Cher Ewing

Prices decline for   the second consecutive month

Sales activity remains well below long-term averages

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Elevated   inventory levels in October contributed to a second consecutive month of   price declines in Calgary’s resale residential housing market.

Benchmark   prices declined 0.7 per cent from the previous month, and 1.2 per cent from   the same time last year, to $453,100.

“Persistent   weakness in the overall economy continued to impact housing demand in Calgary   as October sales were nearly 16 per cent below long-term averages,” said   CREB® chief economist Ann-Marie Lurie. 

“In   addition, new listings did not decline enough to prevent inventory gains and,   ultimately, price contractions.”

The   steepest declines occurred in the apartment sector, where the benchmark price   fell to $288,300, a 0.8 per cent decline from September and nearly four per   cent from the same time last year.

Lurie   attributed the declines to a continued rise in months of supply – from a low   of three months in June to nearly six months in October.  

“That   sector is facing added competition from several new apartment projects,   improved vacancy in the rental market and more supply in the attached   sector,” said Lurie, noting months of supply in the sector has remained above   four since August.

“When   combined with a steep pullback in demand, it creates conditions that   generally favour the buyer.”  

Aggregate   prices in both the detached and attached sector also recorded both monthly   and yearly declines, but were moderate compared to apartments due to less   severe drops in absorption levels.

“In   this type of market, both sellers and buyers need to have those hard   discussions with their real estate professionals about their objectives,”   said CREB® president Corinne Lyall, noting increased competition from both   the rental and new home markets.

“If   sellers are serious about selling, they need to consider how they are   positioning their home on the market. Buyers, meanwhile, have to consider   whether that home satisfies their lifestyle needs.”

Overall,   October sales in the city declined by 33 per cent year-over-year to 1,421   units, with year-to-date sales falling by more than 26 per cent.

Meanwhile,   inventory levels during the month remained at 5,578 units, pushing months of   supply up to 3.93.   

Market   balance in the detached sector, which accounts for more than 60 per cent of   all sales in the city, varied depending on price segment.

More   than half of detached sales in October occurred below $500,000, where demand   relative to supply remained relatively tight – thereby potentially offsetting   some of the price losses in the higher end of the segment.  

“Sales   activity has varied depending on market segment and price,” said Lyall.

“For   example, while some price adjustments have occurred in the higher-end   detached category, this is less likely for the under-$500,000 detached   segment, which had more balanced conditions.”