pick some up from April and May that didn’t happen and August and September will probably give us a more accurate picture of where we’re at . . . It’s tough sledding out there for sure.”

Realtor Carrie Peddie, another top producer for the Central office, said that despite all the challenges in the market this year it still has been a busy one for her personally, “which is really odd given COVID.”

“I deal with a lot of seasoned buyers and sellers and I believe a lot of people kind of woke up, got off the fence, because they realized there were a bunch of deals to be had and our inventory was low so it created a little bit of excitement in the market that we haven’t seen. So I had a flurry of activity. A lot of buyers have decided to buy. So my July was exceptional,” said Peddie.

Realtor Ken Richter, who is also a top producer for the Central office, said there has been a huge pent-up demand to buy considering the way the market was in recent months. But make no mistake about it, the real estate market remains slow at this stage as it grapples with the economic challenges posed by the COVID-19 pandemic and the continued downturn in the oilpatch.