Inventory increases and sales drop in September, but overall sales for the year remain higher than last year
Strong gains in the first half of 2017 have put Calgary year-to-date sales at seven per cent above last years’ levels and 11 per cent below long-term averages, but challenges remain with easing sales and rising new listings.
Inventories rose across all property types to 6,861 units, while both apartment- and attached-style properties saw the highest inventory on record for the month of September.
“The recent rise in inventories is preventing further price recovery, as sales activity has moderated over recent months. This does not come as a surprise as sales activity is expected to remain modest by historical standards until more substantial economic improvements take hold,” said CREB® chief economist Ann-Marie Lurie.
“Some may consider this a setback, but it is important to note that recent movements are balancing out the higher than expected gains that occurred in the first half of the year.”
New listings in September totaled 3,266 units, a year-over-year gain of nearly 10 per cent.
“There are several factors influencing new listings. Given the falling prices over the past two years, some sellers were waiting for market conditions to improve prior to listing their homes. More stability in the market has prompted many of those sellers to no longer delay their listing decision,” said CREB® president David P. Brown.
“The recent rise in inventories is preventing further price recovery, as sales activity has moderated over recent months. This does not come as a surprise as sales activity is expected to remain modest by historical standards until more substantial economic improvements take hold,” – Ann-Marie Lurie, CREB® chief economist
“In some segments, rising new home inventories are also impacting total housing supply. Ultimately, prices are affected. However, this inventory also opens up opportunity for buyers to step up into a home that was financially unattainable.”
As of September, unadjusted benchmark prices totaled $441,500. This is 0.2 per cent below last month, but nearly one per cent above last year. Downward price pressure this month occurred across most product types. However, year-to-date benchmark prices in the detached sector remain comparable to last year.
Prices in the detached sector remain relatively stable compared to last year. Condominium apartment prices remain four per cent below 2016 levels and 12 per cent below 2014 highs. This sector continues to struggle with price declines resulting from excess supply, as months of supply pushed above eight months.
REGIONAL MARKET FACTS
Total residential sales in Airdrie were down in the third quarter by six per cent compared to last year. New listings totalled 660 units, a record amount for the third quarter. This brings the total new listings to 2,002 units so far in 2017, which is 5.44 per cent above last year. New listings growth and cooled demand has been the main cause for inventory gains, which averaged 532 units during the third quarter, 25 per cent higher than last year.
For the third consecutive quarter in 2017, Cochrane posted positive year-over-year sales growth. Residential sales activity totalled 183 units during the third quarter, compared to 157 sales in the same period in 2016.
Third-quarter year-over-year sales dropped by seven per cent to 130 units in Okotoks. This is the lowest third-quarter sales activity since 2010. The drop in overall sales activity was largely attributable to reduced demand in the detached sector. New listings increased to 224 units for the same quarter, causing inventories to increase.