If you’re wondering what the Spring residential real estate market is going to be like in Calgary this year, take a look at some of these numbers.
It’s all about the inventory. And the inventory these days is quite low.
According to the Calgary Real Estate Board, February ended with the lowest level of inventory for that month since 2006.
The number of homes on the market for sale were 2,750 which was down 23.8 per cent from a year ago as new listings for February fell by 48.6 per cent year-over-year to 2,389. The months of supply, which measures how long it would take to sell all the listings in a market given current demand, was a miniscule 1.58 months at the end of February.
The inventory at the end of February included 1,292 for detached, 255 for semi, 327 for row and 876 for apartments.
The low inventory has continued into March. As of Wednesday, CREB stats indicate active listings for the month were 3,034, down 25.31 per cent from a year ago while new listings have plunged 44.18 per cent year-over-year to 1,529. The current breakdown of active listings is: 1,389 for detached; 380 for row and townhouse; 286 for semi-detached; and 979 for apartment.
Ann-Marie Lurie, Chief Economist with CREB, said if we do not see a shift in supply the market could see further upward pressure on prices over the near term.
“The biggest challenge is seeing supply come onto the market. That’s the one thing we keep waiting to happen,” said Lurie. “But it doesn’t seem to be happening. It’s a bit early but we’ll see what happens in the next month here. Our inventories are quite low.
“We’re seeing shifts in distribution but if we don’t see those inventories come up then we could have stronger price gains than we expect. I think that’s really what will be important as we move into March, April, May because we know that demand is still there. Not at the pace of last year by any means but it’s still relatively strong.
“We still have under two months of supply and that’s quite low. That’s what I am watching closely in terms of how Spring plays out because it’s not a surprise the sales are down from record highs. No big surprise there. But we’re just not seeing the listings come onto the market. And that’s making conditions tight.”
Lurie said the lack of listings in the market is preventing more new listings from coming on the market.
“People need to go somewhere. So with the higher interest rate environment it’s a lot harder for potential move-up buyers so we’re not seeing a lot of product come onto the market on the lower end especially within the detached market. I think that’s a factor,” she said, adding there has been improvements in the apartment market but simply not enough to increase the supply needed in the market.
While housing starts activity has improved, it’s going to take time to see supply in the apartment market come on and meanwhile anything being produced on the detached side tends to be at a higher price range.
“So it’s not necessarily solving the challenges that we’re having really in the lower end of the market. So listings are shifting for sure. We’ve seen some improvement marginally in some aspects. We’ve seen inventories improve a bit at the upper end of the market. We’re just not seeing it improve at the lower end of the market.”
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)