House sales ebb in November as supply trends downward
Call it a mixed bag.
Home sales fell slightly across the city last month compared with November the year before, recent Calgary Real Estate Board data show.
The roughly one per cent decline bucks a four-month streak of year over year monthly sales increases.
But the data also show improvement, says Ann-marie Lurie, CREB’S chief economist.
“Listings continue to come down, and inventories are trending down, all of which is good.”
New listings fell 3.45 per cent year over year for November, and inventory was down more than 10 per cent. As well, months of supply was down by nearly 10 per cent.
“But it will take time before we see more stability in pricing,” she says.
The benchmark price for the city fell to $419,000 in November compared with $429,000 for the same month last year, consistent with the trend for first 10 months of 2019. Although the benchmark price decreased by 2.31 per cent, the median price did rise year over year by 0.85 per cent in November. But Lurie notes this metric a less important number than the benchmark, which excludes the outliers (highest and lowest priced homes) to provide a more accurate reflection of prices in Calgary.
“Yet even with respect to the median prices, on a year to date basis, they’re still down,” she says referring to a drop of 2.84 per cent ending last month, compared with the same span in 2018.
As for sales, the pullback in November was “driven by the apartment” segment falling 21 per cent, Lurie explains.
Despite resales falling overall, single-family detached home sales rose more than four per cent and attached segment moved up by almost four per cent, compared with November 2018. Lurie notes the attached segment has been the standout performer this year.
“It has really outperformed expectations,” she says. “That sector has grown by six per cent for sales on a year to date basis.”
Sales growth is due to growing demand for affordable housing options, Lurie adds. Townhomes are a natural fit in this respect — the middle ground between apartment condominiums and single-detached homes.
Despite the segment’s strength, the resale market is still struggling with oversupply across all segments, especially by historical measures.
Even though months of supply were down last month compared with the same month last year (5.58 versus 5.05 months), the figure remains a far cry from the peak in 2014 when supply was about two months. “So we’re still in buyers’ market conditions,” Lurie says, adding the lower priced options are generally faring better than homes at $500,000 and over.
Of the 1,160 sales in November, more than 80 per cent occurred in the under $500,000 segment.
Outlying areas — Airdrie, Cochrane and Okotoks — experienced similar trends in November, she says.
Airdrie, for instance, saw improving sales activity and falling listings. But like other areas in and around Calgary, economic uncertainty weighs heavily on the market. Lurie says the good news is further bumps in the economy are less likely to affect the market dramatically as buyers have already grown used to conditions.
“The market has been continuously and slowly adjusting,” Lurie says. “It’s certainly not a quick recovery, but at least we’re starting to see things level out near the bottom.”
It will take time before we see more stability in pricing. ANN-MARIE LURIE, CREB’S chief economist