Data show housing on rebound, but with lots of ground to recover
Activity in May perked up over April, when numbers were at historic lows
COVID -19 derailed Edmonton resale homes activity in April, with a 55-per-cent sales decline from April 2019.
However, year-over-year comparisons lost validity in the days of the pandemic panic, says Lowell Martens, a Re/max Real Estate broker and owner.
“I don’t think it’s reasonable to compare 2020 numbers, during COVID-19, with last year’s,” says Martens. “We’ve experienced a blip that no one in the country has really experienced, so no one knew how to deal with it or understand the full impact.
“We must continue to take the right precautions, but as things are reopening, we anticipate changes in the summer.”
A month-over-month comparison of numbers from the Canadian Real Estate Association (CREA) shows Edmonton’s resale market in recovery mode.
Sales: In April, sales were 846 homes. In May, sales were 1,320.
Average price: In April, $355,740. In May, $357,206.
Dollar volume of sales: April’s sales were worth $301 million. In May, that rose to $471.5 million.
New listings: 2,158 new listings came on the market in April. May saw an increase to 3,514. In normal times, an increase this large would probably not be welcomed. But these aren’t normal times and the increase could be an indication sellers are feeling a bit better about the market.
Sales to new listing ratio: In April it was 49.3 per cent. In May, 48 per cent.
“May’s housing numbers are certainly a mixed bag of results. Sales and new listings are both way up month over month but still way down compared to year ago,” says Shaun Cathcart, CREA’S senior economist.
“The big picture is, things are moving in the right direction but still have a long way to go. That said, under the surface those numbers have been steadily rising from mid-april right through the first week of June, so June may end up a similar story. With sales and new listings moving down and now back up in tandem, and overall supply still falling, prices appear to be holding firm at this point.”
A Re/max report predicts further improvements across Canada.
“The Canadian housing market was strong before COVID-19 hit, and despite the tragic impacts of the pandemic, we are optimistic the housing market could be restored much sooner than initially expected,” says Elton Ash, regional executive vice-president, Re/max of Western Canada.
“The housing market is likely to gradually begin its return to sustainable, healthy levels toward the end of 2020.”
Robert Hogue, senior economist at RBC Economics, puts the April to May increases into perspective.
“The jump in home resales last month wasn’t a surprise given the earlier plummet, to a 36-year low in April, had much to do with the unprecedented lockdowns and social distancing orders imposed since mid-march. It was clear the lifting of some of these measures in May would kick the market into gear,” says Hogue.
“Yet the eye-catching month-tomonth gains across the country overstate the rebound. Activity was still 40 per cent to more than 50 per cent below year-ago levels in most major markets.”
June’s numbers will be released by the Realtors Association of Edmonton next week, with a followup from CREA in three weeks.
The housing market is likely to gradually begin its return to sustainable, healthy levels toward the end of 2020.