December Home Sales Down 8%, Ending a Down Year for Regina Real Estate

Gord Archilbald, CEO of the Association of Regina Realtors, says 2015 was a down year for the Regina real estate market, with the lowest home sales since 2008 and lowest prices in three years. But Archibald says Regina's modest market correction was nowhere near the double-digit declines seen in Alberta markets, like Calgary.

An eight per cent decrease in home sales in December capped a down year in the Regina real estate market in 2015, which saw the lowest average prices in three years and the lowest number of homes sold in seven years, according to the Association of Regina Realtors.

But Regina’s real estate market is weathering the storm of plunging oil prices much better than, say, Calgary, which saw a 24 per cent decline in sales last year, said Gord Archibald, CEO of the association.

“Even though the year was off, if you put it in the broader context of what’s happening in Alberta, as an example, it’s not anywhere close to that,” Archibald said in an interview Tuesday.   

Overall, the number of sales reported through the Regina and area multiple listing service (MLS) in 2015 was down seven per cent from 2014, as were average selling prices, the association said in its December report released Tuesday. During the year, 3,392 homes were sold in the Regina area, including bedroom communities, the lowest number of sales for the MLS system since 2008, the association said. 

As was the case in 2014, the number of active listings was at or near historical highs during the year, which also had a downward effect on prices, the association said. At year-end, 957 homes were listed on the MLS system in the city, up two per cent from 941 last year, and up 26 per cent from 705 in 2013. Supply peaked at 1,499 listings in June and had been on a steady decline since then.

For the year, the average selling price in the city was $318,548, down three per cent from $326,747 in 2014. Based on the MLS home price index (HPI) — a more accurate measure of housing price trends based on four benchmark housing types — the composite residential price fell 4.0 per cent from last year and 7.7 per cent from three years ago. 

Total sales volume of $1.05 billion in the Regina area was down eight per cent from $1.15 billion. For December, 177 sales posted in the Regina area down from 192 in 2014. Sales dollar volume was $49.6 million, down eight per cent over $58.4 million last year. 

Archibald said the slump in sales and prices in 2015 must be viewed in the context of the new real estate market, which developed during the recent economic boom. “The market changed in 2007,” with slow or no-growth in prices and sales for 20 or 30 years previous, followed by a dramatic jump in prices and sales in 2007-08, which slowed to a steady increase to 2013, and modest declines since then, he said.    

“This is the second-lowest year (for sales) since 2007, but it’s still well above pre-2007 levels,” Archibald said. “We had between 2,500 and 3,000 sales (a year) on the MLS for almost 30 years. This (past) year it’s about 3,400, so it’s still well above that earlier range.” On the other hand, it’s well below the 3,900- 4,000 sales per year pace of recent years.

Archibald attributed the lower home sales and prices to two factors: supply and demand. “On the supply side, we really started to see a build-up of inventory in mid-2013, and continued into 2014 and 2015. So we’ve got a lot of supply in the market,” including unsold new homes, he said.

“On the demand side, the lower levels of growth (in population and employment) in 2015 tempered demand for housing. So you put the two together, supply and demand —  just like in Economics 101 — slowed the market down,” Archibald said.

“Going into 2016, most economic forecasts for the area remain modest at best. Unless there is an unexpected spike in economic and job growth, levels this will continue to temper demand compared to recent years. Supply levels will likely continue at elevated levels as well, at least for the first quarter of the year.”

Jenni Bast

Jenni Bast

CENTURY 21 Dome Realty Inc.
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