Calgary Real Estate Board (CREB) is at it again with another monthly report on Calgary’s housing market. Here’s what you need to know!
- You need to know what’s happening with prices.
- You need to know what’s happening with new inventory.
- You need to know what’s happening with absorption rate.
Let’s break down Detached Houses & Apartments.
Detached Houses.
Sales To New Listings Ratio:
This ratio combines new inventory on the market, net of expired listings or sold homes. This helps anticipate the amount of new inventory coming on the market for sale.
For context, a sale to new listing ratio of 100% would mean for every listing that entered the market, a listing left the market (expired or sold).
Therefore, percentages less than 100% indicate a building of future listing inventory.
We can see Calgary’s sales to new listing inventory ratio climbing which indicates a seasonal decrease in home inventory. This bodes well for overall price support – when only focusing on the supply side of price economics.
Traditionally, we can anticipate more listing inventory in the Fall season. 2020 is anything but a “traditional” year!
Absorption Ratio:
Calgary’s detached absorption rate has now fully recovered from the spike from COVID. The absorption rate combines sales and total inventory together in an effort to understand how many months it would take to liquidate everything.
For the overall detached housing market, the absorption rate is relatively low year over year. Again, this is supportive of pricing.
Average Price:
Let’s acknowledge that Real Estate is very local. When considering average data, let’s not get too excited one way or the other. However, noting the overall market trend line is somewhat valuable to understand.
Calgary’s market has battled back to a seasonal average. We will likely see a decrease again into the Fall market.
Apartment Data:
Sales To New Listings:
Year over year, this ratio is on the lower bound, but higher as we gain more distance from the economic lock-down. Inventory does continue to rise which continues to favour apartment buyers.
Absorption Rate:
I’m becoming numb to how high Calgary’s apartment absorption rate has been for the past couple of years. This is a sign of a market with more listing inventory than sales, which leaves sellers to compete on lower and lower prices.
One additional data point of interest …the apartment absorption rate in July 2015 was less than 4 months.
Median Price:
Month over month this data point is rising from the depths of the lock-down, but still lower year over year. In a small sample size of clients, my apartment buyers are consistently offering well below list price in strong positions of negotiation.
Conclusion:
Here is a quote from Ann-Marie Laurie, chief economist for Calgary Real Estate Board, “We are still facing record high unemployment rates, significant government aid and uncertainty throughout the business community and this will continue in the coming months”.
Also from the CREB monthly statistics snapshot is this …”COVID-19 shutdowns occurred over the traditionally busiest quarter for Real Estate sales. Some of the recent gains reflect activity that would have occurred in those months shifting into July.”
I’ve mentioned this before in past blog posts, and still believe this to be true. Calgary’s housing market, and economy, are still a mixture of opportunity and difficulty.
Thank you for reading and I hope to speak with you soon!
Chad Moore
