CREB Now June 2022 Market Update: Market starts to shift as sales slow
Sales activity in June eased relative to the past several months and with 2,842 sales, levels declined by two per cent over last year’s record high. While sales activity has remained relatively strong for June levels, the decline was driven by a pullback in detached and semi-detached home sales.
As expected, higher interest rates are starting to have an impact on home sales. This is helping shift the market toward more balanced conditions and taking some of the pressure off prices,” said CREB® Chief Economist Ann-Marie Lurie.
While we are starting to see some transition, it is important to note that in Calgary year-to-date sales are still at record levels and prices are still far above expectations for the year.
This pullback in sales was not met with the same level of pullback in new listings. This caused inventories to trend up over previous months. These shifts are supporting some easing from the exceptionally tight conditions as the months of supply remained just shy of two months. While two months is still considered low for our market, it is a significant change over the one month of supply recorded earlier in the year.
After three months of gradual gains in the months of supply, prices eased slightly relative to last month. However, with a city-wide benchmark price of $543,900, levels are still over 13 per cent higher than last year.
With further rate gains expected, we could continue to see slower sales activity and some monthly price growth slippage in the Calgary market in the coming months. However, thanks to renewed migration and job growth in a wide range of sectors, it is unlikely that we will see a full reversal of the price gains made so far this year.
For the third month in a row, sales levels in the detached market have eased. Much of the pullback has occurred from homes priced under $600,000. While some of this is likely related to the continued lack of supply choice, the pullback in this sector is also related to the rise in lending rates that are impacting qualifications levels and creating some hesitancy among consumers.
The pullback in sales relative to new listings did cause some modest gains in inventory levels compared to earlier in the year. This helped push up the months of supply to just under two months. The shift to more balanced conditions has been limiting the upward pressure on prices. As of June, the benchmark price was $647,500. This is comparable to last month, but still 16 per cent higher than last year.
Like the detached sector, sales activity slowed in June. While the pullback in sales was not enough to offset earlier gains, it was enough to push the months of supply up to nearly two months. While this gain in months of supply is likely welcome news for some buyers, conditions still remain tight compared to what we traditionally see in this segment of the market.
Prices also saw some adjustment this month easing slightly relative to May’s levels. This was mostly due to adjustments in the North East, East, North West, North and South East districts of the city. However, with a benchmark price of $581,600, prices in Calgary remain nearly 13 per cent higher than levels reported last year.
Unlike the detached and semi-detached sector, row sales activity improved and reached a new record high for the month of June. The row market tends to offer a more affordable option for consumers compared to both semi-detached and detached homes. While new listings did improve relative to levels recorded last year, it was not enough to offset the gains in sales. As a result, inventories trended down and the months of supply remained relatively tight at one and a half months.
The benchmark price still recorded some modest gains this month, but the pace of growth slowed down significantly compared to earlier in the year. Overall, the benchmark price reached $363,700, nearly 16 per cent higher than last year.
While apartment condominium sales continued to slow from record levels reported earlier in the year, sales were still over 31 per cent higher than levels reported last year. This in part was possible due to the recent boost in new listings. At the same time, the boost in new listings did help take some of the supply pressure off this market as the sales-to-new-listings ratio eased to 62 per cent and the months of supply pushed up to nearly three months.
The shift to more balanced conditions is also helping slow the pace of price growth in this market, but not completely disrupt it. The benchmark price in June reached $277,400, nearly one per cent higher than last month and 10 per cent higher than last year’s levels. Despite these gains, prices continued to remain below 2014 highs.
REGIONAL MARKET FACTS
Sales in June continued to ease from levels reported earlier in the year and levels achieved last year. However, the decline was not enough to offset earlier gains as year-to-date sales remain over 24 per cent above last year’s levels. While new listings did improve compared to last year, levels were not enough to significantly alter the tight market conditions in Airdrie. The sales-to-new-listings ratio remained relatively tight at 81 per cent and the months of supply, while higher than earlier in the year, pushed just slightly above one month.
Earlier in the year, Airdrie reported some of the highest monthly price gains ever seen in the market, so as interest rates rise and consumers take a step back to reevaluate conditions, it is not a surprise that we are seeing some adjustments in price. While prices have trended down for the past two months, they remain over 22 per cent higher than levels reported last year.
Easing sales this month contributed to year-to-date sales of 735 units, just slightly higher than levels reported last year. So far this year, the growth in new listings has outpaced the growth in sales and it has helped push up inventory levels relative to what was available in the market earlier in the year. This also helped push the months of supply back above one month, something that has not happened since October of last year.
While conditions remain far from balanced, the slight shift has taken some of the pressure off home prices which reported strong monthly gains earlier in the year. The benchmark price in June rose to $522,600, a slight gain over last month and nearly 18 per cent higher than prices recorded last year.
Sales activity remained relatively stable this month supporting year-to-date sales of 544 units, just slightly higher than levels reported last year. At the same time, new listings have also remained relatively consistent with last year’s levels. This is leaving the market to continue to favour the buyer with one month of supply and a sales-to-new listings ratio of 80 per cent.
Despite tight conditions, there was a modest pull back in the monthly price. However, with a benchmark price of $556,200, prices remain nearly 17 per cent higher than levels reported last year.
Click here to view the full City of Calgary monthly stats package.
Click here to view the full Calgary region monthly stats package.
Pete and Katelyn’s Market Update:
Katelyn: Hi. Okay. Sorry. .
Pete: Wow. That’s quite the intro. You’re excited to do this.
Katelyn: Terrible. Horrible. Hi, I’m Kates
Pete: and I’m Pete
Katelyn: and we’re here to deliver our June monthly market updates. I know that there’s been a lot about, you know, what’s been going on in the market, how the market’s been slowing down. There’s so much news about what’s going on in the market right now.
But actually when we look at the numbers, it’s actually not that bad. It’s actually pretty healthy, but we’re actually gonna go through it in detail. Some of it might make you laugh. But stay tuned.
So in terms of sales, Pete, what’s going on?
Pete: Sales are down two and a half percent from last year. So two and a half percent. First of all, it’s not that bad. You know, when we’ve seen some of the, you know, the ups and downs of real estate that we’ve seen over the years, we’re down two and a half percent from last year’s June, but also keep in mind last year’s June was a record June, so we’re down two and a half percent from the record in terms of total sales.
What are listings doing?
Katelyn: Listings are actually also down about 2% as well, but again, it’s not as bad and year over year, it’s only 2%.
Pete: And if sales are down 2% and listings are down 2%, we’re actually. You know, right back where we were kind of thing, except for this important number. Inventory is actually down almost 22%.
It’s down 21.9% from last year. So that’s significant. So if we’re, we’re almost at last year’s record sales mm-hmm and we’re only down, you know in terms of new listings were down, you know, 1.8%, our inventory is still down 22% from last year. Which means, you know, there’s still, this is a very, very healthy market.
In fact, you know, you’re hearing all this news about how inventory is climbing. And boy, I tell ya, you know, it’s gonna be really hard to sell your house soon and, you know, are we gonna see more price decreases and stuff like that? What’s the month’s supply at now?
Katelyn: Month’s supply. It’s not even at two months. It’s 1.9. So it’s down 20% from what it was last year.
Pete: Yeah. Yeah. Month supply is down 20%. So when people are like, yeah, the market seems pretty soft and like we have a two month supply. This is something that we’ve prayed for, for like three or four years. So the market is actually still very, very. But what we’ll do now is we’ll sort of break it down.
We’ll give you what the total market price prices have done. And then we’ll break down. What, what different market segments have done by price as well. So in terms of total in total residential prices, what’s happening in Calgary is this reps still 13.5% from last year, 13 point a half percent is a pretty good price increase when you’re including some of the market segments that are kind of soft.
And what that means now is our benchmark price is at 543,000 or 544,000. 544,000 is the price of our our average, our, our benchmark price. What we used to call our average price. But average is kind of a, a hard number with with real estate, because, well, what’s the average, you know, what does your average house look like?
You know is so anyways, our benchmark price is 530,000 sorry, 5 44, 900 detached and, and row houses, which is like townhouses have gone up the most. Haven’t they Katelyn?
Katelyn: Yeah, they actually have. So with both the detach and the row prices, they’ve actually gone up 16%. So specifically for detached prices, they’ve actually gone up to 647,500, and then when we’re looking at row, so that’s your town homes. You’re looking at about 363,700, which a lot of the town home activity. There’s been a lot of activity actually on the town home.
Pete: So, yeah, finally. Yeah. Cuz that market was really soft for a while. Yeah. We’re also seeing the semi-detached, which is like a half duplex and and those types of homes. So they’re not, they’re attached to another home, but they’re not exactly a townhouse.
You’re probably not paying condo fees on a semi-detached home. Those are actually almost at 600,000 as well. So that’s at 581,00 is the average detached. Yeah, semi detached house. And so that means they’ve gone up in price by 13%. So the only market segment we left is apartments, which have really been dogging it for years, right?
Katelyn: Yeah, well actually sales are up 31% compared to last year, which is amazing. And for the listing for the list, price is actually up by 10%. So that’s about 31%. Yeah. In terms of unit sales. Yes. Yeah.
In terms of unit sales, they’re up 31% compared to last year’s. So apartments have been really slow for a while, but I mean that comparison. That’s amazing.
Pete: Yeah. And what’s interesting about that is I’ve been saying for a while that apartments are, are an opportunity, especially the downtown one, cuz the downtown of course, during the oil and gas, you know, price plunge and the and COVID and stuff like that, the downtown really was, I mean, it had its ass kicked by those market influences.
Yeah. But, and so for a long time, there was actually a lot of vacancies, but one third of the condos in the belt. We’re vacant only a year or two ago and that’s changing quickly. And my prediction has always been that once those, once those apartments are all full of people, whether they’re rentals or, or by or by the owners or sellers, I think you’re gonna see a jump in pricing in those ones.
Katelyn: I think so, too.
Pete: And, but we haven’t seen it yet, so there’s still an opportunity there. I believe. Time will tell if I’m crazy or not, but if you look at where the, where the price increases have been, that’s still where the prices have not gone up. Yeah, the y have not gone up. I dunno how to say this.
They’ve they’ve gone up the least, the least.
Katelyn: Yeah, exactly.
Pete: City center is only up 8%. But in terms of, you know, areas of the city that have gone up the most, what would that be?
Katelyn: The northeast. Yeah, it’s actually up almost 19% compared to the rest of the, you know,
Pete: Yeah, it’s it is 19% it’s 18.8%. I’d say it’s almost 20% price increase over last year.
So anyone that told you last year, you don’t wanna buy in the Northeast. The prices are not gonna, you know, like they’ve gone up the most. They’re up 20% in in prices from last year. A lot of the other areas are up, you know, sort of between 10 and 15%. The north, like north central area is up 18.7%.
So it’s right up there with the Northeast as well. But most other areas are yeah, actually the Southeast, which was actually killing it. The beginning of this year, they were the sort of the market leaders in terms of price increases. They’re still at 18%, but you know, the Southwest is at 13.7% the east, which would be everything from like forest lawn to Dover to those kind of areas is up 11%.
The west the west side is up 11.9. And the Northwest is at 14%. So that’s pretty healthy as well, but yeah, best performer this year, so far is the Northeast and the worst performer is the downtown. And I would say that most of that is is because of the apartments that were vacant. Yeah. And I would say, you know, even within that, those one bedroom condos, man, like nobody wanted those during COVID who wants a one bedroom condo during COVID you can’t have a friend living with you, you can’t work from home.
It was kind. So there’s still a few of those for sale and you can still get them for like $150,000-$160,000, like it’s crazy.
Pete: You tell that to anybody from Toronto or Vancouver, and they’re, they’re wondering like, is this thing like a 200 square foot, one with no kitchen? Like, what’s the deal, but that’s that’s a decent little one bedroom condo, right downtown for $150,000-$160,000 bucks.
You don’t believe me phone me. I’ll show them to you. I’d be happy too! Anyways, that’s our market update for for this. If you have any questions about your particular market, whether it’s a townhouse or an apartment or a detached, or, or you’re living in a certain area of the city, whether it’s Bayside or, Harvest Hills or wherever you’re living, feel free to give us a call.
Every market segment, every market piece is a little bit different. And even if you wanna live outside the city where you are like chest me or ger, we do a lot of business up in those areas. We don’t do that much in Oko tos for. Or Cochran, but Airdrie or Chestermere, we know really well as well.
So if you’re thinking about selling there or thinking of moving there feel free to ask about those markets as well. In the meantime, have a great month enjoy the sunshine, enjoy the kids being home from school and try to try to get some rest.
Katelyn: And don’t forget to follow our moving to Alberta Facebook page.
If you have any friends or family that are looking to move here in Alberta, we have a really great Facebook group where we have a lot of good information or you can hit us up. My number 403-615-2346.
And Pete. Yeah, I’m at 403-818-7310. So like Katelyn said too. Yeah. If you have any friends or relatives living in BC or Ontario in particular, those ones are probably where we’re getting the most calls from send them too “Moving to Alberta” on Facebook.
And there’s lots of great information there and they can ask questions that other people might be asking as well and stuff, some good discussions starting to happen. So give us a call anytime, happy to chat until until next month. Take care.