COVID-19 struck a serious blow to resale homes activity in April, with a 63 percent decline in sales from April 2019.
In May, the gap was closed to a decrease of 41 percent, year over year, according to the Canadian Real Estate Association* (CREA), which obviously is much better, but some may say that’s putting lipstick on a pig.
Except, with the virus being a part of our lives for the foreseeable future, the housing market in Calgary is a completely different beast than it was, even in the first half of March.
Year-over-year comparisons of months with no virus to months with the virus lose validity in the ‘new reality.’
“I don’t think it’s reasonable to compare 2020 numbers, during COVID-19, with last year’s,” says Calgary-based Re/Max Real Estate broker and owner Lowell Martens. “We’ve experienced a blip that hit Calgary badly for two months and no one in the country has really experienced anything like this, so no one knew how to deal with it or understand the full impact.
“I think now we’re able to look back and acknowledge that we still have a serious problem with COVID-19 and we must continue to take the right precautions, but as things are re-opening, we anticipate changes in the summer.”
April was the first full month of the virus affecting the market, so, following Martens’ lead, let’s compare CREA’s numbers (market-wide) for April and May this year.
- Sales: In April, sales were 776 homes (as noted above, down 63 percent from April 2019. Sorry, couldn’t resist). In May, sales were almost double those of April at 1,441.
- Average price: In April, $409,318. In May, $422,994.
- Dollar volume of sales: April’s sales were worth $317,600,000. In May, that rose to $609,500,000.
- New listings: 1,874 new listings came on the market in April. May saw an increase of 3,096. In normal times, an increase this large would probably not be welcomed. But these aren’t normal times and the increase could be an indication sellers are feeling a bit better about the market.
- Sales-to-new-listing ratio: In April, it was 54 percent. In May, 53 percent.
The April-to-May jump was common across the country.
According to CREA, national sales increased 57 percent, with varied increases in major markets. Sales rose by 53 percent in the Greater Toronto Area, 92.3 percent in Montreal, 31.5 percent in Greater Vancouver, 20.5 percent in the Fraser Valley, 68.7 percent in Calgary, 46.5 percent in Edmonton, 45.6 percent in Winnipeg, 69.4 percent in Hamilton-Burlington and 30.5 percent in Ottawa.
“May’s housing numbers are certainly a mixed bag of results. Sales and new listings are both way up month over month but still way down compared to a year ago,” says Shaun Cathcart, CREA’s senior economist. “The big picture is, things are moving in the right direction but still have a long way to go. That said, under the surface those numbers have been steadily rising from mid-April right through the first week of June, so June may end up a similar story. With sales and new listings moving down and now back up in tandem, and overall supply still falling, prices appear to be holding firm at this point.”
Martens finds the Calgary numbers encouraging.
“I’m not surprised at what CREA is reporting. While Calgary’s real estate market felt the full impact of COVID-19, especially in April, activity is starting to pick up again,” he says. “In June, I am anticipating an uptick in transactions in Calgary from May (see facing page). While we’re halfway through the month and seeing a 15.8 percent drop in sales from last year, I am anticipating that we could come close to matching the June 2019 transaction numbers.”
He predicts the summer will see increased activity.
“I am not anticipating a price increase or decrease in Calgary. This wasn’t happening before COVID-19 hit Alberta,” says Martens. “Lower-end properties under $500,000 are selling, which is encouraging. In April and May, listings were down in the region as many buyers and sellers were taking a wait-and-see approach. Now that the economy is beginning to re-open in a phased approach, I am anticipating that the summer months will be busier than usual. No one really saw it coming back this fast, but we may see listings come back up again, leading to stabilization.”
On the heels of the CREA report, Re/Max issued its own, saying, “The Canadian housing market is likely to gradually begin its return to sustainable, healthy levels toward the end of 2020.”
“The Canadian housing market was strong before COVID-19 hit, and despite the tragic impacts of the pandemic, we are optimistic the housing market could be restored much sooner than initially expected,” says Elton Ash, regional executive vice-president, Re/Max of Western Canada. “As we saw in our 2020 Liveability Report, Canadian communities are resilient and people love their neighbourhoods, showing a collective commitment to bounce back.”
Bring on summer in the city, says Martens.
“As we enter the summer months, we’ll have a better view of market activity as many buyers and sellers are now beginning to re-enter the market,” he says.
*Monthly statistics from CREA may vary from those published by the Calgary Real Estate Board because the CREA report is compiled two weeks later than CREB and may contain updated data.