Price growth slows as supply to demand balance improves
City of Calgary, August 3, 2021 –
July sales totaled 2,319 units, which is well above long-term averages and the best July on record. The pace of sales growth has eased over the past few months, but so too has the pace of new listings growth. This has helped prevent any further monthly gains in inventory levels, and while overall supply remains slightly higher than last July, it’s mostly due to gains in apartment and row product.
With 6,678 units in inventory in July, the months of supply rose to just under three months. These gains are leading to far more balance between sellers and buyers. However, there is a significant variation between product type, as the months of supply ranged from two months in the detached sector to nearly six months in the apartment condominium sector.
“Over the past several months, we have seen housing market conditions trend toward more balanced conditions,” said CREB® Chief Economist Ann-Marie Lurie. “This eased some of the upward pressure on prices, as prices are starting to stabilize following steep gains that occurred in the first half of the year.”
Benchmark prices in the city reached $460,100, slightly higher than last month and nearly 10 per cent higher than last July. Price growth has been the highest in the detached sector, which currently sits 11 per cent above last year’s price and has finally recovered from previous highs in 2014.
HOUSING MARKET FACTS
Both sales and new listings trended lower relative to last month, but remained higher than last year’s levels. Sales are still at record levels, but with only 1,822 new listings coming onto the market in July, the sales-to-new-listings ratio remained relatively high at 78 per cent.
Slower sales relative to the inventory levels also caused the months of supply to trend up. With just over two months of supply conditions remain relatively tight. However, this is an improvement relative to the past five months. Activity also varies by price range, with homes priced below $500,000 still facing tight market conditions with less than two months of supply.
Prices continued to trend up this month over last month. At a city-wide benchmark price of $539,900, prices are 11 per cent higher then last year’s levels. Prices have been on the rise in every district, but it is only the City Centre that is reporting prices below the 2014 high.
While sales activity did slow in some districts compared to last year, overall year-to-date levels remain at historic highs. While new listings are higher than last year’s levels, they trended down enough compared to last month to cause a slight monthly decline in inventory levels. With 209 sales and 577 units in inventory, the months of supply rose to nearly three months. This is still lower than levels recorded last year, but much higher than the extremely tight conditions recorded over the first half of the year.
Benchmark prices continue to rise over last month, but like other property types, at a slower pace. Nonetheless, at a benchmark price of $428,400 in July, levels are nearly ten per cent higher than last year and have recovered from previous highs. While price gains have occurred across most districts, on a year-to-date basis, they have not yet fully recovered from previous highs in the City Centre, North East, South and East districts.
Following 351 sales this month, year-to-date sales are sitting at record highs. While the pace of sales growth is slowing relative to earlier in the year, so too is the pace of new listings coming onto the market, prevented any further monthly inventory gains.
With inventory levels over 1,000 units and slightly slower sales this month compared to last, the months of supply pushed up above three months. While levels are lower than anything recorded last year, the improved choice is slowing the monthly price gain. However, prices remain nearly 11 per cent higher than last July.
Compared to last year, prices have improved across every district, with gains ranging from a low six per cent in the northwest to a high of 20 per cent in the east district. Despite the gains, prices continue to remain well below previous highs.
Thanks to reductions in new listings, inventory levels trended down over the previous month yet remain relatively high with 1,918 units available. While trending down relative to last month, July sales are still far better than any July over the past six years. However, the higher inventories relative to sales did contribute to the monthly rise in the months of supply, which sits just below six months.
Additional supply choice is having some impact on prices depending on the district. While prices have stalled or eased slightly in most districts compared to last month, strong gains still occurred in the south and southeast districts. While prices remain higher than levels recorded last July, they remain far from price recovery.
REGIONAL MARKET FACTS
After posting another record month, year-to-date sales totaled 1,510 units. With only seven months of data, Airdrie sales are just shy of the annual record high of 1,695 set in 2014. Relative affordability and flexible work arrangements are some of the factors contributing to the surge in demand. At the same time, the supply in the market cannot keep pace. Inventories continued to trend down relative to previous months and compared to last year.
Strong sales and low inventories kept the months of supply just above one month. Persistent sellers’ market conditions resulted in further price gains. Price growth remains strongest in the detached sector, as benchmark prices reached $435,300 in July, nearly one per cent higher then last month and 15 per cent higher than July 2020 figures.
July sales remained relatively strong, contributing to the record setting pace so far this year. While conditions continue to favour the seller with under two months of supply, there was some inventory growth in July. Thanks to some gains in new listings relative to sales, inventory levels trended up this month. Despite some supply gains, total inventory levels remain at some of the lowest levels recorded in July since 2007.
Persistently tight conditions continue to impact prices in the area. The strongest gains occurred in the detached sector, where benchmark prices pushed above $500,000 in July, over two per cent higher than last month and 17 per cent higher than last July.
While sales in July improved relative to last year’s levels, they have been trending down compared to levels seen earlier in the year. This is partly due to further reductions in supply. There were 73 new listings that came on the market in July, keeping the sales-to-new-listings-ratio elevated at 96 per cent and supply levels eased to 109 units. Inventories are at the lowest July seen since 2006 and with less than two months of supply, the market continues to favor the seller.
Like other areas, persistently tight market conditions continue to impact prices. This is primarily driven by price growth in the detached sector. In July, detached home prices reached $511,800, nearly one per cent higher than last month and over 13 per cent higher than last year’s levels.