You know what I thought was good about last Friday’s smoke filled air?
Context. Heres’ what I mean …
Calgary will have hazy smoke filled days this Summer. It’s almost becoming the “new normal” for me.
But it won’t be as bad as the ash falling from the sky Friday, May 31st. I couldn’t help but think this was how the Dinosaurs became extinct …the sky might have been full of smoke, the sun was blocked and life perished (maybe that’s an oversimplification?).
So, if there is a bit of haze in the sky during Stampede this year, I won’t bat an eye.
Context.
When looking at Calgary’s Real Estate data I have similar thoughts.
With this in mind, let’s look at May 2019 Real Estate data as an indicator of near term price movements to come.
All data from Calgary’s Real Estate Board (CREB).
Detached Homes:
Sales To New Listings Ratio:
This ratio helps us anticipate near term housing supply. Here’s how …this ratio combines listings leaving the market with homes entering the market.
A decreasing number is an indicator that more new listings are entering the market for sale.
An increasing number indicates less new home listings are entering the market for sale.
If this ratio was 100% that would mean every home that entered the market for sale was balanced with a home that left the market. Cool?
Calgary’s detached sales to new listings ratio is moving in a healthy direction (with context to 2018 data). Last year we could anticipate more and more listings entering the market. This year, there should be less supply.
Looking at longer term data trends, this number is lower than “normal”.
Absorption Rate:
This number tells us how long, in months, it would take to liquidate ALL of Calgary’s detached housing inventory at the pace of this month’s sales data.
This gives us an indication of new listing inventory, total listing inventory and the pace of sales.
A increasing or higher absorption rate indicates slower sales numbers, or higher inventory (usually both).
A decreasing or lower absorption rate indicates higher sales volume, or lower inventory (usually both).
This can help us anticipate near term price movements.
Calgary’s absorption rate in May 2019 is again showing healthy signs relative to 2018 data due to total inventory being down 12% and sales volume up 11.6%. With this context, things are improving.
However, compared to longer-term data, Calgary’s absorption rate is still high. This is a move toward more balance and away from “ash falling from the sky extinction” :-).
Average Price:
Calgary’s average price is hanging in there!
Real talk. Prices are down from past peaks. I don’t think this is shocking news to anyone.
I do think it’s nice to have a general sense of the overall market. Please understand that Real Estate is very local.
Each quadrant, area, neighbourhood, property style, and price point effect the market.
Let me know if you’re planning to purchase or sell so you’re connected with top industry professionals. This matters.
Other Interesting CREB Data:
Days on market (how long homes are listed for sale):
May 2018: 40
May 2019: 50
Sales to list price ratio (what percentage are homes selling relative to list price?)
May 2018: 97.3%
May 2019: 96.7%
I think these are both indicators of a “buyers” market with down pressure on pricing.
Apartment Data:
An apartment is a unit within a high-rise or low-rise condominium building with access through an interior hallway.
Sales To New Listings Ratio:
The movement of this ratio is in a healthy direction indicating less future units for sale in the near term.
Calgary apartments saw 315 units sold which is up 11.7% year over year. There was also a significant reduction of new inventory and total inventory -19.4% and -14.1% respectively year over year.
This is an indicator of future price support and market stability. Near term there is still down pressure on apartment prices.
Absorption Rate:
Calgary’s apartment segment is seeing one of the lowest absorption rates since 2015.
Again, this speaks to increased sales and lower total inventory.
Median Price:
Despite the healthy sales to new listings and absorption rate data, median apartment price is the lowest it’s been in the past 5 years.
For context, the volume of apartment sales is relatively low in Calgary so numbers can swing without much rhyme or reason. I do see value in general trend lines though.
Conclusion:
I think there are more and more signs of healthy vitals in Calgary Real Estate – relative to the 2018 Real Estate market.
I think there is still an overall adjustment of home prices as the new reality of Canada’s, Alberta’s and Calgary’s economy continues to take hold.
Here’s a bit more context …This past month I’ve been in touch with 3 buyers that do not live in Calgary but are looking to purchase here.
They live in Vancouver and Toronto. They work regular jobs and are paid about the same income as if they were living here.
However, our home prices are DRASTICALLY lower than their respective cities.
Context.
We have a clean city. Fresh drinking water. Low probability of natural disasters. And friendly people live here. These are good days!!
#bepositive
Thank you in advance for your kind referrals.
Talk soon,
Chad Moore
P.S
I’ve gotten out on my mountain bike once this year and had a couple outdoor workouts with a friend.
There is nothing like the first mountain bike ride of the year …never fails that my a$$ is sooo sore after. Good to have that behind me now!!
What are you up to this Summer. Yes, I read your replies :-).
Talk soon!!
