The latest resales data from the Calgary Real Estate Board (CREB) show the market slowdown continued into the first month of 2019.
And expect more of the same, says CREB’s chief economist Ann-Marie Lurie.
“The numbers for the month weren’t much of a surprise,” she says.
“And for the most part we expect this first quarter to have fairly weak numbers because there is so much uncertainty right now, which affects confidence.”
For January, resales in the city totaled 804 units. That’s 16 per cent below the same month last year, and 21 per cent below the long-term average for the month.
The benchmark resale price also fell to $414,800, one per cent less than December and four per cent below January 2018.
While sales dropped for detached homes — the largest segment in the city — some areas did show strength, including the northwest and northeast districts, which had among the highest sales and now have the fewest months of supply.
But overall, sales fell by 17 per cent year over year for the segment, and the benchmark fell about 4.5 per cent to $476,500.
Apartment sales were also down 13 per cent compared with January the previous year, and 20 per cent below the long-term average.
Its benchmark experienced less of a decline than detached — about 1.7 per cent to $251,300.
The attached segment saw sales fall, too (about 16.5 per cent), along with the benchmark price declining by more than four per cent to $313,700.
Within that segment, semi-detached prices eased by five per cent to $393,100, and the row house benchmark fell to $284,300, down four per cent compared with last year. Sales year over year fell about 14 per cent and 18 per cent respectively in these sub-segments.
For Cochrane, Okotoks and Airdrie, markets were also lacklustre, struggling with high inventories. For instance, the detached benchmark for Cochrane remained stable for the month, year over year, at $408,600. But inventory increased with months of supply now at about 14 compared with about eight months at the start of last year.
Airdrie’s benchmark fell from about $345,000 in January 2018 to about $327,000 last month, about a two per cent decline. As well, inventories inched upward for the month, year over year.
The Okotoks market benchmark fell from about $422,000 in January 2018 to about $410,000, while inventories rose compared with the same month last year.
Lurie notes, however, the gloom over the economy has subsided somewhat compared with December. In particular, the price of oil has improved, thanks to government-mandated production cuts, which are now starting to ease.
“The challenge is with those cuts, what does that mean for employment?”
She adds the positive impact will take some time to be reflected in housing.
“Housing tends to lag behind the economy,” she says. “But I believe some of the confidence will come back as production comes back.”
Additionally, interest rates appear to have stabilized, which should help bolster prices going forward.
“It certainly doesn’t make things worse for further impact on demand,” she says. “We’ve had five rate hikes since 2017, so this would give people time to adjust.”
What’s more is interest rates are still relatively low by historical standards, even though they may not feel that way for homeowners who entered the market in the last decade.
“These are people haven’t seen rates as high as they’ve been before,” Lurie says. “But ultimately it’s the economy that’s going to drive our housing market.”