Chad Moore Calgary Mortgage Broker

How’s the market?

Instead of opinion, let’s look at some key data!!

Let’s chat about Calgary’s Real Estate data for June.  

I think these couple of key data points will help you get a feel for where prices are headed in the near term.   

Detached Home’s In Calgary:

Sales To New Listings Ratio:

This ratio helps anticipate the number of new homes entering the market for sale.  This helps me make sense of supply and demand forces on the market. 

I think a relatively positive increasing sales to new listings ratio trend is continuing in 2019.  Although the June data point is lower than 2015-2017 data, we are above the very low 2018 year.   Let’s celebrate little victories when they happen :-) 

Let’s watch how this data point trends into the Fall and if new inventory continues to be less than 2018.  

New inventory entering the market is lower by 22% year over year. 

Total inventory is lower by 17.5% year over year. 

Absorption Rate:

The absorption rate factors total inventory and total sales volume as a market indicator.  

The 2019 trend of the absorption rate was seasonally decreasing relative to past years, excluding 2018.  

However, a divergence of this decreasing trend occurred this past month.  New detached inventory entering the market is slightly higher month-over-month with about the same sales volume month over month.  Thus, the net result is a increasing absorption rate.  

Calgary’s absorption rate is lower than last year, which was quite high. 

The number of detached home sales is down 9.09% year over year.

Average Sales Price:

Calgary’s average sale price for June 2019 is reporting the lowest level in the last 5 years.  

I’ve added some additional information, from the Calgary Real Estate Board report, for deeper understanding.

Below I can see the the sales distribution of homes in lower price ranges is up year over year.  I am seeing higher priced home sales volume noticeably lower year over year.  This all contributes to Calgary’s overall average price. 

Average detached home price is down 6.19% year over year.  

Apartment Data:

Sales To New Listings:

Calgary’s apartment sales to new listing data fell off a cliff in June.  I thought things were trending nicely as an indication of a release of inventory pressure.  And then June happened.  

As far as I’m concerned, the trend is still higher, but the most recent month, and seasonal trends, are lower leading to more inventory. 

Absorption Rate:

Calgary’s apartment absorption rate jumped on the back of marginally lower inventory year over year, and a even deeper sales decrease.

Total inventory is lower by 4.64% year over year.

Total sales are down 10.27% year over year. 

Median Price:

Median price looks to be marginally lower than the beginning of 2019 and lower relative to past years.

Conclusion:

Supply of housing and apartments continue to contribute to current market pricing.   

The demand side of the Real Estate equation is not much help either.

On average, employees are also earning 1.0% less in April 2019 than March 2019 (from Statistics Canada’s Survey of Employment, Payrolls and Hours) and earning are also down 0.6% from April 2018.

This negative wage growth, without the consideration of inflation, simultaneously suppresses demand for housing.  Another layer to consider is the Mortgage qualifying stress test is asking applicants to qualify at higher interest rates for their homes.  

On the bright side of “demand” – net interprovincial migration to Alberta is up 2,233 people, per quarter, since the beginning of 2018. 

For buyers with good credit, savings for down payment and stable income – notice this opportunity.  

For sellers, I can’t stress the importance of working with a full time Realtor who can help you understand the current market and sell your home.  

Cheers,

Chad Moore