Supply and demand

June brings rise in number of homes sold and listed

Normally associated with a rise in the mercury, the arrival of summer also provided a boost to Calgary's housing market this June.

Driven by continued strong demand amongst buyers, residential sales totaled 2,670 units in June, a 16 per cent increase over last year and 18 per cent above the 10-year average. Along with the rise in sales, the number of homes up for sale also increased in June, as new listings totaled 3,814 units – a year-over-year increase of nine per cent. The rise in listings represents the first time since June 2010 that it outpaced the long-term average.

Given Calgarians were just emerging from the floods the last time summer arrived, CREB® president Bill Kirk said contrasting this June's numbers to those seen last year should be taken with a grain of salt.

"Last June was not a normal month, so it's difficult to compare the two," he said. "The historic floods of 2013 forced residents and business owners from their homes and places of work - it's not surprising that many Calgarians were not focused on purchasing or listing their home at that time."

A better comparison than any month-to-month assessment, sales through the first six months of 2014 have increased to 13,929 from the 12,257 transactions seen last year. The influx of new listings in June also helped ease some of the tightness in the market by improving inventory levels, which totaled 4,726 units compared to 4,584 in June 2013.

"Economic conditions continue to support housing demand growth. However, improving supply
should help push our market toward more balanced conditions," said CREB®Chief Economist Ann-Marie Lurie. "Over time, this will cause price growth to ease from its current levels."

Single-family unadjusted benchmark prices totaled $509,700 in June, a one per cent increase over
the previous month, and a 10.9 per cent increase over June 2013. Single-family sales for June totaled 1,769 units, which outpaced the 10-year average by 10 per cent. The rise in sales activity was largely due to improved new listings. While this helped ease some of the tightness in the market, supply levels continue to fall in this sector.

The boost in single-family new listings for June was largely due to an increase in units listed at more than $500,000 – rising to 1,359 units in June from 954 the year prior.

"With less resale single-family product available in the lower price ranges citywide, this market continues to be fairly competitive," said Kirk. "However, for consumers looking in the higher price ranges, there is often more choice."

One area where buyers can look to for an increasing level of choice is Calgary's condo market. Year-over-year, listings in the condo apartment sector increased by 22.5 per cent in June, while the condo townhome sector saw an 18 per cent gain.

Condominium apartment sales for the first half of 2014 totaled 2,494 units, compared with 2,027 during the same period a year prior. While new listings growth kept pace with sales activity during the first part of the year, it has exceeded sales growth over the past two months, pushing up inventory levels and moving this market into more balanced conditions.

Apartment-style benchmark prices totaled $299,700 in June, a new high in the condominium apartment sector and 13.5 per cent increase over the previous year.
Meanwhile, the benchmark price for townhouse-style units reached 326,000, still shy of previous records.

"As citywide condominium apartment prices have finally recovered from 2007 highs, we would expect this will continue to encourage some listings growth," said Lurie. "However, as this market has moved into more balanced conditions, and if inventories continue to rise, price growth should ease throughout the remainder of the year."