As I speculated back in November, January definitely saw a number of home sellers putting their homes up for sale in January to try to take advantage of significant price gains in 2014. As expected we saw a whole slew of listings hit the market earlier than normal – even for Calgary (which has a spring market that actually starts in February and runs to May).
The unfortunate timing of announcements of layoffs in the oil and gas and retail industries in mid-January really spooked a lot of potential buyers. Many are still waiting to see if buying now is the right time. In typical fashion the media has taken a situation and sensationalized it – making it a somewhat self-fulfilling prophecy.
This, combined with the large influx of new listings, forced quite a number of home sellers to change their strategy of "profit-taking" and reposition their price to get market-value instead of trying to push the envelope for pricing similar to the strategy home sellers used for most of 2014. Homes just weren't selling in January. Buyers were somewhat paralized by the media reports of short-term doom and gloom.
The good news for Calgary homeowners, home sellers and homebuyers is that we have started that long journey out of that abyss created out of that over-sensationalization. Homebuyers appear to have started to reawaken and realize the real estate is a long-term endeavour and no-one should be buying a home for short-term speculation. Homes are shelter first and foremost, and then (through a capital-gains exemption and leverage through mortgages) can be a relatively stable investment.
After just 3 weeks of February, the number of sales in Calgary outpaced January sales and, as predicted, also remained above its average sales price (by about $2,000).
The February stats are now in and finalized for the month from the CREB MLS® System. Here is the market snapshot:
- Calgary real estate sales were up 38% over January. Average prices are up 0.3%. And there's only 4.75 months of supply of homes. That's really not too bad! In fact, that is pretty darn good! The market is stabilizing.
- Northwest zone: 4.6 months of supply; sales +44%; prices +3.6%
- Northeast zone: 4.1 months of supply; sales +12%; prices -0.4%
- Southwest zone: 6.2 months of supply; sales +32%; prices -2.0%
- Southeast zone: 3.6 months of supply; sales +62%; prices -4.4%
(all versus January 2015)
...and Northwest zone also remains above Feb's 2014 prices. That's not an easy feat given the amount of inventory puts the zone just into "buyers' market" territory.
As hoped, prices are not growing at last year's pace and, more importantly, there a lot of selection of homes. This is really good for both buyers and sellers.
I expect to see selling prices in southwest Calgary (often said to be an overpriced part of the city) to correct some more.
Now let's see what the media is going to say... "Sales are at their lowest since 2009 and prices are falling!" Oh come on... Last year (2014) was an AWESOME year for the number of sales (+9%) and price gains (+5.8%).
Life is good!