Inventories rise as sales activity softens further

Following four months of relative stability, unadjusted benchmark prices eased as expected in September to $456,100, a 0.26 per cent decline compared with last year.

Most of this aggregate moderation was due to price declines in the apartment sector brought on by higher-than-average inventory levels.

"Overall sales activity relative to new listings caused a softening in absorption rates, which resulted in inventory gains and ultimately placed moderate downward pressure on pricing," said CREB® chief economist Ann-Marie Lurie.

August sales activity falls below long-term averages

Calgary's residential resale housing market recorded further easing in absorption rates in August due to weaker sales activity.

Sales in the city declined by 27 per cent to 1,643 units last month relative to the same time last year and 12 per cent below 10-year averages.

"Persistent weakness in the energy sector weighed on sales activity this month, which once again retracted to levels well below the norm for the city," said CREB® chief economist Ann-Marie Lurie.

Supply gain in apartment sector threatens to impact price

Declines in residential housing sales activity eased in July, creating, when combined with stable inventory levels, no change to the month-over-month price.

Year-over-year sales fell by 14 per cent to 1,995 units in July, compared to a 17.8 per cent decrease the previous month. Despite the decline, sales activity during the month was consistent with the 10-year average.

While sales decline eased, so too did the decline in new listings, causing the unadjusted sales-to-new listings ratio to edge down to 67 per cent in July and months of supply to increase to 2.53 months.

Prices expected to remain stable

Continued weakness in housing demand will limit downward pressure on supply levels and cause prices to ease in the second half of the year, CREB® said in its 2015 mid-year forecast. Despite this anticipated retraction, Calgary's benchmark prices are only expected to decline by less than one per cent on an annual basis.

"Further job losses are expected in the second half of the year," said CREB® chief economist Ann-Marie Lurie. "These employment changes combined with overall weakness and slower than anticipated recovery of oil prices is expected to keep housing demand relatively weak for the rest of 2015. However, with the initial shock of oil price declines having dissipated, the pullback in sales activity in the second quarter is not expected to be as dramatic as the first part of the year," said Lurie.

Overall sales activity in the city of Calgary is forecasted to total 19,780 in 2015, a 22 per cent decline relative to last year, but only six per cent lower than average activity over the past five years.

Resale market impacting housing starts outlook

The sound of hammers has quieted in Calgary.

Following a record-breaking year for new home construction in the city, the pace has slowed considerably in 2015.

Through the first five months of year, the number of new homes starts in Calgary has numbered 3,954 – a 32.5 per cent drop from the same period in 2014.

The decline was even more dramatic in April, with just 777 homes breaking ground during the month compared to 1,952 during the same time last year – a decline of more than 50 per cent.

Improved sales to new listings ratio reduces inventory gains

After the fifth consecutive monthly benchmark price decline in Calgary, the number of new home listings eased to 3,064 units in April, an 18 per cent decrease over the previous year.

"With fewer buyers making purchase decisions and improved selection for resale, new home and rental property, sellers have been either adjusting their expectations on price or delaying their plans about when to list their home," said CREB® president Corinne Lyall.

Longevity key to housing market during oil price recovery: CREB

It's still too early to tell how Calgary's resale housing market will respond to recent gains in the price of oil, said CREB® chief economist Ann-Marie Lurie.

"We have to see how long – if [oil prices] continue to move up, how much it moves up, when it stops ... That's what we're looking for. So it is still too early," she said.

After significant declines starting in October, oil prices started to see some improvements recently before another slight drop this week. West Texas Intermediate, a U.S. grade of oil used a benchmark for North American oil prices was just over $53 US a barrel this week after dropping to near $40 earlier this year and is off 43.32 per cent compared to the same time last year.

Improving inventories help ease price growth pressure

Calgary's residential resale housing market posted relatively strong November activity reaching 1,782 units, a three per cent increase over the previous year, and nearly 13 per cent above long term averages.

"Relative to other major centres, economic growth in Calgary remains one of the strongest in the country," said CREB® chief economist Ann-Marie Lurie. "Employment opportunities and relatively higher wages have encouraged people to move here, supporting the demand growth in our housing sector."

Meanwhile, new listings growth continues to outpace the gains in sales, supporting a 22 per cent year-over-year rise in November inventories to 3,849 units. While inventories have recorded significant gains, they remain below long-term averages for the month.

How the future of oil and gas in Alberta will affect Calgary's housing market

The plummeting price of oil is unlikely to affect Calgary's housing market in the immediate future, but a prolonged slump could eventually leave its mark on the local landscape, say Canadian economists.

"If the recent slide in oil prices turns down the migration taps, construction activity could begin to soften again in Calgary," said BMO senior economist Robert Kavcic, noting that, in the interim, Calgary's housing market remains red hot.

Mid-year forecast calling for more supply, added choices

Mario DeMarco thought he was prepared for anything after deciding to become a first-time homeowner.

The 25-year-old Calgarian has spent the past two years saving for a down payment, and was recently promoted at work, giving him the financial stability to purchase his own place – ideally a condo in the Beltline.