When looking at the Showings for CIR’s listings, this past week brought with it another increase in showings with a remarkable uptick of 172 showings for a total of 604 in the $300,000 – $400,000 price range. Perhaps the relaxation with the mortgage stress test combined with news of lowering interest rates sparked more interest in the markets. With the recent news in regards to the Covid-19 virus, the volatility in the stock market, as well as the rapid decline in oil prices, we will see what the next few weeks bring and what that will mean for the Real Estate markets. As of right now, the showings volumes are holding strong coming into Spring
The Real Estate Market has continued to show signs of strength coming out of February and into Spring. With sales across the Province increasing by over 11% compared to last February, that brings the year to date sales slightly above the past five years average activity. This still remains below the longer ten year averages but continues to show signs of stability in most of the markets. While the inventory levels climb coming into the busier Spring markets, the sales have been strong enough to offset it in most markets, allowing the months of inventory to drop which is ideal for price stability.
The hot spots in the Province were in the Lethbridge, Grand Prairie, and Calgary regions. According to the Alberta Real Estate Association, the surge in sales year to date of over 21.6% year over year in Lethbridge has surpassed numbers as far back as 2008! The listing inventory has continued to climb in as well, but it has not kept up the pace to sales, so the months of inventory has been dropping. This is a great sign for the area as we have been concerned about the rising inventory levels in the Lethbridge region, but buyer confidence seems to be strong in the area. The Grand Prairie markets appear to have picked up steam due to the recent downward pressure in prices, whether that area has hit bottom remains to be seen as inventory levels remain quite high. And finally, Calgary where the sales have continued to outpace the new inventory coming onto the market which has led to the largest drop in months of inventory across the Province.
The challenged markets through the first couple of months are the Central Alberta and Medicine Hat areas. The Red Deer area continues to be challenged with a rising unemployment levels. The Medicine Hat markets appear to be more of an over supply issue where the inventory is outpacing the sales activity.
As for CIR, we are seeing the showing activity for CIR’s listings significantly increased in February over January jumping to over 6,200 showings. The high sales activity that we saw in the $300,000 – $400,000 range in February correlates with the above average showings in that range in January. We anticipate the same to happen in the move up markets in the coming months as a result of the higher than average number of showings in that range.
As a company, we have also experienced a significant uptick in sales. While Alberta had an increase of 11% in sales in February, CIR Realty had an uptick of 39% in February. We have been very happy to see that trend continue with an increase of 40% in the first week of March compared to last years numbers. While the numbers in 2019 were less than ideal, the numbers in February and March are the third best in the past decade.
There is a large degree of uncertainty in the world today which could end up slowing things down, but if these trends continue we anticipate a very busy Spring market. The necessity to understand the markets with in the markets continues to be so important in today’s Real Estate Markets. The “new norm” for markets requires an understanding of how to position a home into the marketplace based on the activity occurring in order to get it sold. Having a strategy, pricing the home properly with a compelling price, and keeping the home in ideal condition for the pricing strategy are all key components to a sale in todays markets.
The largest slow downs were in the $300,000 – $600,000 price ranges however the showing activity in these price ranges continue to be above average since we started tracking this information. The most notable changes are the increase in showing activity in the $200,000 – $300,000, and the $600,000 – $700,000 ranges. The upper price ranges remain remarkably consistent for showing activity as well.
City of Calgary, March 2, 2020 –
This month saw a double-digit gain in sales, but last February was one of the slowest levels of activity since the late ’90s.
With the extra day this February, monthly sales total 1,197 units. A combination of these two factors resulted in a 23 per cent improvement over last year, but sales remain well below longer-term trends and consistent with the lower levels reported over the past five years.
“However, this should not diminish the fact that conditions are still improving,” said CREB® chief economist Ann-Marie Lurie.
“Calgary is continuing to see slow reductions in the amount of oversupply in the market, from modest changes in demand and reductions in supply. This needs to occur before we can see more stability in prices.”
The overall unadjusted benchmark price was $416,900 in February. This is similar to last month, but nearly one per cent below last year’s levels. Overall, prices remain nearly 11 per cent below the monthly high recorded in 2014.
HOUSING MARKET FACTS
- After the first two months of the year, detached sales improved by nearly 12 per cent. Improvement did not occur across all districts, as sales continued to ease in the City Centre, North East and North West districts.
- Driven by pullbacks mostly in the south and west districts, new listings declined by one per cent in the city so far this year.
- Improving sales and easing new listings helped reduce inventory levels and reduced months of supply to just below four months in February. This is a significant improvement over the more than five months recorded last February.
- The benchmark price continued to trend down this month for detached homes, but the pace of decline is easing. Citywide detached prices remain less than one per cent lower than last year’s levels, but price movements vary significantly by district, ranging from a three per cent decline in the City Centre to a two per cent increase in the South district.
- For the second month in a row, improving sales were met with gains in new listings. This is causing inventory gains.
- Sales levels were high enough to cause the months of supply to ease, but the persistent oversupply in the market continues to weigh on prices.
- February benchmark prices eased compared to the previous month and is over two per cent lower than last year’s levels. The overall benchmark apartment price of $244,700 in February is nearly 19 per cent lower than 2014 monthly highs.
- After the first two months of the year, rising attached sales and easing new listings caused inventories to decline.
- February months of supply is now below five months, an improvement compared to the past two years.
- Conditions continue to favour the buyer, but improvements have helped reduce the downward pressure on prices. However, divergent activity continues based on location, as prices declined across most districts, but improved in the West, South East and East districts of the city.
REGIONAL MARKET FACTS
- After the first two months of the year rising sales were met with gains in new listings. However, the improvements in sales outpaced the new listings gain resulting in further inventory declines. Months of supply have still eased over last year’s levels, but not enough to cause a significant change in price movements.
- After the first two months of the year, the benchmark price has remained relatively stable compared to last year.
- Trends in the town remain generally consistent with regional trends. Improving sales were met with some reductions in listings, inventory and the amount of oversupply in the market.
- The market is showing signs of improvement, but prices continue to remain over two per cent lower than last year.
- Improving sales in the town were strong enough to offset recent gains in new listings, causing further reductions in inventories and the months of supply.
- The elevated levels of supply compared to sales continue to cause prices to trend down. However, at a benchmark price of $409,150 so far this year, prices are just above levels recorded over the first two months of 2019.
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.
Click link below for full report.
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.
PLEASE CLICK LINK BELOW FOR MARKET STATS
Airdrie November 2019 Market Stats