Calgary Real Estate Market Statistics January 2016
Picking up where things ended last year, the Calgary housing market has pushed further into becoming a buyers’ market in January. While a number of factors are contributing to the current market trend, troubles within the energy sector continue to be the biggest factor leading to the change in market conditions.
The Energy Market Impacts Sales
With prices recently sliding within the energy market, uncertainty within the energy sector continues to grow. Troubles within the energy sector have led to a soft labor market, which has placed additional stress on the local economy as well as the housing market. Namely, a dwindling labor market has resulted in less demand for housing in Calgary, resulting in only 763 units sold during the month of January. These figures are 13 percent below the previous year and 43 percent below long-term averages. Not surprisingly, new listings also fell in January, which posted a 16 percent drop. Nonetheless, the number of new listings put on the market still outpaced the number of sales, thereby resulting in an increase in inventory. By the end of the month, the citywide inventory for Calgary reached the 6 month mark.
As sales have fallen and inventory has increased, benchmark prices have taken a hit. With the aggregate benchmark price posting at $447,300, the price fell by 1.21 percent when compared to the previous month and by 3.27 percent when comparing year-to-year data. This drop has not, however, negated the price increases that were experienced in 2014, as the January 2016 benchmark price is still 4.41 percent above the January 2014 benchmark price.
Overall, the apartment sector has experienced the greatest drop in benchmark prices, having reached $281,900 in January. This represents a drop of 6.35 when comparing year-to-year data and a 2.12 percent drop when compared to the previous month. The detached segment is showing variations within the market depending on the price range of the product. While the under $500,000 segment has remained somewhat balanced, the $500,000 to $600,000 range market appears to be weakening.
With inventory on the rise in Calgary, buyers are now able to select from a wide variety of housing options. Similarly, with prices dropping, buyers are finding housing to be far more affordable in Calgary. When combined with the low interest rates, some potential buyers are starting to take a look at what is available. So far, this has not resulted in an increase in sales activity, as many buyers appear to be waiting for prices to take an even sharper cut. As such, the Calgary housing market continues to face challenges as sellers continue to look at their options and buyers are forced to carefully consider their future plans and lifestyle choices.