Sales decline by two per cent from last year amidst COVID-19 pandemic

After three months where COVID-19 weighed heavily on the housing market, sales activity in June continued to trend up from the previous month, totalling 1,747 units.

Caution remains necessary, as monthly sales are nearly two per cent lower than activity recorded last year. However, this represents a significant improvement compared to the past several months, where year-over-year declines exceeded 40 per cent.

“Recent price declines, easing mortgage rates and early easing of social restrictions are likely contributing to the better-than-expected sales this month,” said CREB® chief economist Ann-Marie Lurie.

“However, the market remains far from normal. Challenges, such as double-digit unemployment rates, will continue to weigh on the market for months to come.”

New listings in June totalled 3,335 units, a six per cent increase over last year. The recent rise in new listings caused inventories to trend up, but they remain well below last year’s levels.

Despite some recent monthly gains in supply, sales activity was high enough to cause the months of supply to dip below four months for the first time since May 2019. If this trend continues, it should help to ease the downward pressure on prices.

Residential benchmark prices are comparable to last month, but they remain nearly three per cent lower than last year’s levels.

 

HOUSING MARKET FACTS

Detached

  • Sales activity in June totalled 1,092 units. This is an improvement over the past few months and only slightly lower than last year’s levels.
  • Despite citywide declines, year-over-year sales activity improved in the City Centre, North East, North, South East and East districts.
  • June also saw an increase in new listings, which is causing some monthly gains in inventory. However, increased sales offset the rise in new listings, causing the months of supply to trend toward more balanced conditions.
  • Detached benchmark prices remained relatively stable compared to last month but were two per cent lower than last year’s levels. Year-over-year price declines were recorded across most districts, with the largest declines in the North West, North East and City Centre districts.

Apartment

  • Apartment sales totalled 227 units in June. This is an improvement from the 136 units last month, but it is still nearly 13 per cent lower than last year’s levels and over 30 per cent lower than longer-term averages.
  • New listings rose compared to last month and last year. This did translate into some monthly inventory gains, but overall inventory levels remain lower than last year’s levels.
  • The months of supply has come down from the high levels recorded over the past few months.
  • Benchmark prices continued to trend down this month, totalling $240,900. This is a year-over-year decline of nearly four per cent.
  • The resale apartment sector continues to be one of the hardest hit in terms of relative declines in both sales and prices.

Attached

  • The attached sector has faced the smallest impact from the pandemic. June sales were nearly three per cent higher than last year’s levels and remain comparable to longer-term averages. The attached sector has generally benefited from its status as a more affordable alternative to the detached sector.
  • Like the detached sector, the attached sector saw new listings rise compared to both last year and last month. However, the months of supply trended toward more balanced conditions and improved over last year’s levels.
  • Benchmark prices remained relatively stable compared to the previous month, but fell by nearly four per cent compared to last year. The higher price decline in this sector could be a contributing factor to the improving sales activity.

 

REGIONAL MARKET FACTS

Airdrie

  • Following declines over the past three months, June sales rose above last year’s levels. While the monthly gain was significant, it was not enough to offset previous pullback, as year-to-date sales remained nearly eight per cent below last year’s levels.
  • Airdrie also saw new listings rise, but inventory levels remain well below last year’s levels. The months of supply dropped below three months and is lower than pre-COVID-19 levels. If the supply/demand balance stays in this range, we could start to see some of the downward price pressure ease.
  • Airdrie’s benchmark price was $327,400 in June. This is down compared to the previous month and over two per cent lower than last year’s levels. Year-to-date prices remain just below last year’s levels.

Cochrane

  • Sales in Cochrane this month improved over last year’s levels. At the same time new listings also rose, causing some growth in inventory levels. However, the improvement in sales outpaced the gains in inventory, causing the months of supply to trend down.
  • Supply/demand balances are improving, but it takes time before this is reflected in prices.   In June, the benchmark price was $394,900. This is slightly lower than last month and nearly four per cent lower than last year. It will likely take several more months of more balanced conditions before seeing any impact on home prices.

Okotoks

  • June sales remained relatively stable compared to last year’s levels. However, with steep declines in April and May, year-to-date sales remain well below both last year’s levels and longer-term trends.
  • Recent gains in new listings caused some monthly gains in inventory levels. The monthly gain in inventory was not enough to offset the monthly increase in sales, causing the months of supply to trend down to three months in June.
  • Benchmark prices were falling prior to the COVID-19 pandemic, but the pace of decline increased during the past several months. In June, benchmark prices remained relatively stable compared to last month, but they remain over four per cent lower than last year’s levels.

-CREB

Weekly Showing Report

The month of May brought with it consistently increasing showing activity across the Province.  In the past week, the showing activity has risen to within 12.7% of the showings we experienced during the same time period last year.
The showing activity for CIR’s listings also experienced increased activity in May, ending the month with over 5,673 showings which was an increase of 3,384 showings over April. The activity has tapered off in the last week of the month ending our 7 week streak of increased showing activity week over week. We anticipate showing activity to remain fairly consistent in the coming weeks as the Province continues to open back up.
-CIR Realty
Weekly showing report June 5
Showing Time June 5

Media release: COVID-19’s impact on Calgary housing market continues

Housing market activity in May remained slow, but sales exceeded the lows from April, which saw less than 600 sales in Calgary.

May sales totalled 1,080 units, a 44 per cent decline from last year’s figures.

“The initial shock of COVID-19 and social distancing measure is starting to ease. This is bringing some buyers and sellers back to the market. However, this market continues to remain far from normal and prices are trending down,” said CREB® chief economist Ann-Marie Lurie.

“Activity has also shifted toward more affordable product, which is likely causing differing trends depending on product type and price range.”

Sales are down in all price ranges, but a greater share of sales are priced below $500,000.

In the higher price ranges the drop in inventory has not been enough compared to the drop in sales. Additionally, the months of supply is far higher than the already elevated levels seen during the past five years.

The shift in sales toward lower-priced product is contributing to steep average price declines in the Calgary market.

Benchmark pricing, which reflects comparisons of the same type of home, has eased by over two per cent compared to last year and 0.4 per cent compared to last month. This does not come as a surprise as the market continues to struggle with more supply than demand.

COVID-19 and social distancing measures have contributed to rising unemployment rates and job losses throughout many economic sectors. This is weighing on consumer confidence and the housing market. Some of this job loss is temporary, but the energy sector remains the largest concern.

Significant job loss throughout the typically higher-paid professional and technical services sector points to a longer adjustment period in the housing market, particularly in the higher end of the market.

 

HOUSING MARKET FACTS

Detached

  • Detached sales eased across the city, with the largest declines occurring in the West district.
  • May sales totalled 670 units. This is a 43 per cent decline over the previous year.
  • The decline was met with lower inventory levels. However, it was not enough to change the oversupply situation. Citywide months of supply remained above four months.
  • For the higher-priced districts – the West and City Centre – the months of supply rose to seven months.
  • Detached home prices trended down in May compared to the previous month and remained nearly two per cent below last year’s levels. Declines varied across the city, with the highest price declines occurring in the City Centre, West, North West and North East districts.

Apartment

  • Apartment sales totalled 137 units in May, an improvement from the 95 units last month. However, this is still nearly 60 per cent below last year’s levels. The pullback in inventory was not enough to offset the slower sales, and the months of supply jumped to 10 months.
  • The benchmark price continued to fall and is now more than two per cent lower than last year’s levels. The average and median prices fell at a significant rate. This is because a large share of the sales occurred in the under-$200,000 price range.
  • Benchmark prices eased across all districts, but the year-over-year decline was the highest in the North East district, with declines of over five per cent.

Attached

  • Mirroring the trend from other property types, sales for attached product slowed by 35 per cent compared to last year for a total of 273 units. Inventory levels eased to 1,503 units and months of supply totalled 5.5 months. The months of supply has eased from the levels recorded last month, but it remains elevated relative to historical levels for this time of year.
  • The benchmark price trended down for attached product, declining by nearly one per cent over the previous month and nearly four per cent compared to the previous year.

 

REGIONAL MARKET FACTS

Airdrie

  • Sales in Airdrie totalled 99 units in May. Activity has slowed compared to previous years, but the decline has not been as steep as what has been recorded in Calgary. The region has also seen a similar decline in new listings and inventory levels. This has helped push the months of supply back to four months, which is similar to the levels recorded prior to the COVID-19 outbreak.
  • Benchmark prices have eased slightly compared to last month and are relatively stable compared to last year. However, there has been a notable decline in both the average and median prices. The decline in average and median prices is mostly related to the significant shift in activity by price range, as sales continued to improve for product priced below $300,000.

Cochrane

  • Sales in Cochrane have slowed, but the pullback in new listings has outpaced the easing sales. This is causing inventories to fall and lowering the months of supply to under five months, a decline of 9 per cent compared to last year.
  • However, the impact of previous months oversupply has weighed on benchmark prices, which have eased by two per cent compared to last year. However, unlike other areas, the average and median prices have been rising, as sales in the $400,000 – $499,999 range remained stable compared to last year and represent a larger share of overall sales compared to last year.

Okotoks

  • While improving slightly compared to last month, Okotoks sales have remained relatively weak in May. At the same time, inventory decline has helped offset the slower sales, leaving the months of supply at four months.
  • The benchmark price trended down for the third month in a row and year-to-date levels are now two per cent lower than last year.

-CREB

Weekly Showing Report

The showing activity has started to taper but CIR’s listing activity is still up slightly week over week for the sixth straight week. This has also translated over to increased sales volume, and while we are still quite a bit lower year over year, we are edging closer to more normal numbers expected for this time of year. This week’s greatest uptick was in the move up markets, as well as the entry level price points continue to show activity. The homes that are receiving showing requests, are properly priced based on the condition and area that they are in. It is vital to understand that the most compelling properties are the ones that are receiving the most activity, which will likely remain to be the case until inventory levels return to more balanced conditions.
This showing activity has been mirrored across the Province according to the Showing Time data seen below.  The Provincial showing data is showing that we are -31.5% lower than the same time last year, and -26.2% down from the peak of showings that we experienced in 2020. The one thing to be aware of when looking at year over year Provincial showing numbers from Showing Time is that their system has expanded to different boards this year so the numbers may be slightly inflated as a result, but we have not been able to confirm if this has been adjusted for.
-CIR Realty
Weekly showing report May 18
Showing Time May 18

Five tips for successful home staging

In a competitive housing market, if you want to sell your home faster and get your asking price, a degree of home staging is a must.

“In my opinion, staging is mandatory,” said Robyn Moser, a REALTOR® and team lead with Robyn Moser & Associates, members of RE/MAX Realty Professionals.

“We’ve actually studied the difference staging a home can make and the result was that staging, on average, was worth another $3,000 to $5,000 in the selling price.”

Staging can encompass a wide variety of actions, she says, from a few easy tricks to bringing in new furniture or even a professional home stager who will provide their own furnishings.

“You want to have just enough furniture so that people can see what it’s like furnished, but not cluttered or with too many personal items on display,” said Moser.

“Staged actually sells better than empty, so for some people, it might even be worth it to buy some inexpensive furniture on Kijiji and then resell it afterwards.”

She says the investment of a few hundred dollars up front could be well worth it when the home sells.

“YOU WANT TO HAVE JUST ENOUGH FURNITURE SO THAT PEOPLE CAN SEE WHAT IT’S LIKE FURNISHED, BUT NOT CLUTTERED OR WITH TOO MANY PERSONAL ITEMS ON DISPLAY.” – ROBYN MOSER, RE/MAX REALTY PROFESSIONALS

It’s OK to leave some family photos out, she adds, but not so many that it comes off as cluttered.

“People still want to buy from real people,” said Moser. “They want to know that real people with real lives lived there.”

She recommends “hiding” all pet items, religious items and things like ashtrays that might have a subconscious impact on potential buyers who don’t subscribe to those lifestyles.

In addition to the common-sense moves mentioned above, Moser offers the following five tips for successful staging:

  • “Use all white sheets, towels, bedspreads and shower curtains. Nothing says ‘clean’ like white.”
  • “Paint has an 80 to 100 per cent return, so freshen it up if you can. Get rid of bold colours and try to keep things neutral.”
  • “Plug in an apple-cinnamon Glade air freshener and turn all your lights on before showings. Try to engage as many of the buyers’ senses as possible.”
  • “Turn the heat up, so it’s a little warmer than usual. You want people to be comfortable, not cold – especially in winter.”
  • “Have some soft music playing. Spotify even has an ‘Open House’ channel.”

-CREB

April 2020: Calgary real estate market feeling impact of COVID-19

After the first full month with social distancing measures in place, the housing market is adjusting to the effects of COVID-19.

April sales hit 573 units, a decline of 63 per cent over last year.

“The decline in home sales does not come as a surprise. The combined impact of COVID-19 and the situation in the energy sector is causing housing demand to fall,” said CREB® chief economist Ann-Marie Lurie.

“Demand is also falling faster than supply. This is keeping the market in buyers’ territory and weighing on prices.”

Sales activity eased across all price ranges, but the largest declines were for homes priced above $600,000.

“THE COMBINED IMPACT OF COVID-19 AND THE SITUATION IN THE ENERGY SECTOR IS CAUSING HOUSING DEMAND TO FALL.” – ANN-MARIE LURIE, CREB® CHIEF ECONOMIST

With a greater share of the sales occurring in the lower price ranges, the average price decline was more than eight per cent. Prices for the average home are also declining, reflected by the benchmark price, which fell by nearly two per cent compared to last year.

New listings this month totalled 1,425 units, a decline of 54 per cent compared to last year. Inventories also declined, but with 5,565 units available, they remained high enough to push the months of supply above nine months.

The economic impact of the situation is significant and early indications point toward more job losses and higher unemployment rates. Several government incentives will help cushion the blow, but challenges in the housing market are expected to persist throughout this year.

HOUSING MARKET FACTS

Detached

  • Detached sales eased by 63 per cent this month compared to last year, with the largest decline in the West district.
  • Slower demand was also met with easing supply, as new listings declined by 57 per cent. Overall, inventories eased by 25 per cent compared to last year. Despite the decline in inventory, the months of supply rose to more than eight months.
  • The detached benchmark price eased by one per cent over last year, totalling $479,100. Prices managed to remain flat in both the South and South East districts. The highest price decline was in the City Centre, with a drop of more than three per cent.

Apartment

  • Apartment sales slowed to 95 units. This is a 62 per cent decline over last year. New listings also slowed, but it was not enough to support a larger decline in inventory levels, which only eased by 13 per cent compared to last year. With 1,349 units in inventory, the months of supply rose to 14 months.
  • Condominium prices were falling before recent developments in the market and the pace of decline remained relatively unchanged at more than two per cent compared to last year. Since the first energy crisis in 2014, the citywide apartment benchmark price has declined by nearly 19 per cent.
  • Year-over-year prices have eased across almost all districts, but the South East district saw the largest year-over-year decline this month at nearly six per cent.

Attached

  • Semi-detached and row properties recorded a significant drop in sales and new listings, causing inventories to decline by nearly 20 per cent. However, with a combined inventory of 1,441 units compared to just 138 sales, the months of supply rose to over 10 months.
  • Semi-detached prices eased across all districts for a citywide year-over-year decline of nearly three per cent. The City Centre recorded the largest year-over-year decline at four per cent.
  • Row priced declined in all areas except the East district. Citywide row prices declined by more than two per cent for a total of $278,300.

REGIONAL MARKET FACTS

Airdrie

  • Sales in Airdrie slowed to 60 units in April. This decline in sales was met with a similar decline in new listings, which totalled 107 units. This helped reduce inventory levels, but with 407 units still in inventory, the months of supply rose to nearly seven months.
  • Overall, the benchmark price remains comparable to last year. Average prices have declined, but some of this is due to more homes being sold in lower price ranges, as there was a significant decline in sales for homes priced above $500,000.

Cochrane

  • April sales in Cochrane dropped to 29 units. This is 55 per cent below levels recorded in the previous year. However, new listings also eased. With only 61 new listings in the market, inventories declined to 281 units.
  • Prices were easing before social distancing measures were put in place and April’s benchmark price totalled $398,900. This is nearly two per cent lower than last year. However, both the median and average price rose compared to last year. This is likely due to more homes being sold in higher price ranges, as there were no sales recorded in the lowest price range.

Okotoks

  • Both sales and new listings dropped, with totals of 17 and 44 units, respectively. Inventory remained well below last year’s levels, but weaker demand pushed up the months of supply to nearly 12 months.
  • Prices were trending down from the start of the year, but levels have remained relatively stable compared to the previous year. In April, the benchmark price continued to trend down, totalling $402,300.

-CREB

The Bank of Canada has not changed it’s Prime lending rate

The necessary efforts to contain the COVID-19 pandemic have caused a sudden and deep contraction in economic activity and employment worldwide. In financial markets, this has driven a flight to safety and a sharp repricing of a wide range of assets. It has also pushed down prices for commodities, especially oil. In this environment, the Canadian dollar has depreciated since January, although by less than many other currencies. The sudden halt in global activity will be followed by regional recoveries at different times, depending on the duration and severity of the outbreak in each region. This means that the global economic recovery, when it comes, could be protracted and uneven.
The Canadian economy was in a solid position ahead of the COVID-19 outbreak, but has since been hit by widespread shutdowns and lower oil prices. One early measure of the extent of the damage was an unprecedented drop in employment in March, with more than one million jobs lost across Canada. Many more workers reported shorter hours, and by early April some six million Canadians had applied for the Canada Emergency Response Benefit.
The outlook is too uncertain at this point to provide a complete forecast. However, Bank analysis of alternative scenarios suggests the level of real activity was down 1-3 percent in the first quarter of 2020, and will be 15-30 percent lower in the second quarter than in fourth-quarter 2019. CPI inflation is expected to be close to 0 percent in the second quarter of 2020. This is primarily due to the transitory effects of lower gasoline prices.
The pandemic-driven contraction has prompted decisive policy action to support individuals and businesses and to lay the foundation for economic recovery once containment measures start to ease. Fiscal programs, designed to expand according to the magnitude of the shock, will help individuals and businesses weather this shutdown phase of the pandemic, and support incomes and confidence leading into the recovery. These programs have been complemented by actions taken by other federal agencies and provincial governments.

Weekly Real Estate Showing Report

The showing activity over the past week on CIR’s listings….is up??  We estimate the amount of showings to have declined approximately 80% compared to where we would normally be for April.  While the showings are substantially lower than what would be considered normal for an April market, they have increased 27% week over week with the highest uptick of activity being in the $200,000 – $400,000 price ranges. We could speculate that this activity could be due to investors and first time buyers still making moves in the market.   The sales have continued to lag behind the decreased showing activity as we are currently seeing 50% less sales in the first two weeks in April compared to the same time period in 2019.  While it is too early to tell if we have hit a baseline for showings, we will continue to monitor to keep everyone informed.Weekly Showing Report April 13

CIR Realty