Understand near term home supply changes to help anticipate near term price movements for Calgary detached homes and apartment condos.
There was a palm reader who had a circular kiosk in West Edmonton Mall.
When I was a kid, my family would eat out at Alberts Family Restaurant. This kiosk was just outside the restaurant.
Before and after dinner my brother and I would be playing out in the mall hallways. I use to peek inside this booth, between the cracks of the door, to try and get a glimpse of the palm reader.
How do I say this politely …?? She. Looked. Scary.
I am alway curious to know what a palm reader would say to me. When I drive into my office off Centre Street North, there is a psychic’s office I pass by. Perhaps one day I’ll stop in?
The data below is like palm reading the Calgary Real Estate market (I think more data driven, with less opinion). Looking at this information helps you understand near term price movement direction.
All information from CREB.
Detached Homes:
Sales to new listings:
This data point helps anticipate net new listings coming onto the market for sale.
The amount of new listings coming on to the market for sale influences home supply, influencing home values (assuming demand remains constant).
We’re seeing a seasonal trend upward (indicating less future homes for sale). To encourage home value support, I think we want to see this ratio continue to increase. You’ll note last year, the sales to new listing ratio was drastically lower relative to the past. Should this happen again in 2019, that puts down pressure on values.
Absorption Rate:
The absorption rate let’s us know, in months, how long it would take to liquidate all of the listing inventory at the pace of that particular month’s sales volume.
The absorption rate combines the number of sales, new listings and total listing inventory together as a general market indicator of near term price movement. Higher absorption rates generally equate to down pressure on prices. The opposite is true. Between 4-6 months absorption is a “balanced” market.
Calgary’s detached absorption rate is seasonally decreasing. 2018 saw this seasonal trend diverge from years past. I’m looking for a decrease of Calgary’s absorption rate this Spring to help support prices.
Average Price:
Calgary’s average detached price is seasonally trending higher, up month over month but down year over year.
Remember, this data is for single family detached homes in metro Calgary (excluding surrounding areas). This is for a general pulse on Calgary’s market. Please ask me for a Realtor referral to narrow down the Real Estate information you’re looking at.
Apartment Condo Data:
Sales To New Listings Ratio:
This data point indicates less new listing inventory is headed for the market. This data point is in line with previous years so anticipating about the same price trends in the near term is also reasonable.
Absorption Rate:
The absorption rate is trending down but still above recent years data. I think this primarily speaks to low number of units sold in February (149 units sold, down 24.37% year-over-year).
Median Price:
Median price is sharply trending higher, but seasonally below recent years.
Conclusion:
What do you think Calgary’s Real Estate palms look and feel like? Rough with callus? Or smooth and milky?
I’m looking for a price floor. I’m not necessarily looking for “good news” and our market sky-rockets like previous market cycles. I think those day’s are behind.
Rather, I’m looking for no more “bad news”.
I think a price floor, in and of itself, would be enough to give buyers a bit more confidence to enter the market. I think today’s buyers are entering the market conditioned to long-term equity gains, versus seemingly parabolic value lifts of our past markets.
What are your thoughts?
Talk soon,
Chad Moore
P.S
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