Warm weather brings indications of spring market to city
Following the second warmest February on record, the warm, sunny snow-free conditions emblematic of a spring housing market are already on display in our city. And while Calgary’s housing market hasn’t yet fully emerged from the doldrums, there are at least some signs of life.
With double-digit declines being the norm in 2015 for year-over-year sales, including several months of declines in excess of 25 per cent, the first two months of 2016 have seen the decline lessen.
Since October 2015, when year-over-year sales in the city fell by 33.2 per cent according to CREB®, Calgary’s housing market has seen those declines lessen to 28.7 per cent in November, 18.1 per cent in December, 12.6 percent in January 2016 with February seeing the first single-digit decline in the city since December of 2014.
“It makes a big difference. People want to get out and enjoy the weather, so there’s typically more buyer interest and potential foot traffic for sellers,” said CREB® president Cliff Stevenson. “When the snow is gone, buyers can see the full yard with all the shrubs and trees, so there’s less guess work about what they’re getting for a particular property.”
Although the drop still represents a 37 per cent decline from long-term averages for the month, prospective spring buyers are still being greeted with conditions conducive to buying, including warm weather and benchmark prices that have fallen by 3.45 per cent in comparison to last year.
Additionally, buyers have also seen an uptick in the number of homes up for sale – all factors of a typical spring market.
“In the spring is when we typically see more people out looking for homes,” said CMHC analyst Richard Cho.
According to Cho, Calgary’s unseasonably warm weather may have encouraged at least a few prospective homebuyers to wake from their winter slumber and begin the hunt for a new home.
“I think the warm weather certainly helps and I think the early spring has probably got people out a bit earlier than usual,” said Cho.
Along with a rise in the number of Calgarians seeking new accommodations, the number of homes up for sale has also been on the upswing.
“We do typically see listing activity pick up in the spring,” said CREB® chief economist Ann-Marie Lurie.
According to CREB®, there were 2,906 new listings in Calgary in February, nearly identical (-.99 per cent) to the number of homes placed on the market in February 2015 and an improvement from the 16 per cent decline in year-over-year listings seen in January. Coinciding with the rise in temperatures, listings during the month rose from 2,742 in January to 2,906 in February.
In 2015, when February saw chillier temperatures, listings numbered 2,935, with the normal seasonal spring uptick coinciding with a positively balmy March.
In an attempt to assist those buyers looking to take advantage of the arrival of spring and the buyers that it brings, Stevenson said it’s important to be pragmatic and have a definite plan before moving forward.
“The high volume of inventory that we’re seeing has pushed sellers to be more realistic about their pricing expectations and the amount of time their properties may be on the market… a solid selling strategy can really make the difference in this market.”
And while there have been signs of life from Alberta’s most precious resource, with the price of a barrel of West Texas Intermediate climbing above the $40 U.S. mark for the first time this year, Cho said it might be a while before other factors show a similar rally.
“I think the underlying factors that support housing demand are still relatively weak,” said Cho.
“We’re seeing employment losses, in-migration has slowed down and income growth has slowed down as well. So despite the early spring, the fundamentals that support housing are still weak.”