As we wave goodbye to 2018, and face what’s ahead in 2019, we can be sure of one thing when it comes to the Calgary and area housing market: there is a lot of supply out there.
The Calgary Real Estate Board released its December housing statistics today and there were no surprises. We continue to have an oversupply in pretty well all of the resale sectors. CREB chief economist Ann-Marie Lurie said that persistent weakness in the job market around Calgary and significant changes in the lending market have contributed to this sustained oversupply.
Simply put, there aren’t as many people looking to buy a home (they either don’t qualify for a mortgage or are waiting to save up more money to make a bigger down payment) – and too many listings competing with one another to get the desired price.
How much oversupply exactly? Well, if we could stop all resale activity until just all the current inventory was sold, it would still take over 5.2 months. So, not surprisingly, the annual average benchmark price across all product types in Calgary went down by 1.5 per cent this past year. And it remains over nine per cent below the monthly highs recorded in 2014.
A lot of this was caused by supply gains in detached and attached homes. The benchmark price of the most popular home – the detached – declined by 1.5 per cent compared to last year. For attached units 2018 prices remain just below 2017 and annual prices remain 1.4 per cent below 2014 peak levels.
Housing sales are equally moribund: There were 16,144 units sold in 2018, down 14 per cent from 2017 and nearly 20 per cent below long-term averages.
Okay, do we want to look at some silver linings here? Sure. The apartment condominium sector has struggled with oversupply for almost three years and 2018 was no exception. However, supply has been easing, as inventories this year are only one per cent below 2017. Have we bottomed out and are looking for a modest rebound going forward for condos? Maybe.
Still not convinced? Well, even if prices are down and supply is up, we still have not seen the volatility of larger Canadian housing markets such as Vancouver and Southern Ontario. Prices have remained relatively stable here comparatively and home ownership is still a realistic option for many Albertans.
Instead of worrying about what may happen in the housing market, look at it as a potential opportunity. Buyers can afford to be patient and wait to find a place that resonates with them. That dream home you’ve always had your eye on may now be within reach.
In many sectors (okay, maybe not condos), selling your home now simply means you may not get the same return as you might have during a peak period like 2014. But that was a sellers’ market then and the value of your home now is still likely more than when you bought it.
People constantly ask Amie and I what will happen to the housing market in 2019 and it’s difficult to know exactly. CREB will release their 2019 market forecast at the end of January, so we’ll pass along their thoughts on the matter then.
I know this: Neither one of us is facing 2019 with dread and gloom. People will evolve, thrive and continue to buy and sell homes in Calgary, and we will continue to work hard to make sure our clients get the best possible service and value. Now, more than ever, having a professional realtor guide and advise you is important. Please let us know if we can help you, friends, families or colleagues do just that.
Have a Happy and Prosperous New Year!