City wide sales continue to sag with numbers being off by 20% for April. Inventory levels continue to creep up to 7,324 units (32% higher than this time last year). Despite the soft conditions, prices have remained stable at $436,500.
The labour report was just released for Q4 of 2017 and the numbers were positive. Economic growth for Calgary last year was 6.9% which was quite a bit stronger than expected. Although the forecast for 2018 is modest (+2%), there is some optimism that we may have seen the bottom of this last recession. Our primary industry will be a lot slower in the recovery. Uncertainty with the new pipeline, inter-provincial squabbling and market unreliability all have contributed to a less than optimum investment climate here in Alberta. The vacancy rate for commercial space downtown is listed at 26%, however, I have spoken with some insiders and they say it is more like 50%. It’s going to take a while for companies to get those jobs filled again. Currently in Calgary there are 13.9 billion in major projects with 36% of those infrastructure projects. Unemployment fell to 7.7% from 8.4% in Q3. The rental vacancy rate finished the year off at 7% and that is expected to fall to 5% by 2019.
Traditionally, the detached segment has carried the load over the last few years, however, this year sales are down 21% year to date (2,991 units). Inventory levels are quite a bit higher than last year sitting at 3,642 (43% higher year over year). Surprisingly, prices haven’t adjusted that much. There is quite a bit of stale, sub par inventory out there. I am seeing the entry level market still staying strong with some instances of multiple offers. If the home shows well and priced well, it’s selling quickly. There seems to be a glut of listings in the move up range ($600K-$900K). It would lead me to believe that the mortgage rule changes have affected the market more than we would like to think. If home owners can’t get much more of a house (moving from $400K to $550K), they are choosing not to move. Overall there is 4 months supply across the segment which represents a balanced market. Just know that could fluctuate depending on what price you are at in the segment.
The apartment segment sales are starting to look a little more reasonable. Year to date sales are down 15%, however, April sales compared to last year are only down 7% (262 units). Inventory levels are up 12% to 1,851 units and months of supply is just over 7. Benchmark prices are down 3% to $256,700 year over year. There has been an increase in activity in the $100K-$200K price range. It seems as though prices are adjusting enough to allow some people to enter the market at the low end. The Northwest district’s months of supply is under 4 while the North and Northwest district prices have only dropped 1% since April of last year.
Row housing prices have gained 2% year over year ($300,000). Sales are down 13% year over year (192 units) while year to date sales are down 14%. Inventory levels are up 24% to 1,075 units and months of supply sits at 5.6. Overall this segment is reacting similar to the apartment segment with lower end price ranges seeing an increase in activity. The Southeast, Northwest, North and City Centre have all seen modest year over year price gains.
The semi-detached market has seen the biggest reversal to start 2018. While this segment had closely paralleled the detached market, now sales are down 24% (156 untis) year over year and inventory levels have skyrocketed 66% (756 units). Benchmark prices are only down 1.2% since last April, but I would keep an eye on this. If the market keeps trending like this, I would expect to see bigger price drops. The Southeast and Northwest districts have lower supply right now. The East, South and Northeast districts all have over 6% increase in prices since this time last year.
Benchmark prices are down 1% year over year ($373,125)
Inventory levels are up 23% year over year
5-6 months supply
Sales similar to last year (over the 10 year average)
Inventory has increased 13% year over year
Prices have remained flat at $421,125 since last year
Inventory levels are 20% higher year over year
Prices are up 1% year over year ($422,100)
9 units sold in April (fairly similar to numbers seen in the last 5 years)
Benchmark prices are $389,400
Over 7 months of supply
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