Key Canadian market sees more sales declines

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Average home prices in one key Canadian market have declined by nearly one per cent in the first quarter of 2015 – new stats confirming a buyer’s market.

“Based on current sales activity and rising supply levels, the change in pricing does not come as a surprise,” said Ann-Marie Lure, chief economist of the Calgary Real Estate Board, which released its latest figures today.

“However, the recent price adjustments have not eroded all the higher than expected price gains recorded last year. While conditions likely tempered growth in new listings, further near-term price adjustments will be dependent on changes to inventory levels.”

The first three months of 2015 witnessed low sales and elevated inventory levels, causing unadjusted benchmark prices to ease by 0.44 per cent in March, relative to the previous month, for a total average price of $454,300.

The sales to new listings ratio also dropped to 41 per cent and months of supply averaged 4.03 for the quarter. This is a significant change from one year ago when the market was facing inventory shortages and price gains.

Sales activity fell by nearly 30 per cent in March, compared to this time last year, and remains well below 10-year averages. City of Calgary sales totaled 3,843 units at the end of the first quarter.

“In this market, buyers and sellers should be thinking about their short term and long-term objectives,” said CREB president Corinne Lyall. “This is a challenging economic time and people need to know their long game, so they can make the right real estate choices for today and tomorrow.”
 
  • Hal Tagg on 2015-04-01 3:16:55 PM

    This article is general for all of Canada.

    The Edmonton area currently has 5,820 homes listed, and had 1,617 sold in the past 30 days. That is 3.6 months of inventory. With 5 to 5.5 months being a balanced market, the Edmonton area is actually in a Sellers market surprisingly enough.

    The numbers for Calgary are strong too, with 4 months of inventory.

  • jerryw1005@gmail.com on 2015-04-01 4:31:26 PM

    6 months supply equals a balanced market.

  • Hal Tagg on 2015-04-01 4:58:44 PM

    The number of months of supply that equals a balanced market is debatable. 5, 5.5, or 6 isn't significant in this situation.

    The important point is that with Edmonton and Calgary being lower than a balanced market, there is actually upward pressure on prices.

    For there to be downward pressure on housing prices, the number of months inventory would have to be above 5.5, which it isn't.

    "Experts" can say all they want about Alberta housing prices falling, but at present, the evidence shows that average house prices are still rising at a slow pace (between 0 and 1% per year).

    That could possible change next month though, after all, this is Alberta.

  • Jack on 2015-04-02 10:08:05 AM

    Hal??? would you rather be a buyer or a seller in Calgary? If you say seller that just makes me laugh. Both my neighbors lost their jobs and have listed their houses. Both of them have dropped their price by more than a 100k. Does that sound like a sellers market to you?

    Realtors are so worried about their precious commissions they'll try and manipulate the market any way they can. The only people that are buying right now are the buyers that have been in the market for the past year that haven't been able to get a house. There are NO new buyers coming in. Price of oil is going to get worse, the price of Natural gas is going to be sub 2 bucks in Alberta. There will be a massive layoff coming mid summer early fall with a lot of small producers filing chapter 11.

    I feel sorry for the people that put 5% down on their house and bought during the last three months. They're going to be underwater on their house come July.

  • GOM on 2015-04-02 11:36:27 AM

    The monthly statistics reports on the Calgary Real Estate Board website used to show a balanced market indicator on their "Months of Inventory" graph. That indicator, last March sat at between 2 and 3 months representing a balanced market. Hard to buy 5-6 months as balanced given the tendency of Realtors and their associations to put positive spins on every number.

    By the same token, to look at declines of 1 to 2% in prices and call for people to be underwater in July seems equally unrealistic. inventory levels have not climbed steeply in the last month. They levelled off. Perhaps there was just a rush to list before a perceived downturn. The last 10 days of March saw inventory peak then decline slightly. Who knows if that will continue. Oil and Gas prices are subject to a lot of shocks in both directions.

    The only reality seems to be that the market has softened and will continue to face some pressure going forward. Interest rates are likely to rise at least somewhat over the next few years. Calling the bottom or top is a fools game.

  • GOM on 2015-04-02 11:38:12 AM

    The monthly statistics reports on the Calgary Real Estate Board website used to show a balanced market indicator on their "Months of Inventory" graph. That indicator, last March sat at between 2 and 3 months representing a balanced market. Hard to buy 5-6 months as balanced given the tendency of Realtors and their associations to put positive spins on every number.

    By the same token, to look at declines of 1 to 2% in prices and call for people to be underwater in July seems equally unrealistic. inventory levels have not climbed steeply in the last month. They levelled off. Perhaps there was just a rush to list before a perceived downturn. The last 10 days of March saw inventory peak then decline slightly. Who knows if that will continue. Oil and Gas prices are subject to a lot of shocks in both directions.

    The only reality seems to be that the market has softened and will continue to face some pressure going forward. Interest rates are likely to rise at least somewhat over the next few years. Calling the bottom or top is a fools game.

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