Hey Everyone! Here is an update on Calgary’s re-sale market for the month of August 2020. Learn what statistics help you understand where ar market is today, and layer that with other information, to help you anticipate the market tomorrow.
With Calgary’s unemployment rate at 15%, no real oil recovery since late 2014, oil recently tanking Spring 2020, negative real interest rates, record levels of government debt, liquidity flooding the market at a torrent pace and in the midst of a global pandemic – Calgary’s Real Estate market is hanging in there!
Today’s post is making sense of some recent Calgary Real Estate Board (CREB) data, compared with historical data, to anticipate the road ahead.
Let’s be reminded this data is across the entire City. Real Estate is very local so please consult with me for a trusted Realtor referral who can help you understand the market more locally and relevant to you.
If you’re considering buying or selling, be sure to check in with me to plan your Mortgage approval!
Let’s look at detached and apartment home data in Calgary.
This is the highest data point for August in the last 4 years! What this signifies is less net new home listings entering the market for sale.
This helps reduce overall inventory. In the context of supply and demand economics, all else remaining equal, less supply supports home prices.
Calgary’s detached home absorption rate is less than 3.5 months. This indicates how long it would take to liquidate all inventory for sale.
Detached home sales totaled 992 up from 945 in August 2019. Total detached home inventory is 3,242 down from 3,823 in August 2019. Improvements on both ends of the spectrum!
Should this trend continue, there is continued pricing support for detached homes in Calgary.
Average detached price is trending seasonally higher and is up month over month. Look for a continuation of this trend into the Fall market.
Other data of interest:
Days on market – 2019: 54 days, 2020: 46 days.
Sale to list price ratio – 2019: 96.5%, 2020: 96.75%.
We are seeing a nice steady rise in this data point month over month. Should this continue into the Fall, this will help errode some listing inventory to support home prices.
The absorption rate is trending higher primarily due to sales dropping by 20% year over year. Total inventory is lower from August 2019, but not enough to completely offset a larger drop off in sales.
Apartment median prices continue to trend lower. Buyers continue to have favourable conditions to negotiate price, and they are!
Other data of interest:
Unit sales – 2019: 280, 2020: 224.
List to sale price ratio – 2019: 96.5%, 2020: 96.4%.
Days on market – 2019: 69, 2020: 62.
Considering our economic backdrop, Calgary’s Real Estate market could be in worse shape.
I think the reality of our market is this …a pair of first time home buyers with a family income of $100,000 (before tax) and 5% down payment can purchase a $350,000 entry level home relativley easily. This segment of the market is quite buoyant.
Higher priced homes, that command either higher family incomes OR significantly larger down payments, are facing more challenge.
In either case, ultra low interest rates might be pulling some demand from the market?
I hope this is helpful …
Be sure to connect with me to help plan your Mortgage approval!
Talk soon,
Chad Moore
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