Momentum building in resale homes market
Sales in Calgary’s resale housing market began 2020 ahead of 2019, recording 863 sales compared to 801 in January 2019.
In February, the spread widened significantly, 1,197 sales this year, up from 973 last year.
Early in March the 2020 numbers were much higher, year over year. Then came March 19 when the city went on lockdown and sales nosedived.
Sales in April reached only 573 homes, down from 1,544 in April 2019.
May’s number (1,080 sales) was much higher than April, but also much lower than the year before.
June’s numbers are in and they show some momentum has returned.
There were 1,747 sales last month compared to 1,775 in June last year.
“This represents a significant improvement compared to the past several months where yearover-year declines exceeded 40 per cent,” says Ann-marie Lurie, chief economist with the Calgary Real Estate Board. “Caution remains necessary as monthly sales are nearly two per cent lower than activity recorded last year.
“Recent price declines, easing mortgage rates and early easing of social restrictions are likely contributing to the better-than-expected sales this month.”
Even though new listings increased by six per cent in June, sales activity was high enough to cause the months of supply to dip below four months for the first time since May 2019, says Lurie.
“If this trend continues, it should help to ease the downward pressure on prices,” she says. “Residential benchmark prices are comparable to last month, but remain nearly three per cent lower than last year’s levels.”
June’s benchmark was $411,300, down slightly from $411,600 in May.
Jesse Davies, founder, realtor with the Jesse Davies Team at Century 21 Elevate Real Estate, was confident there would be a market turnaround.
“I was optimistic that as the phased relaunch progressed there was definitely going to be a rush to market, due to pent-up demand and very low interest rates, coupled with buyers and sellers becoming more comfortable with certain measures in place to allow showings and entering someone else’s home,” Davies says. ”Plus, the changes made by CMHC to debt ratios and minimum credit scores, effective as of July 1, have been a driving force between the surge in June sales when comparing with May.”
The ratio of sales to listings in June prevented large month-over-month price declines, says Davies.
“The lack of inventory has helped prices remain stable, which is one thing I knew was going to be the key indicator of how the summer market would unfold,” he says.
“The overall sentiment in the market is cautious, as buyers and sellers try to forecast the ramifications this pandemic will have on unemployment levels along with a number of other micro and macro ramifications of the economy.”