Third-quarter
activity continues to show signs of improvement. Similar to last
quarter, much of the improvement in the market has been driven by supply
adjustments.
However, the housing market has also benefited from
stronger year-over-year gains in sales activity this quarter. Price
declines have likely contributed to some of the demand growth. Also,
sales growth has been driven by product priced under
$500,000.
“This is a market with divergent trends. The lower end of
the market is recording improving sales and easing supply. This is
supporting more stability in prices. However, at the higher end of the
market we continue to see slower sales and rising
supply,” said CREB® chief economist Ann-Marie Lurie.
“Persistent struggles in the overall economy have caused a
shift in salary expectations, along with adjustments in housing demand.
Improvements in the lower end of the market will eventually impact
higher price ranges, but we are still in a buyers’
market. We are facing enough economic risk that it will prolong the
time it takes to move the entire market to more stable conditions.”
Supply continues to adjust in the resale market, mostly
due to reductions in new listings. Easing starts and lower vacancy rates
are also helping reduce overall supply levels. These supply adjustments
will help support more stability in prices,
but often move at a slower pace compared to supply reductions driven by
demand growth.
Nonetheless, the easing supply compared to sales is
helping push the market toward more balanced conditions and reducing the
level of price declines. Prices continue to remain nearly three per
cent lower than last year’s levels, but the pace
of decline is easing, and third-quarter prices remained relatively
stable compared to second-quarter figures. While we are far from price
recovery, pressure on prices should ease if these adjustments continue.
Three things to know about the 2019 third-quarter market update:
- Sales activity improved by 6.75 per cent compared to last year, driven by gains in the under-$500,000 segment.
- On average, inventories declined by nearly 14 per cent compared to last year.
- The
third-quarter benchmark price was $425,533. This is a decline of 2.74
per cent year-over-year, but a 0.31 per cent increase
quarter-over-quarter.
For more information, please refer to CREB®‘s Q3 2019 Calgary & Region Quarterly Update Report, available here.