This breakdown has been a bit of a harder one to write compared to my past posts. Not because the market has changed so significantly, but just with all that is happening in the world right now, it's hard to focus on real estate.
I just want to take a moment and acknowledge that if you have family abroad that are dealing with war raging through their countries, our family's thoughts and prayers are with you and them. If you are dealing with the fierce fires or have loved ones that have had to evacuate, we hope they are safe and can return home soon.
I came across this speech that, when I listened to it, really helped and gave a little bit of hope in these times. It helped me and I hope can help you as well.
If you haven't been here before, I'm Aly. I'm a local Calgary real estate agent and have been serving Calgary and the surrounding areas for the past 6 years.
Now, onto the market and how we have been doing these past two weeks.
So far, with half the month behind us, we are starting to see a clearer picture of where the month may end up compared to others. Below are some of the stats I look at when trying to forecast the month of activity.
Number of new listings in the month so far compared to new listings the previous month
the number of sales we have had this month so far.
When I look at these two performance indicators, I use the averaging model to forecast out for the month the number of new listings and sales we can expect.
When breakdown these two stats, we find that compared to last month we are:
Down 4% in the number of new listings coming onto the market this month compared to last month (3,290 in July vs. 3174 projected in August)
Sales are down 3% from last month as well (2,320 in July vs. 2,254 projected in August)
What these two indicators show is that we are on pace to keep the same, if not slightly lower absorption rate going into August from July (33% in July). Because these two stats are both slowing and are inversely related, they will maintain the rate of absorption for the city of Calgary.
The Pressure Is On
The reason for the decline in our market so far has been us coming down from the immense scarcity in the market we had seen in the early part of this year. We have been seeing listings decline and sales increase by nearly 1,200 each month in the spring months. Now that we are reopening, more sellers are ready to accept viewings, flooding the market with inventory.
Sales are still very much higher than they were for the last two years and are continuing to outpace sellers that are trying to bring their home to market...for the time being.
So what is slowing us down?
Elections, the summer, stress tests, reopening, the economy. Your pick!
With the announcements of both civic elections and now federal elections, consumers are worried about how these elections might impact their home values. On the civic side, we have a city that needs to garner up revenue, and property taxes are a stream to do so. On the federal side, we have different parties with completely different ideas of how to manage the market. From keeping their fingers in with stress tests to being completely out of it. We also hear rumors during this time of things like capital gains tax on primary residences.
Elections scare consumers, and this will slow the market.
The reopening, whether being a good idea or not is up for debate but nonetheless, consumers are enjoying their freedom in the summer and are not focused on purchasing their next home. We see this each year around this time with the seasonality of the market. However, if you are thinking of selling, remember what I mentioned above, we are seeing way more buyers this year than in the last two years. Now is the best time to consider a sale if you haven't done so already.
So should we expect the market to stay relatively soft for the near future, yes. If the absorption rates decline back to high teens to low 20s we will be back into a buyer's market. However, I don't believe we will drop this low, simply due to the amount of inventory not rising to levels that will continue that much of a change.
If you are considering a sale right now or considering a purchase and you'd like to chat about how I can help, feel free to send me an email at firstname.lastname@example.org
Thank you for your time as always.