Calgary Housing Market Heat Map June 2016

Mike Star
Published on June 7, 2016

Calgary Housing Market Heat Map June 2016

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Here is a great look at Calgary average sale prices by community, using a heat map.  See below, a full report on the Calgary Housing Market.  Where is your home located? Is it higher or lower than the average sale price for your community?

Calgary Real Estate Statistics June 2016

Get the up-to-date Calgary Housing Market Statistics! Full analysis of the Calgary Real Estate market to date.

Get the up-to-date Calgary Housing Market Statistics! Full analysis of the Calgary Real Estate market to date.

 

Real Estate Statistics June 2016

As we edge into the second half of 2016 the Real Estate landscape seems to be greatly improving, a drastic change from only a few months ago.  As you can see in the graph below, the inventory levels in the Calgary Real Estate market has been trending on a steep decline.  When using the monthly inventory levels as a gauge for the type of Real Estate market, it’s easy to see that we have gone from a very strong buyers market to a more neutral or balanced market.

Calgary Housing Market June 2016_13 month history

Calgary Housing Market 13 month history. May 2015 – June 2016

This could be a strong correlation with oil prices and the media that surrounds the industry, including forward looking projections, industry layoffs, and news related to supply and demand.  Our peak inventory levels were at an all time high of 6.57 in January, this is also the month when oil hit an all time low and the bulk of industry cut backs were announced.  We’ve since seen the price of oil slowly recover to sub $50 territory.

Is Real Estate in Calgary really that dependent on the price of oil?

Is Real Estate in Calgary really that dependent on the price of oil?

For a more in depth look at my opinion on where this will lead us in the Real Estate market take a look at a recent blog post I wrote about the future of Calgary Real Estate and where I expect it to go.

 

Active and Sold Listings have made some improvements over last month as well.  In May, there were 6,148 active listings a drop of 1.65% from April 2016.  Just as important, the amount of sales were up 8.77% from April 2016 to 1,923.  This list to sales ratio is an important factor in determining the overall strength of our Real Estate market in Calgary.  Looking at the 10 year average, we can see the number of sales coming closer to that benchmark.  The last time we were at the 10 year benchmark for number of sales was in July of 2015.

Our inventory levels are still very high when comparing to the 10 year average.  They do seem to be stabilizing and coming down slightly from May, slightly higher than they were in March of this year.  Keeping a close eye on the inventory levels (along with the number of sales) will be important when looking for future trends.

Calgary Housing Market June 2016_Active and Sold Listings

The apartment condo section of our market has been the hardest hit sector during these last 18 months.  Year over year sold prices are still down by almost 5%.  Good news in this sector is that month over month the average sold price climbed a little over 3% which translates into some much needed relief for apartment condo owners looking to sell.  This section of the market doesn’t show signs of significant improvement to come for quite some time.  This is mainly due to the high vacancy rates in the downtown buildings along with all the new inventory coming from developers that sold units prior to build in the hotter 2013 and 2014 markets.

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Calgary Housing Market June 2016_Apartment Sold Prices

Calgary Housing Market: Condominium average sale price

If you’re thinking of selling in the near future you may want to learn how to become the ‘in demand’ property on the market.

Attached average sold price showed a small improvement both month over month (3%) and year over year (2%).  I see this sector having some significant gains in the months to come, especially in the inner-city attached infills.  This is due to the length our market has been in a recession.  At the start (2015) there were large amounts of infills on the market due to the high demand throughout 2014.  Developers were selling attached infills at all time highs in 2014 and were having trouble keeping up with the demand.  As oil prices began to sink, and the market stalled – The glut of inventory for inner-city infills forced developers to drastically reduce their asking prices.

Inventory continued to build with little to no sales in this sector throughout the first half of 2015 as developers that had already started the build process had no choice but to continue to completion and to market.  This led to developers halting any new builds and renting any home site inventory they had, resulting in no new builds (or very few) in 2016.  Now that inventory is starting to move again, it will be interesting to see when the tipping point hits.  There will be a time in the near future where demand for new infills start to outweigh the current supply.  With the majority of inner-city builders all holding off on any new builds over the last 18 months or so, we may be poised to see some major recovery in this sector.

Calgary Housing Market June 2016_Attached Sold Prices

Calgary Housing Market: Attached average sale price

Detached home sales in Calgary have seen the largest recovery thus far in the market with the average sale price climbing nearly 4% compared to last month and 3.74% when compared to May last year.  This sector has also seen lower inventory levels in some communities resulting in extremely fast sales and even multiple offers on some properties.  Realtors must be careful when listing a home in the detached market to ensure they aren’t strictly comparing to sale prices from several months ago.  Now more than ever, it is important to look at the currently active properties as more comparable or making adjustments to the sale prices to reflect the rapidly changing market.  If you’re looking to sell a property in the near future, reach out and get in contact with me.

Calgary Housing Market: Detached average sale price

Calgary Housing Market: Detached average sale price

Average Days on market is always one of the first thing someone looking to buy or sell in the Calgary housing market asks.  This is because the average days on market can be a good indication of the how strong (or how weak) the market is.  I’m personally not a fan of using the average days on market to help determine this as it isn’t taking various factors into account.  Average days on market doesn’t reflect price drops, expired and relisted properties, terminated, or withdrawn properties very well.  If a property starts of asking $950,000 is on the market for 60 days, then drops the price to $875,000 and sells in the following weeks at 72 days on market – was it truly on for 72 days? In my opinion it wasn’t.  It was on for the first 60 days at a price that was far too high for the market.  To me, the actual days on market is 12.  It was listed at a fair price and sold within a reasonable amount of time.

That being said, the average days on market this month is very similar year over year at 42 days.  and a drop of a few days over last month.

I prefer to look at the inventory levels and sales in the Calgary housing market to better determine current market strength.

Calgary Housing Market: Average Days on Market

Calgary Housing Market: Average Days on Market

When taking a closer look at the average days on market over the course of the last 12 months we can see the normality of close to 40 days for the first 6 months (May to October 2015) From there, the days on market seem to bounce around along with the declining oil prices, layoffs in the job market, negative media, and higher vacancy rates.  As the market settled over the last few months the average days on market came back down to previous levels, closer to the 40 days we’ve come to expect.

Average D.O.M. for the Calgary Housing Market

Average D.O.M. for the Calgary Housing Market

Surprising to most people the average home price in Calgary year to date is up 1.64% over last year.  Many people believe the market is in decline but the numbers don’t lie.  The average price is still lower than our all time high of $482,063 in 2014, but not by much.  I’ve seen many news stories over the last several months claiming this recession is far worse than the global recession of 2008/2009, this may or may not be true but it most definitely has not been so in the Real Estate market.  In the last recession our average price in Calgary dropped a total of approx 7% over 2 years.  If you still consider us in a recession you could say that our Real Estate market has only dropped a total of 1% over the last 18 months.  It really isn’t so bad.

The 15 year average for the city of Calgary is 7.62%

Calgary Housing Market: Average Residential Prices over 15 year period

Calgary Housing Market: Average Residential Prices over 15 year period

Looking back even further to a 25 year history in the Calgary housing market, we can see the average price increase for Calgary Real Estate prices is 5.87% and a whopping total of nearly 310% return if you had purchased a property 25 years ago!  Is it crazy to think that if you purchase a property today that it would be worth 310% more in 2041?  Putting it into perspective and doing the math, if you purchased a home at the average price today of $477,033 (and history repeated itself) In 2041 it would be worth $1,478,802

This might be a good time to consider buying a new property or even a second property as an investment.  Get my 4 steps to buying a second home, here.

Calgary Housing Market: 25 Year average sold price trend

Calgary Housing Market: 25 Year average sold price trend

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When looking at the average prices for the Calgary housing market, we tend to generalize it into one large category.  This doesn’t represent the average price very well for specific sectors because if one is doing very well it can skew the other 2, similarly if one is doing poor it can drag down the average price for the others.  In the info-graphic below I’ve broken the average price down into 3 categories: Detached, Attached, and Condos.

As you can see by breaking it down into the 3 categories, they are very different.  Detached homes are preforming quite well considering the current economy.  They are up almost 4% over last month and 3.74% over last year (hardly a recession for detached home prices) with a total average price o $562,195

Attached homes saw a good bump month over month of just over 3% and are up 1.8% from 2015 for an average price of $417,693

Condos have been the hardest hit sector of the market with so many vacancies downtown and more product coming online with new developments.  Condo’s got some much needed relief this past month with a price bump of 3% over April.  There is much more recovery needed in this area with an overall decrease in sale price of nearly 5% from this time last year.

Calgary Housing Market: Sale price by category

Calgary Housing Market: Sale price by category

Another way to look at the average Calgary housing market sale price, is to look at it month to month.  In the info-graphic below I break down the average sale price from a year to year (and year to date for 2016) to a month over month.  This is a great way to see what the average prices have done and look for trends.  May was our highest average sale price in over a year at $494,078 and our second largest monthly increase in average sold price.

Calgary Housing Market: month to month average sale price trend

Calgary Housing Market: month to month average sale price trend

Looking into the average sold prices is a great way to get a feel for where we are in the market, but how did the market get to that average? To answer that question we have to look a little deeper into the amount of new listings, absorption rates, number of sales in specific price ranges, inventory levels, odds of selling in the current market, and the percentage of sold homes vs. the percentage of unsold, expired, and terminated listings.

Starting with the number of new listings we can see a trend of increased inventory coming to the market.  This is mainly due to a renewed sense of stability in prospective sellers as the Calgary housing market is seeing more sales and increased pricing.  Many of the sellers that were sitting on the fence waiting for an opportune time to list have been and are starting to do so.  We have seen a great number of re-lists hitting the market as well, sellers that tried to sell previously and couldn’t are taking another shot at it due to improving market conditions.  As we can see below, new listings climbed by about 100 over last month (up 3.2%) and up approx 150 (almost 5%) over last year.

Calgary Housing Market: New Listing Inventory Levels

Calgary Housing Market: New Listing Inventory Levels

The odds of selling a home in this market have actually decreased dramatically over last year.  This is due to the number of new listings hitting the market far exceeding the amount of sales.  With prices stabilizing and a sense of renewed faith in the market, many more sellers are listing their homes which is increasing inventory.  Sales have also increased slightly but no where near the volume of new product coming to market.  This has decreased your odds of selling your home by almost 23% over last year!  Luckily we are seeing signs of improvement in the number of sales month over month with 1923 sales in May increasing the odds of selling by almost 11% over April.

If you’ve experienced trying to sell your home in the Calgary housing market with a little frustration, check out my recent article for some great advice:  So your house hasn’t sold? Advice for 2016

Calgary Housing Market: Odds of selling your home

Calgary Housing Market: Odds of selling your home

Interestingly, we haven’t seen a large difference in the amount the buyers have negotiated off the listing price.  The average is still very similar to last year, and not much of a change month over month.  On average a buyer has been able to negotiate nearly 3% off the asking price.  This doesn’t sound like much, it is however greater than previous years.  3% on the average listing price of approx $500,000 is $15,000 (on average)

Sometimes, being outbid on a home can be a good thing!  And just in case you’ve recently purchased a home here’s a great read on how to prevent buyer’s remorse

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Wow, look how much buyers have been negotiating off the list price!

Wow, look how much buyers have been negotiating off the list price!

Looking at the number of homes currently for sale (inventory) and the number of sales any given month is great, but to really understand the relationship between the two you need to compare them apples to apples.  Here is a graph showing the inventory levels (grey line) vs. the sales (red line = sales in decline, blue line = sales increasing month over month). It is vitally important to take both into consideration when looking at possible future trends in the market.

As you can see, the inventory levels have been growing with a recent dip in May.  This would typically be concerning but the growing number of sales is a great trend to see.  We are edging closer to May 2015 levels which was a more balanced market.  Hopefully inventory levels we continue to fall and sales will continue to rise in the coming months.  This could lead us on the road to recovery in the Calgary housing market.

Calgary Housing Market: Monthly Inventory vs Sales

Calgary Housing Market: Monthly Inventory vs Sales

This next graph is similar as it is showing us the month to month inventory vs. sales.  It takes the numbers a bit further by converting them into a percentage representing the absorption rate.  The absorption rate is a percentage expressing the inverse of months of supply. For example, when we look at May numbers there were 6,148 homes for sale, and 1,923 homes sold over that same period. The absorption rate is 1,923/6,148 = 31%. An absorption rate of less than 30% is a buyers market.  31% to 50% is what we consider a neutral or a balanced market and 51% or higher indicates homes are moving fast and the Calgary housing market is better for sellers.  Our 10 year average absorption rate in Calgary is approx 40%.

Calgary Housing Market: Absorption Rate

Calgary Housing Market: Absorption Rate

Shown differently, the needle on the gauge has just moved into a balanced market by a hair.  Those that tell you it’s a buyers market out there are incorrect when looking at Calgary as a whole, we’ve moved into a balanced market this month!  I use this term lightly as this is looking at the Calgary market as a whole.  Different sections of the market are performing drastically different, and some communities are out preforming others.  If you’d like to get in touch with me and go over your specific property or community, I’d be happy to help.

 

Calgary Housing Market Gauge

Calgary Housing Market Gauge

Breaking down the sales in the Calgary housing market by price bracket is a great way to see where the majority of the sales are happening and helps in forecasting the chances of a specific property selling based on list price and number of currently available properties in the same range.  As you can see in the following charts, the majority of homes are sold in the $300K to $600K range.  The $1 million dollar and up range representing the steepest decline in sales volume.

Calgary Housing Market: Number of sales by price range

Calgary Housing Market: Number of sales by price range

Shown differently, you can see that 50% of all sales in the Calgary housing market year to date (7,175 sales year to date in 2016) all happened in the $300,000 – $500,000 range.  This is a great way to look at any property you may be wanting to purchase, or are looking to sell.  If you want to judge the feasibility of a sale or know whether a home you are considering is a good buy – simply run the number of sales in the price range in the area you are considering vs. the number currently listed.  Here is a link to the City of Calgary community profiles

Calgary Housing Market: Breakdown sales year to date by price

Calgary Housing Market: Breakdown sales year to date by price

Want a copy of my Quarterly Calgary Housing Market Report?

Get in touch with me and I’ll send you a copy!

Calgary Housing Market June 2016_Quarterly Market Report

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