Chad Moore Calgary Mortgage Broker

Let’s Look At Several Key Real Estate Statistics To Get A Sense Of Where Today’s Home Prices Are And Where They Might Be Trending.

Several Calgary Real Estate Board (CREB) data points help me understand our housing market, and the direction prices might be trending:

1. Sales to new listings ratio.
2. Absorption rate.
3. Average/Median price.

Let’s zoom in on this data, and map it with other macroeconomic data, to grasp an overall picture of our Real Estate market.

Let’s all agree this data is a large aggregate. Real Estate is local, even some say hyper local. The quadrant, area, property type, price range etc all play a factor into value estimation. I recommend connecting with a referred full time Realtor for additional detailed information.

Calgary Detached Housing:

Sales to new listings rato:

This ratio combines properties exiting the market (sales or expired listings) with new listing inventory. This helps anticipate the build up or depletion of inventory in the near future.

Increasing percentages indicate less near term inventory coming onto the market for sale. Lower percentages indicate the opposite.

We can see a strong seasonal upward month-over-month (m/m) and year-over-year (y/y) trend in data for September 2020. Anticipate less Real Estate inventory for sale this Fall, which helps support pricing.

Absorption rate:

The absorption rate combines total inventory for sale and sales volume to see how long (months) it would take to liquidate ALL current inventory.

Higher absorption rates indicate either a combination of lower sales numbers combined with higher inventory. And lower absorption rates are a combination of higher sales numbers and lower inventory.

Lower absorption rates favour home sellers, while higher absorption rates favour buyers.

We can see Calgary’s detached housing absorption rate is at a 5 year low! This is due to sales increasing, up from 851 for September 2019 to 1,052 for September 2020. This is also as a result of total detached home inventory decreasing from 3,730 September 2019 down to 3,077 September 2020.

Lower absorption rates are an indicator of price stability for Calgary’s detached market!

Other numbers of interest …

• List to sale price ratio: 96.54%
• Average days on market: 50

Average price:

Average price is up y/y but slightly down m/m.

When taking Real Estate averages, regardless of the price movement direction, be reminded the data point is an average. That said, Calgary’s average detached home price is flowing according to recent averages.

Let’s see if the stronger sales to new listings ratio and absorption rate support a rise in average prices leading into the Winter?

A further look into the CREB report reveals the sales numbers year-to-date (YTD) per price range category.

Calgary Apartment Home Data:

Sales to new listings ratio:

This ratio took a seasonal dip indicating more apartment inventory coming up for sale. This ratio is certainly off the lows from 2016 and 2017 though.

Absorption rate:

(I can’t help but shake my head at April’s data, still)

Calgary’s apartment absorption rate is down m/m and about the same y/y in line with long term trends. This number is still traditionally high as buyers retain negotiating leverage.

Median price:

Median price is down relative to past years.

• 2019 sales = 244. 2020 sales = 242
• 2019 inventory = 1,621. 2020 inventory = 1,643
• 2019 average days on market = 70. 2020 = 67

Conclusion:

Calgary’s seasonally busy Spring market was completely blown up by the global pandemic and economic/social lock-down. The Summer months showed signs of Real Estate activity with the Fall housing market fully releasing all pent up demand.

What’s interesting is buyer demand is outstripping seller demand which bodes well for price support (in the detached sector).

Other factors helping to propel our Real Estate market are artificially low interest rates, significant economic fiscal/monetary stimulus, and attractive home pricing have placed a floor under our housing market.

Detached home prices are well off their previous cyclical peaks making market entry, for those considering a purchase, quite attractive.

Like entering any market, there are still macroeconomic risks at play worth considering …ending of payment deferral programs, continuation of oil price wars, another economic shutdown (to a lesser degree), loss of income etc.

Let’s all agree, at any point in time I could look forward to good reasons to purchase a home or good reasons to wait and see.

I am noticing home builders raising some prices of detached homes for sale. I think the cost of lumber has increased rather significantly, with other input costs also rising (but to a lesser extent).

I hope this is helpful for you …

Be sure to connect with me if you are planning to purchase a home. I have a database full of people planning their Spring ’21 home purchase.

Talk soon,

Chad Moore
403-809-5447
chad@canadamortgagedirect.com