The segment of Calgary’s housing market with the greatest influence on the overall market is showing signs of pricing stability.
The detached benchmark price totaled $503,400 in September, which is 3.3 per cent below last year, but the second consecutive month at this price level. While overall economic conditions remain soft, for now the detached sector is demonstrating some steadiness in terms of pricing. The decline in demand has caused many to anticipate steeper price declines for detached homes. That hasn’t happened in large part because detached supply levels haven’t climbed as sharply as many expected. There was a limited amount of supply in the overall market when this cycle began, and while levels did rise and remain somewhat elevated, they were well below previous highs. The level of detached new listings also eased compared to last year, helping push down year-over-year inventory levels for the second consecutive month.
Consumers are really starting to come to terms with the current environment. Most sellers have adjusted their expectations at the same time that many buyers are realizing that prices are reacting very differently in different segments of the market. We’re just not seeing the price declines that buyers have been expecting in all segments of the market.
Residential inventory levels totaled 5,877 in September, five per cent higher than last year, due to gains in both the apartment and attached sectors. City-wide months of supply neared four months, but ranged from a low of three months in the detached sector to a high of eight months in the apartment sector.
Sales were equally inconsistent, improving by four percent in the detached market while declining by 23 percent in the apartment sector. Nonetheless, in every category, sales activity year-to-date sales activity has declined over levels recorded last year and remains below long-term averages.
The resale apartment market has recorded large inventory gains and a sharp pull-back in sales. This, combined with additional competition from new builds, is resulting in steeper price adjustments in this sector.