The showing activity increases have had a bit of a plateau showing a slight increase over the last week. The markets that are being shown have shifted a bit as we are seeing a decline in showings in the starter markets, specifically the markets between $200,000 – $300,000. However there was a large improvement in the $400,000 – $500,000 range (move up market). The other price ranges have remained relatively stable while the sales have continued to climb. Year over year, CIR’s sales numbers are up 38.1% in the first two weeks of February compared to the same time period last year. That has led to an increase of 24.6% in sales year to date compared to 2019.
With the announcement yesterday that the Government is relaxing the rate
that people will have to qualify under the stress test, it should help to continue the momentum in the starter markets. As we have been discussing, keeping the starter markets going will be pertinent to the higher price points moving as well.
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Calgary February Review
With the first month of 2020 behind us, we are off to a good start for the year. Comparing the numbers of January 2020 to January 2019, we saw an increase in sales by 5.43% across the Province, a decline in new listings coming on to the market, and an overall decrease of listing inventory which has all led to lower Months of Inventory through most of the Regions in Alberta.
While lower Months of Inventory will lead to more balanced markets and stabilized pricing, we have noticed that the properties being sold have had an increased average price of 4% in Alberta to $375,649 from $361,131 in January 2019. Since the current Months of Inventory, and the number of sales in January do not support a market where we would see significant movement in price, it is primarily due to movement in the higher price ranges that is having this effect on pricing. The 6.3% increase in the average price for sales in Edmonton, and a 4.8% increase in the average price for sales in Red Deer had a big part in that jump upwards for the Province.
The sales activity in the higher price points is consistent with the showing activity that we have had for CIR’s listings. The month over month showings have continued to rise and we anticipate this to continue into Spring. The showing activity that has had the largest gains, is in the $500,000 to $800,000 price points, the move up markets. We have been anticipating the move up markets to start performing better as the lower price points had picked up activity in 2019.
The activity that we are seeing is closer to normal for the ten year averages, but is still a bit lower than average. It appears that people are adjusting expectations to the “new normal”, and confidence is continuing to return to the markets. Since Alberta’s economy continues to outperform most of Canada for weekly earnings and opportunity, we are seeing the net migration into the Province continuing to increase. This has resulted in the rental markets continue to tighten, which will end up driving buyers and investors into the markets as well as help our move up markets as the first time buyers enter the market. We are also watching the unemployment rate which was seeing a drop through the Fall months of 2019, but has since started rising again in December and January. There appears to be a lag of six months in the Real Estate markets to the employment markets, so we will continue to monitor the migration and employment trends.