Detached prices dip below $500,000 for first time since 2014
Coming off a month of stronger sales activity, November’s resale residential housing market returned to previous trends, according to CREB®.
In its November housing summary released Dec. 1, year-over-year monthly sales totaled 1,227 units, which is nearly three per cent lower than last year and 17 per cent below long-term averages.
“November was the first full month with CMHC’s new lending rules in effect,” said CREB® chief economist Ann-Marie Lurie. “As suspected, the gains in last month’s sales were temporary. Stringent conditions for borrowers are converging with the current economic climate and weighing on demand.”
While supply levels eased in November, the decline in sales resulted in a slight rise in months of supply. This caused benchmark home prices to contract even further, said CREB®.
City-wide prices totaled $436,200 in November, a 0.6 per cent decline over the previous month and nearly 4.1 per cent below last year’s levels.
Detached home prices totaled $498,300 in November, making it the first time since early 2014 that the monthly benchmark price dipped below $500,000.
“These monthly figures aren’t a big surprise given the dynamics of our market right now.”
Despite this price change, CREB® noted the detached resale sector has still fared better than most of the high density sectors, as it has not faced the same city-wide inventory pressure coming from the new home market.
Year-to-date detached sales have declined by three per cent compared to last year, but have also seen some modest improvements in recent months in the high end of the market, which is likely a byproduct of larger price adjustments.
“These monthly figures aren’t a big surprise given the dynamics of our market right now,” said CREB® president Cliff Stevenson. “We’ve seen pockets of sales activity in certain areas, but also lots of months where the expectations between buyers and sellers just aren’t matching up. November was one of those months.”
“Again, it can’t be overstated how important it is for housing consumers to keep asking questions and drilling down on what’s happening in their specific area,” adds Stevenson. “This kind of exploration and learning is how good real estate decisions get made in any market.”
HOUSING MARKET FACTS
- As of November, city-wide apartment condominium prices totaled 271,300, which is a 0.9 per cent decline over the previous month and 6.8 per cent below levels recorded last year. Current monthly prices have decreased by 10.6 per cent compared to monthly highs recorded in 2014.
- Year-to-date apartment sales in the city of Calgary have declined by 16 per cent for a total of 2,582 units. Meanwhile, overall inventories remained elevated and pushed up months of supply to seven months.
- Across Calgary’s eight districts, year-to-date apartment price declines have ranged from a low of 3.9 per cent in the North East, to a high of 7.4 per cent in the west end of the city. Over 47 per cent of condominium apartment sales have occurred in the City Centre, which has seen price declines of nearly six per cent.
- Most districts throughout the city have recorded a decline in sales and inventory gains. The oversupply has resulted in aggregate price declines for each property type in each district of the city. However, the magnitude of the decline varies significantly depending on location and property type.
- Detached sales activity continues to improve in both the City Centre, North West and West districts of the city, but overall levels are still well below the norm.
- While overall sales activity continues to slow in the attached segment, there was a sharp contrast in the number of transactions for row and semi-detached product. Year-to-date semi-detached sales have improved over by nearly 3 per cent over the previous year, mostly due to gains in the $300,000 to $399,999 and $600,000 to 699,999 range of the market. However, row sales have declined by over 12 per cent over the same time frame.
- Year-to-date average benchmark prices have declined by 2.6 and 4.8 per cent for both semi-detached and row product.