Calgary’s residential resale housing market saw absorption rates slow in August due to slower sales activity, according to the Calgary Real Estate Board (CREB). Calgary home sales dropped by 27 per cent year-over-year to 1,643 units in August, 12 per cent below 10-year averages.
“Persistent weakness in the energy sector weighed on sales activity this month, which once again retracted to levels well below the norm for the city,” said Ann-Marie Lurie, chief economist at CREB, in a press release.
The ratio of residential unadjusted sales-to-new listings dropped from 67 per cent to 60 per cent between July and August, a factor contributing to inventory levels increasing to 5,146. Due to that and a decline in sales activity, months of supply increased to 3.13 months.
Homes in all price ranges experienced sales declines, although homes in the higher price ranges saw the largest drop in absorption rates over last year. Year-to-date new listings over $600,000 saw an increased share of activity over last year. However, sales activity in this price range represented 18 per cent of total sales last month, down from almost 20 per cent during the same period last year.
“With more options in the higher-end of the market, sellers will need to consider their competition as well as their goals regarding a sell date,” said Corinne Lyall, president of CREB, in a press release. “This will influence the pricing strategy they agree upon with their real estate professional.”
Lurie notes that absorption rates in detached homes under $500,000 remained relatively tight, which may be causing price trend discrepancies. Despite that, benchmark prices remained level, reaching $456,300 in August. Lurie believes this is due to steadiness in both detached and attached homes, which have been more balanced than the apartment sector.
The apartment sector saw increased competition in August, as unadjusted months of supply grew to 4.3 as prices declined year-over-year by 1.44 per cent last month. Lyall points out that price declines and higher inventory levels in some segments are impacting buying patterns in Calgary.
“Improved selection in these segments is giving buyers the opportunity to be discerning about their purchase decisions. They may be weighing their options between resale and new product, along with what community fits their lifestyle,” said Lyall. “Although market conditions affect consumers’ real estate decisions, so do their lifestyles. People move for a number of reasons, including proximity to work and schools, along with changes in family dynamics.”
