It was a tough year for Calgary’s resale housing market and 2018 closed with December basically mirroring what transpired throughout the year – lower demand for houses, increased supply of houses for sale, and downward pressure on prices.
“It really was a year where we saw weaker demand activity and persistent oversupply and that’s really where we saw some of the price declines,” said Ann-Marie Lurie, chief economist with the Calgary Real Estate Board.
“We had continued weakness in our overall economy. The job market has not performed as expected and we had higher lending rates combined with more stringent conditions. All of that has kind of weighed on our market last year.”
What was different in 2018 from 2017 as that year also was challenged with economic headwinds?
“Really the difference is that we’ve had more (interest) rate hikes since 2017 and we had more stringent conditions. That’s really where the change came. It weighed on the market. And that really started in January (2018) – and nothing to offset those changes. And that’s been some of the challenge we’ve seen,” said Lurie.
According to the board’s MLS statistics, sales in 2018 were nearly 20 per cent below long-term averages.
Here are what the December stats showed:
- MLS sales of 794 were down 21.31 per cent from December 2017;
- Dollar volume of sales fell by 22.40 per cent year-over-year to $354.9 million;
- New listings were down 14.25 per cent to 1,047;
- Inventory of homes for sale at the end of the month rose by 13.47 per cent to 4,904;
- Months of supply that it would take to sell all homes listed for sale given the current demand was up a whopping 44.19 per cent to 6.18 months;
- The benchmark price – which is described as a typical home in the market – dropped by 3.42 per cent to $418,500;
- The median price was down 2.44 per cent to $400,000; and
- The average sale price decreased by 1.38 per cent to $446,963.
Here are what the overall 2018 stats showed:
- Total MLS sales of 16,144 were off by 14.51 per cent from 2017;
- Total dollar volume of sales dropped by 15.59 per cent to $7.7 billion;
- New listings of 34,608 were up 1.40 per cent;
- Months of supply rose by 43.13 per cent to 5.22 months;
- The benchmark price declined by 1.52 per cent to $431,375;
- The median price decreased by 2.33 per cent to $420,000; and
- The average sale price dipped by 1.26 per cent to $477,963.
CREB said the inventory level at the end of December was 30 per cent above typical levels for the month.
Price declines occurred across all product types and have caused citywide figures to remain over nine per cent below the monthly highs recorded in 2014, added CREB.
“Both buyers and sellers faced adjustments in expectations this year. Sellers had to compete with more choice in the resale market, but also the new-home market,” said Tom Westcott, CREB’s President. “With less people looking for a home, it became a choice between delaying when to sell or adjusting the sale price. However, buyers looking for more affordable product did not find the same price adjustments that existed in some of the higher price ranges.”
More information on the 2018 housing market will be released at CREB’s 2019 Forecast Conference & Tradeshow (www.crebforecast.com) on January 30.
“We’re not really seeing a lot of changes occurring this year. We’re going to continue to struggle to see some improvements in our employment market and that’s going to weigh on our market as well as we go through this year,” said Lurie. “No drastic changes are expected to happen. A lot of those struggles that existed last year will continue this year.”