Market moves toward balanced conditions
Calgary housing prices change direction in May
For the first time since December 2014, Calgary’s residential unadjusted benchmark prices improved over the previous month. Within the city of Calgary, housing prices totaled $454,100 in May, a monthly and year-over-year increase of 0.55 and 0.96 per cent.
For the third month in the row, new listings have eased compared to last year, helping push the market toward more balanced conditions, despite the current environment of slower sales activity. This has helped prevent further declines in the unadjusted benchmark price.
New listings in the city of Calgary totaled 3,161 units in May, a 27 per cent decrease over last year. Meanwhile, total inventory levels for the month were 5,342 units, 16 per cent higher than last year, but eight per cent lower than May levels recorded over the past five years and three per cent lower than average levels over the past 10 years.
Two measures of balance are the months of supply and the sales to new listings ratio. In May, the months of supply decreased to 2.43, while the sales to new listings ratio was 69 per cent, both within the norms for balanced conditions.
Back in January, higher inventory levels relative to sales activity caused months of supply to rise above five months while some challenges continue to exist for sellers, depending on the property type, price and location, the decline in the months of supply points toward more stability for both buyers and sellers.
Detached sales activity in May totaled 1,366 units, with the majority of transactions occurring below $500,000. While conditions are not as tight as last year’s market conditions, which favoured the seller, over the first five months of this year activity in this price range has remained relatively balanced.
This segment of the detached market continues to have a good amount of consumer activity, as many have taken advantage of the improved selection compared to last year, while some have waited for steeper price declines, to this point it just hasn’t happened across all areas of the market. This is partly related to activity in the under $500,000 segment.
The apartment sector continues to remain the only sector where prices have contracted relative to last year’s figures.
While the resale market has recorded an easing of upward inventory pressures, the new home sector has started to record some gains in inventory. Current new home inventories remain relatively low. However, the overall impact on Calgary’s housing prices will ultimately depend on the duration of the economic slowdown and the amount of inventory build-up in the new home sector.