For the fifth consecutive month, Calgary’s resale housing market has experienced a significant year-over-year decline in sales.
Statistics from the Calgary Real Estate Board indicate there were 1,963 MLS transactions in April, down 22.7 per cent from the same month a year ago. Meanwhile, new listings fell by 18.1 per cent to 3,074. The market saw prices drop with the median of $419,900 off by 2.1 per cent from last year, while the average fell by 1.7 per cent to $470,499.
The number of active listings at the end of April was 5,598, up 46.5 per cent, while the average days on market to sell a property rose from 27 last year to 40 in April — an increase of 48.2 per cent.
“Conditions are still deteriorating. Sales are down . . . The pace of decline has slowed a little bit but you’re still seeing sales activity probably about 40 per cent or so below what we were seeing in mid-2014,” said Robert Kavcic, senior economist with BMO Capital Markets. “Then on the supply side that’s where it gets a little tougher because new listings have actually come off a little bit. There was a big spike in new listings around the turn of the year but they have started to slow a little bit now. That’s good.
“But the fact sales are still falling at a faster pace than new listings suggest the market balance is still turning against sellers even more,” Kavcic said.
“I think you’re going to see prices weaken still probably through the better part of the year. You’ve seen such a big jump in your supply of homes in the market, not just in Calgary but across the province. You’ve got to be pretty brave to be buying a home in the province at this point before we see some kind of sign that oil prices are picking up on a more sustained basis.”
Calgary’s housing market began to turn around in December as the reality of the oil price shock sunk in. Sales that month were down 7.5 per cent from December 2013 as new listings soared by 41.9 per cent.
That set the stage for this year. Year-over-year sales were down by 38.9 per cent in January, by 34.2 per cent in February and by 28.2 per cent in March.
New listings rose by 37.2 per cent in January followed by an 8.8 per cent hike in February. March saw the trend change, though, with new listings off by 5.5 per cent compared with a year ago.
“The sense I get is that things appear to be stabilizing. On a year-over-year basis, over the last two, maybe three months, it doesn’t look like things are getting any worse in terms of the decline relative to last year,” said Robert Hogue, senior economist with RBC Economics. “There might be, on a month-to-month basis, some kind of more stability. Maybe the market has found some kind of bottom. I’m not suggesting they’re going to be booming back up but at least the big letdown might be over for the time being.”
“That tells me that sellers aren’t flooding the market in desperation. People still hold well-paying jobs, interest rates are at historical lows, and there’s still optimism on the street. Look at the 50/50 at a Flames playoff game, or bar and restaurant receipts, which are up seven per cent year-over-year. We’re a resilient place,” he said.
“And Calgary home sellers are a typically hardy bunch. They’re not the sort to seize on a lower offer just because a national news story says the market’s going to hell. Calgary home sellers regard the market like they do the weather: if you don’t like the conditions, wait a while. It might get worse before it gets better, but it will get better eventually.”
But Bollinger said the one thing that could trip up optimism is the labour market.
“If oil prices stay in the tank and the big downtown towers cut budgets and staff, that’ll impact the housing market’s stability. That said, there are encouraging signs that oil prices have seen the worst of it,” he said, adding the immediate outlook for Calgary’s housing market is flat prices, general stability, and some pockets of weakness, in apartment-style condos and, on the other end of the spectrum, some luxury homes.
mtoneguzzi@calgaryherald.com
Twitter.com/MTone123
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