The month of May is showing more positive signs for the Calgary resale real estate industry as it continues to move in the direction of a balanced market.
Preliminary MLS data indicates sales for the month have increased year-over-year – the second consecutive month it has done that – while listings have fallen and active listings are down from a year ago.
But there continues to be some downward pressure on prices.
“In terms of the last two months of data, everything seems to be moving in the right direction in terms of bringing the market to a more balanced state. Sales are picking up, listings are coming down and this is helping to balance out the market and therefore reducing the downward pressure on prices,” says James Cuddy, senior market analyst in Calgary for the Canada Mortgage and Housing Corporation.
“But of course we’re still in an imbalanced state where we are seeing a disconnect between supply and demand which is why we’re still seeing downward pressure but it’s definitely moving in the right direction.
“It will be interesting to see in June and July if these trends continue. It would be a good sign for sure.”
The official Calgary Real Estate Board statistics for May will likely be released on Monday but here’s a preliminary look at what the market has been showing with month-to-date data as of Thursday on its website:
- MLS sales of 1,729 are 9.92 per cent higher than a year ago;
- New listings have dropped by 22.40 per cent to 3,101;
- Active listings are down by 11.84 per cent to 7,535;
- The median sale price has decreased by 1.87 per cent to $420,000;
- The average MLS sale price has declined by 2.97 per cent to $476,006; and
- The average days on the market to sell a home has increased by 26.67 per cent from a year ago to 57.
The Calgary resale market started moving in a more positive direction in April as the month marked the first time since January 2018 that monthly MLS sales increased on a year-over-year basis. There were 1,547 MLS sales in the city in April which was 2.18 per cent higher than April 2018.
“This is interesting. Certainly we’ll see if this is going to be a trend. Of course it’s only two months of data. I’d be cautious of interpreting it as a trend already but nevertheless it might be indicative of the trend,” says Cuddy.
“One of the main reasons if I was to speculate why this would be happening is because not everything in Calgary is bad right now. There is some improvement in terms of the economy. So even though unemployment rates are still high, even though earnings aren’t where they used to be, we are generally seeing population growth and employment growth. We are seeing more jobs. I think that gets lost in the conversation around unemployment sometimes because the reason unemployment is high is because there are more people entering the labour force than there are jobs being created. But these are good signs for the economy which is obviously increasing the demand for housing.”
Also, the value of housing has increased in the Calgary market because prices are now lower than what they used to be, he explains. Those values are looking attractive for buyers and some of them are deciding because of that to jump into the market.
Cuddy says the number of listings dropping off may be because some people may not be eager to sell their property right now, or don’t have to sell, and they are waiting because of the lower values being obtained in the market.
“In an environment where there’s a lot of listings and not a lot of demand, it puts downward pressure on prices. We’re still in a buyer’s market conditions where these buyers have bargaining power. So for those sellers who aren’t looking to move lower on their price points perhaps they’re waiting to list until the market tightens up,” he says.
“Given the amount of inventory on the market, those people who are considering listing are waiting to do that so that’s why you might see some of those listings coming down.”