Housing markets across the country have faced some stiff economic headwinds over the last few months.
The rising cost of living, increasing interest rates and the threat of a looming recession have put a damper on activity in the resale market these days.
Calgary’s real estate market has experienced that first hand recently. In October, MLS sales eased compared to last year’s levels due to slower activity in the detached sector.
But the Calgary Real Estate Board said the 1,857 sales during the month, while down close to 15 per cent year over year, are still stronger than long-term trends and activity reported prior to the pandemic.
Year-to-date sales have reached 26,823 and with only two months to go, 2022 will likely post a record year in terms of sales, added CREB in its monthly MLS report.
“Calgary hasn’t seen the same degree of pullback in housing sales like other parts of Canada, thanks to persistently strong demand for our higher density product,” said Ann-Marie Lurie, CREB’s Chief Economist. “While our city is not immune to the impact that inflation and higher rates are having, strong employment growth, positive migration flows and a stronger commodity market are helping offset some of that impact.”
Key stats for the market in October include:
- Total sales volume of $946,283,065, down 10.60 per cent from a year ago;
- New listings of 2,175 were off by 12.97 per cent year over year;
- Inventory at the end of the month was 3,887, down 20.28 per cent from last year;
- Months of supply, which measures the number of months it would take to sell all the listings given the current demand, fell by 6.25 per cent to 2.09;
- The sales to new listings ratio inched down by 2.02 per cent to 85.38 per cent;
- The sales to list price ratio also fell by 0.17 per cent to 97.62 per cent;
- The average number of days to sell a property was down 7.37 per cent to 40 days;
- The overall benchmark price rose by 9.65 per cent to $523,900;
- The median sale price was up 5.02 per cent to $460,000; and
- The average MLS sale price increased by 5.14 per cent to $509,576.
“Much of the inventory decline has been driven by product priced below $500,000. While conditions are not as tight as what was seen earlier in the year, with only two months of supply, conditions remain tighter than historical levels,” added CREB.
“We are also seeing divergent trends in the market with conditions continuing to favour the seller in the lower-price ranges and shifting to more balanced conditions in the upper-price ranges. As of October, prices have eased by four per cent relative to the highs reached in May. This is considered a relatively small adjustment when considering price movements in other large cities. It is also important to note that the October benchmark price is still nearly 10 per cent higher than levels reported last year.”
CREB said sales growth in the over $700,000 price range in October was not enough to offset the declines in the lower-price ranges, causing detached sales to ease by over 29 per cent compared to last year.
“Limited supply growth in the lower-price ranges continue to keep conditions exceptionally tight for lower-priced detached homes.
In October, inventory levels for detached homes were under 2,000 units, nearly 35 per cent lower than typical levels reported for the month. Moreover, over 42 per cent of the inventory falls in the upper-price ranges of the market. This is likely creating a situation where pricing trends will vary depending on price range,” said CREB.
“Overall, detached prices did trend down relative to last month and peak levels in May but remain nearly 12 per cent higher than levels reported last October. The strongest year-over-year price gains have occurred in the North and South East districts.”
(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)