Home sales in August held steady despite the continued impact of COVID-19
In August, total residential sales were relatively stable compared to last year with year-over-year gains in the detached and row sectors, which offset declines in the semi-detached and apartment products.
August sales were reported at 1,573, which in comparison to the past five years remained consistent. Sales activity year-to-date remained almost 13 percent less than last year.
“Recent national reports have shown a bounce back to new record levels over the past several months. Calgary has seen improvements over the lows recorded during the lockdowns but is far from record levels,” said CREB®...
Interest rates in Canada are at an all-time low. Rates are being pushed down by the uncertainty of Covid-19, and they're not expected to be rising anytime soon. The Bank of Canada hinted that interest rates wouldn't rise until 2023.
"Based on the Bank's new forecasts, this implies it has no intention of raising policy rates for several years," states Capital Economics economist Stephen Brown. "While the Bank may eventually raise its central scenario forecasts for growth and inflation, our forecasts are still consistent with the broad message in today's policy statement. That is, despite the huge stimulus, there is little chance that a surge in inflation will justify raising interest rates within the next few years."
What do these historically low-interest rates mean for you?
Great news, if your rate is variable, your rate is predicated on prime, which is set currently at 2.45%. You either have a variable rate of prime (2.45%) minus or plus a spread....
Economic uncertainty continues while detached and semi-detached home sales report an increase
With higher sales for detached and semi-detached properties, July sales total increased over levels last year. Year-to-date sales persist at 15 percent lower than last year's levels, despite the improvements in July.
"There have been improvements relative to the lowest sales levels caused by COVID-19, but it is too early to say things are shifting back to pre-pandemic levels," said CREB® chief economist Ann-Marie Lurie.
"We are still facing record-high unemployment rates, significant government aid, and uncertainty throughout the business community....
Amidst COVID-19 pandemic sales decline by two percent from last year
Following the three months of COVID-19 weighing profoundly on the housing market, June sales activity shows an increase over the previous month, totalling 1,747 units.
Caution continues, as monthly sales are almost two percent less than the activity reported last year. Yet this represents a notable improvement in comparison to the past several months, where declines year-over-year surpassed 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.”
Total of 3,335 new listings in June, which was a six percent increase over...
CMHC Rule Changes Coming for July 2020
Here we go again, more changes to lending, this time the changes will affect high ratio mortgage insurance with CMHC. High ratio mortgages are anyone who is putting down less than 20% on their purchase price. GE (Genworth )and Canada Guaranty are both private mortgage insurance companies and will not be implementing the same changes at the time of this article, but we expect it would be likely to see them follow suit with the changes in the future as it will decrease their risk and exposure.
WHAT will change?
The new rules will lower the debt allowed for a homeowner to take on. So essentially you will qualify...
Impact of COVID-19's on the Calgary housing market continues
In May, Calgary's housing market activity remained slow, though sales surpassed the lows from April, which saw fewer than 600 sales.
May sales totalled 1,080 units, a 44 percent decrease from last year's totals.
"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 have declined in all price ranges, but a more significant percentage of sales are below $500,000.
The drop in inventory in the higher price ranges has not been enough in comparison to the decrease in sales. The months of supply is higher than the already elevated...
Impact of COVID-19 on Calgary real estate market
With social distancing measures in place, the housing market is adjusting to the effects of COVID-19.
April sales were 573 units, a decrease 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."
Eased sales activity seen in all price ranges, but the largest decreases occurred in homes priced over $600,000.
With more of the sales seen in the lower price ranges, the average price decrease was higher than eight percent. Average prices for homes are also declining, indicated by the benchmark price, that dropped by almost two percent in comparison to last year.
New listings for April recorded 1,425 units,...
COVID-19 weighing against the housing market
Following a solid start to 2020, economic circumstances have dramatically shifted, as COVID-19 is affecting all aspects of society.
The economic impact is across many industries, including the housing market.
Sales activity for March began the month strong only quickly turned, as concerns regarding the spread of COVID-19 brought about social distancing measures, which caused a substantial 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.
Home Sales Observe a Boost
This February shows an increase in sales in the double-digits, although last February was one of the lowest activity levels since the late '90s.
With the additional day this February, sales for this month totalled 1,197 units. With these two factors combined resulted in a 23 percent growth over last year, though sales persist well below trends longer-term and are similar to more moderate levels recorded over the past five years.
"However, this should not diminish the fact that conditions are still improving," said CREB® chief economist Ann-Marie Lurie.
"Calgary is continuing to see slow reductions in the amount of oversupply in the market, from modest changes in demand and reductions in supply. This needs to occur before we can see more stability in prices."
The unadjusted benchmark price overall for February was $416,900. Comparable to last month, yet about one percent less than levels last year. Overall, prices continue at almost 11...
2020 starts with a modest increase in sales
The conditions in the housing market continue to follow trends similar to last year, with increases in sales.
Additionally, there have been further reductions in new listings, inventory, and more decreases in prices.
Sales activity in January was 863 units, almost eight percent higher than levels last year. Although sales continued well below January activity reported before 2014, they remain consistent with activity reported in the past five years.
"A persistent slowdown in the energy sector has resulted in a reset in many aspects of our economy. This includes the housing market," said CREB® chief economist Ann-Marie Lurie.
"We continue to see the slow adjustment to more balanced conditions, but it will take time before that starts to translate into price stability."
January unadjusted benchmark prices citywide were $417,100, which is moderately lower than the prior month and almost one percent less than levels last...