After three months where COVID-19 weighed heavily on the housing market, sales activity in June continued to trend up from the previous month, totaling 1,747 units.

Caution remains necessary, as monthly sales are nearly two percent lower than activity recorded last year. However, this represents a significant improvement compared to the past several months, where year-over-year declines exceeded 40 percent.

“Recent price declines, easing mortgage rates and early easing of social restrictions are likely contributing to the better-than-expected sales this month,” said CREB® chief economist Ann- Marie Lurie.

“However, the market remains far from normal. Challenges, such as double-digit unemployment rates, will continue to weigh on the market for months to come.”

New listings in June totaled 3,335 units, a six percent increase over last year. The recent rise in new listings caused inventories to trend up, but they remain well below last year’s levels.

Despite some recent monthly gains in supply, sales activity was high enough to cause the months of supply to dip below four months for the first time since May 2019. If this trend continues, it should help to ease the downward pressure on prices.

Residential benchmark prices are comparable to last month, but they remain nearly three percent lower than last year’s levels.

Detached Sector

• Sales activity in June totalled 1,092 units. This is an improvement over the past few months and only slightly lower than last year’s levels.

• Despite citywide declines, year-over-year sales activity improved in the City Centre, North East, North, South East and East districts.

• June also saw an increase in new listings, which is causing some monthly gains in inventory. However, increased sales offset the rise in new listings, causing the months of supply to trend toward more balanced conditions.

• Detached benchmark prices remained relatively stable compared to last month but were two percent lower than last year’s levels. Year-over-year price declines were recorded across most districts, with the largest declines in the North West, North East and City Centre districts.

Housing market activity in May remained slow, but sales exceeded the lows from April, which saw less than 600 sales in Calgary.

May sales totaled 1,080 units, a 44 percent decline from last year’s figures.”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,” said CREB® chief economist Ann-Marie Lurie.

“Activity has also shifted toward more affordable product, which is likely causing differing trends depending on product type and price range.”Sales are down in all price ranges, but a greater share of sales are priced below $500,000.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 Calgary market.

Benchmark pricing, which reflects comparisons of the same type of home, has eased by over two percent compared to last year and 0.4 percent compared to last month. This does not come as a surprise as the market continues to struggle with more supply than demand.COVID-19 and social distancing measures have contributed to rising unemployment rates and job losses throughout many economic sectors. This is weighing on consumer confidence and the housing market. Some of this job loss is temporary, but the energy sector remains the largest concern. Significant job loss throughout the typically higher-paid professional and technical services sector points to a longer adjustment period in the housing market, particularly in the higher end of the market.

Detached Sector

• Detached sales eased across the city, with the largest declines occurring in the West district.
• May sales totaled 670 units. This is a 43 percent decline over the previous year.
• The decline was met with lower inventory levels. However, it was not enough to change the oversupply situation. Citywide months of supply remained above four months.
• For the higher-priced districts – the West and City Centre – the months of supply rose to seven months.
• Detached home prices trended down in May compared to the previous month and remained nearly two percent below last year’s levels. Declines varied across the city, with the highest price declines occurring in the City Centre, West, North West and North East districts.

After the first full month with social distancing measures in place, the housing market is adjusting to the effects of COVID-19.

April sales hit 573 units, a decline of 63 percent over last year. “The decline in home sales does not come as a surprise. The combined impact of COVID-19 and the situation in the energy sector is causing housing demand to fall,” said CREB® chief economist Ann-Marie Lurie. “Demand is also falling faster than supply. This is keeping the market in buyers’ territory and weighing on prices.”

Sales activity eased across all price ranges, but the largest declines were for homes priced above $600,000. With a greater share of the sales occurring in the lower price ranges, the average price decline was more than eight percent. Prices for the average home are also declining, reflected by the benchmark price, which fell by nearly two percent compared to last year.

New listings this month totaled 1,425 units, a decline of 54 percent compared to last year. Inventories also declined, but with 5,565 units available, they remained high enough to push the months of supply above nine months.

The economic impact of the situation is significant and early indications point toward more job losses and higher unemployment rates. Several government incentives will help cushion the blow, but challenges in the housing market are expected to persist throughout this year

Housing Market Facts

Detached Sector

• Detached sales eased by 15 percent this month, driven by pullbacks in all districts except the North, which remained flat compared to last year.
• The decline in sales was met with a larger decline in new listings, causing inventories to fall by 17 percent and keeping the months of supply slightly lower than last year’s levels.
• Detached benchmark prices have remained relatively unchanged compared to last year at $480,800.Price declines this month continue to be the highest for the City Centre, North East and West districts.

COVID-19 Weighing on Housing Market

After a strong start to 2020, economic conditions have dramatically changed, as COVID-19 is impacting all aspects of society. The economic impact is starting to be felt across many industries. This includes the housing market.

March sales activity started the month strong, but quickly changed, as concerns regarding the spread of COVID 19 brought about social distancing measures. This had a heavy impact on businesses and employment.

“This is an unprecedented time with a significant amount of uncertainty coming from both the wide impact of the pandemic and dramatic shift in the energy sector. It is not a surprise to see these concerns also weigh on the housing market,” said CREB® chief economist Ann-Marie Lurie. By the end of March, sales activity had fallen 11 percent compared to last year. This is 37 percent lower than long-term averages. The drop in sales pushed March levels to the lowest recorded since 1995.

“The impact on the housing market will likely persist over the next several quarters,” said Lurie. “However, measures put in place by the government to help support homeowners through this time of job and income loss will help prevent more significant impacts in the housing market.” New listings dropped by 19 percent this month. This decline in new listings compared to sales caused supply levels to ease and helped prevent a larger increase in oversupply. Overall, the months of supply remain just below five months, similar to levels recorded last year.

Prices were already forecasted to ease this year due to oversupply in our market. In March, the citywide benchmark price was $417,400. This is nearly one percent lower than last year’s levels. The reduction in both sales and new listings should help prevent significant price declines in our market. However, price declines will likely be higher than originally expected due to the combined impact of the pandemic and energy sector crisis.

Housing Market Facts

Detached Sector

• Detached sales eased by 15 percent this month, driven by pullbacks in all districts except the North, which remained flat compared to last year.
• The decline in sales was met with a larger decline in new listings, causing inventories to fall by 17 percent and keeping the months of supply slightly lower than last year’s levels.
• Detached benchmark prices have remained relatively unchanged compared to last year at $480,800. Price declines this month continue to be the highest for the City Centre, North East and West districts.