Calgary area sales rose for the fourth month in a row in October, moving the market closer toward balance, according to the latest data gathered by the city’s realtor association.
The Calgary Real Estate Board released earlier this month its market data from October showing year over year sales growth, largely driven by brisk activity in the under-$500,000 segment, says the board’s chief economist Ann-Marie Lurie.
“That’s where all of the growth has been, and we’re really seeing that make a difference in the market overall.”
Lurie adds falling inventories have also nudged the market more toward balance between buyers and sellers.
“Yet with the over $500,000 homes, sales still struggle to grow and inventories remain high.”
Overall home sales jumped in October by about 10 per cent from the same month the previous year.
More than 1,440 homes changed hands last month, compared with 1,320 in 2018. Yet on a year to date basis, however, sales were up modestly, about 1.4 per cent over the same span last year.
Lurie adds other metrics are improving, including supply levels. New listings, for example, fell more than 2.5 per cent in October, year over year, while year to date, listings were down more than 11 per cent. Additionally months of supply fell by almost 20 per cent in October compared with 2018.
Despite the positive indicators, the benchmark price for a home fell by more than two per cent month over month in October to $422,900.
Lurie notes the lack of price traction despite rising sales is due to the fact the lion’s share of sales are at the lower end of the market. This is largely the result of the changing nature of employment growth in Calgary.
Most of the growth has been in sectors that do not pay as much as energy sector jobs; although, Lurie notes the city has seen job growth in the energy sector, too.
“But we’re hearing people who are getting back to work in the industry are receiving a lower pay than they earned previously.”
The lack of high-income job expansion points to why sales growth for single-detached homes, which tend to be more pricey, has been modest. Sales only rose about 2.8 per cent in October from the same month in 2018, while the benchmark price fell by about 1.8 per cent year over year.
By comparison, sales for apartment condominiums grew by about 17 per cent in October year over year, while attached sales grew by almost 25 per cent. Prices still fell about two per cent and more than three per cent respectively. Lurie attributes price deflation in both segments to persistent oversupply.
Of all segments, attached is the healthiest, she adds. New listings increased by about 4.7 per cent from the same month last year, while months of supply fell by almost 29 per cent.
Sales activity in the outlying areas also improved in October from the same month in 2018 with Airdrie, Okotoks and Cochrane seeing roughly three per cent rises.
Lurie says overall the market still reflects an economy struggling to find its footing. And while the data show the real estate market moving toward balance, it still favours buyers.
“The market continues to get more affordable,” Lurie says. “So for those in the market, there is still a lot of choice available at lower prices than a year ago.”