So what’s happening in the market as we start the last month of Q2-2020? Well in regards to May stats, city-wide the housing market remained slower than long-term averages, however most certainly saw improvement over April and continued it’s upward momentum through the month of May.
Speaking with some of my preferred mortgage brokers last week, all had the same message that pre-approval applications were up and that buyers are preparing themselves to get rolling!
With total sales in May just falling short of 1100, that would be a decrease over this time last year. That said, as a brokerage at Royal LePage Benchmark our sales were pretty strong and while they weren’t as high during this period as in 2019 they were higher than that of 2018. So good news as things continue to move forward. I myself have been able to move a pretty decent amount of listing inventory in May and have witnessed a pretty big change in both buyer and seller motivation.
In regards to buyers, that pent up demand we were talking about in our last market report seems to be getting rolling here and there is a real craving for fresh listings.
Buyers are however starting to realize that in some market segments, properties that are coming to market aren’t lasting long and may even be selling in multi offer scenarios.
Sellers on the flip side are starting to feel more confident with the reopening of Alberta’s economy and businesses, as well as precautions being taken, to start listing their homes. I expect to see more and more new inventory hitting the market in the weeks to come. Sellers are also pricing their product more aggressively and have been open negotiation with sale price to list price ratios falling on average from 97.5% to roughly 95.5%.
Our CREB® chief economist Ann-Marie Lurie had this to say:
"The initial shock of COVID-19 and social distancing measure is starting to ease. This is bringing some buyers and sellers back to the market. However, this market continues to remain far from normal and prices are trending down.”
"Activity has also shifted toward more affordable product, which is likely causing differing trends depending on product type and price range."
Now in regards to sales activity and product that is actually moving there is a huge disparity with in different market segments. Sales may be down in all price ranges, but the lions share of sales are in product priced below $500,000. Properties listed in higher price ranges have not had inventory levels decrease to match their drop in sale. The result is higher inventory levels than in the previous half decade which is putting a downward pressure on price.
In the higher price ranges the drop in inventory has not been enough compared to the drop in sales. Additionally, the months of supply is far higher than the already elevated levels seen during the past five years. The shift in sales toward lower-priced product is contributing to steep average price declines in the higher-end price-point of the Calgary market
Benchmark pricing, which reflects comparisons of the same type of home, has dropped in the Calgary market around 2% over this time last year. Now is still the time for sellers to look at listing as there may still be another 2-3% in price adjustments as the year progresses. Buyers however that are looking to purchase property do not need to fear these price adjustments as things will be set to bounce back in the coming year or two. It would be wise to have a good chat about what the expected present and future values are for homes that you are considering putting in an offer for. As always I am available to have that chat with my clients, friends and referrals at any time.