July 4th! Happy Independence Day to our American friends. I hope you had an amazing Canada Day weekend, and are all geared up for the start of Stampede 2019 tomorrow!
Let's dive right into it...The market is what the market is.....a buyer's market. The total number of homes that changed hands in June 2019 was down another 6% over June 2018, a trend we have seen continue for the past 18 months. The good news is the drops aren't as drastic as they were last year compared to the year before.
Benchmark prices have dropped again year over year by another 4%, leaving us around $425,000.00 in the city. A far cry from where we were 5 years ago.
The best news is that inventory has actually declined by 13% due to more people holding off listing their homes. Further good news is that homes priced under $500,000.00 are seeing more balanced sales conditions, however, if you are over $500,000.00 it's a tough market to find a buyer in.
OUR STREET VIEW
I'm not surprised that new listings are way down. Remember that most people get talked into 5 year mortgages when they buy a new home...5 years ago the market was on fire, and there was a buying frenzy here. A lot of those mortgages come due this year, which is when people typically start thinking of moving. However, with prices dropping as much as they have, people just can't afford to sell right now. They are losing way too much money. For every 4 listing presentations we are doing, I would say 1 person can actually afford to sell without losing a ton of money. Tough market for sure.
On the buying side, there are deals to be had. Prices are substantially off of 5 years ago, and sellers are starting to get the message that price is king. Now, as a buyer, if a house is listed correctly it should sell within 4% of list price. You can't expect to go in and steal something for 10-15% off. That just doesn't happen. Those discounts are already factored in to the current market. You have to think about the total saving you are getting from the peak of the market 5 years ago, compared to today....not what the house is listed for today, and then asking for another 25% off. You'll never buy a house if that is your mindset. Be realistic, have a long term strategy, and buying in this market could pay off big time down the road.
I hope you have a great Stampede, and a fantastic July! Thanks, as always, for taking the time to read.
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HOUSING MARKET FACTS
- Detached sales in June declined by nine per cent compared to last year, causing year-to-date sales to ease by nearly three per cent. The decline in sales was mostly driven by homes priced above $500,000.
- Detached homes priced under $500,000 have recorded improvements in sales and oversupply reductions. The tightening in the lower end of the market will likely start to support price growth in this sector of the market.
- Despite city wide year-to-date sales declines, activity improved in both the South and North West districts of the city. Sales did ease across other districts, but in some of the most affordable districts (North East and East) supply-to-demand ratios are improving compared to last year. This is pushing those markets toward more balanced conditions.
- Despite slower sales activity, the amount of inventory declined by nearly 18 per cent. The reduction in inventories occurred throughout all districts.
- Prices have remained relatively stable over the past few months, with some modest monthly improvements. However, the oversupply scenario has left prices nearly four per cent below last year’s levels.
- Apartment condominium sales eased in June, causing year-to-date sales to total 1,292 units. This is over seven per cent below last year’s levels. Over the same time frame, new listings eased by over 15 per cent, helping reduce some of the resale inventory in the market.
- Resale inventory levels have declined, but the months of supply continue to remain elevated at 6.8 months. Combined with elevated inventories in the competing rental and new-home markets, this continues to weigh on resale pricing.
- June’s benchmark price was $250,200, three per cent below last year’s levels. This is resulting in a total price adjustment of over 17 per cent since 2014.
- Unlike other property types, sales activity for attached product continued to improve in June. Year-to-date sales total 1,955 units, nearly three per cent above last year’s levels. Improvements were driven mostly by growth in demand for semi-detached product. Attached sales improved across all districts except the North West and West.
- New listings have eased compared to last year, which is starting to reduce oversupply in the market. Like all other sectors, the attached market remains oversupplied and this is impacting prices.
- June’s benchmark prices were $399,700 for semi-detached and $286,300 for row product. Respectively, this represents year-over-year declines of 3.3 and 5.4 per cent.
REGIONAL MARKET FACTS
- After the first half of the year, sales activity remained relatively stable. New listings have declined, which is helping to reduce the amount of inventory on the market and move towards more balanced conditions.
- The market may be trending towards more balanced conditions, but oversupply continues to weigh on prices. The benchmark price was $334,800 in June, comparable to last month, but nearly three per cent below last year’s levels.
- Sales activity in the area remained relatively stable compared to last year and consistent with longer-term trends. New listings have eased, helping to reduce inventory in the market and the amount of oversupply.
- Despite some recent adjustments, the market continues to favour the buyer, placing downward pressure on prices. The benchmark price was $404,000 in June, similar to last month and over five per cent below last year’s levels.
- Sales have remained stable compared to last year, but they are still below longer-term averages. However, new listings are starting to adjust, which is continuing to push down inventory levels and cause the market to move towards more balanced conditions.
- As the market moves towards more balanced conditions, this should help create more stability in pricing. As of June, benchmark prices were $414,900, 1.6 per cent higher than last month, but still 4.1 per cent below last year’s levels.