There were some positive signs in April for Calgary’s struggling resale housing market.
For the first time since January 2018, monthly MLS sales increased on a year-over-year basis and the elevated level of inventory is easing. However, prices continue to come down.
Ann-Marie Lurie, CREB’s chief economist, said demand remains relatively weak but if supply levels continue to adjust it could help reduce the amount of oversupply and eventually support some price stability.
“Sales are still relatively weak. They’ve had a slight increase over last year in April but we have to give some perspective. They’re still well below what is normal for our market and last year’s sales were actually quite weak. We’re still in this sort of weaker demand environment that hasn’t really changed but at least it’s moving in a different direction,” she said.
“It’s better than last year but we’re still at levels we haven’t seen for quite some time . . . The last time it was this low was in 2000.”
Lurie said the city will need to start to see some changes in the employment picture to change the lacklustre demand in the market.
“We just haven’t seen that really. We’re still struggling with employment. Unemployment is still high. We need a change in that or at least some shift in overall economic activity whatever it may be. Something that sends out any form of positive signals out there can also help on a short-term basis but long-term we need to start to see employment growth,” she said.
The number of new listings in April were down 12.32 per cent year-over-year to 3,125 and that reduced the inventory of homes for sale at the end of the month to 7,063 which is down 3.7 per cent from a year ago.
The months of supply, which is how long it would take to sell all the inventory with the current level of demand, was down by 5.75 per cent year-over-year to 4.57 months in April.
“The good news is that supply is starting to adjust and that is a good thing because that will help at least alleviate some of the downward pressure on pricing. We’re still not there yet. We’ve been oversupplied for quite a while. That’s part of the challenge,” explained Lurie.
The supply is falling because the listings are trending downward.
“Because prices have been falling that really starts to impact the amount of new listings that keep coming onto the market . . . And it’s coming off at a pace that is more measured with what the sales are happening. So that’s contributing to some of the fall in inventories,” she said. “Some of the pressures on the new home side have also changed. Some of that newer supply coming from the new product is having less impact on the overall supply as well.”
All ways of measuring prices in the market fell year-over-year in April. The benchmark price – which is considered the typical home in the market – was down 4.74 per cent to $415,900; the median price decreased by 4.76 per cent to $410,000; and the average MLS sale price dropped by 3.69 per cent to $460,474.
Those prices will be impacted by the supply and demand dynamic in the market.
“Prices kind of lag that sort of indicator. So we’ll see as it moves forward because we’re still in an oversupplied market. Our months of supply is still relatively high. The fact that it’s gone down a bit is a good sign as far as returning to more balanced conditions. It’s just we’re not there yet. So prices are still being impacted.”
Here are some of the other key stats from CREB’s monthly MLS report in April:
- Total dollar volume of sales was down 1.59 per cent from a year ago to just over $712.35 million;
- The sales-to-new-listings ratio of 49.5 per cent increased by 7.02 per cent year-over-year;
- The sales-to-list-price ratio of 96.63 per cent was down 0.63 per cent from last year; and
- The average number of days on the market for a property to sell increased by 17.47 per cent going from 47 days in April 2018 to 55 days this April.