Sales jumped last month in Calgary for home resales, but the numbers are still well below pre-downturn levels.
The Calgary Real Estate Board released its data for February this week, showing sales grew by about 23 per cent from the same month the previous year.
“It’s pretty strong improvement, but it’s more representative of how weak (February) last year was, which was one of the weakest (months) since the late ’90s,” says Ann-Marie Lurie, CREB’s chief economist.
Almost 1,200 homes sold in February. While far below pre-recession 2014, when the market saw roughly 1,800 sales, the levels this February were strong enough to offset the 14 per cent rise in new listings.
“So inventories were still going down,” Lurie adds.
Inventories were down almost seven per cent, year over year, moving the market more toward balance, she says.
Still the sales-to-new-listings ratio — an indicator of the balance between buyers and sellers — remained below 50 per cent. February’s ratio of 47.5 per cent was also an improvement from the same month last year of 44 per cent.
A number between 50 and 60 per cent is considered a balanced market.
Another sign of persisting buyer conditions was the continued decline in the benchmark price. This metric, which eliminates the highest and lowest priced homes sold on the market, fell 0.79 per cent last month, compared with February 2019, to $416,900.
“We are still seeing lower prices, which is consistent with the fact we’re still oversupplied,” Lurie says.
Sales growth was lowest in the single-detached homes segment, still up 16.3 per cent. The largest segment of the market also saw the lowest decrease in benchmark price (-0.31 per cent).
Apartment sales led the market, up last month by more than 39 per cent compared with February 2019. But the benchmark price fell by 2.43 per cent to $244,700, the biggest drop among all segments.
As well, apartment inventory rose, unlike the other segments, by more than 10 per cent, and new listings rose 24 per cent.
In contrast, the attached segment, which includes townhomes, saw new listings rise by about six per cent. Yet inventories fell by more than 11 per cent, slightly less than single-detached homes (-11.89 per cent).
Attached also saw a big jump in monthly sales compared with last year, up more than 29 per cent, and the benchmark price only fell 0.96 per cent to $310,700.
“The sales (overall) we’re seeing year to date are really in line with what we’ve seen over the past five years,” Lurie says. “But it’s nothing like pre-2014, so it fits with that notion this is a new normal.”
Consumers are much more cautious than they were when the energy industry was growing, she adds. And the coronavirus, which routed energy prices at the end of last month and the stock market, presents another reason for caution. Still, recent changes to the mortgage stress test, which should expand affordability, may be beneficial in the coming months.
“That’s set to start in April so we have another month before we see its effects on the market but, yes, all of those things (including coronavirus) can influence the market for sure,” Lurie says.
