Market Report: April 2020

COVID-19 Contributes to Steep Sales Decline

Calgary, AB – April was the first month where social distancing measures were in place for the entire month, and to no surprise it impacted housing activity. Provincial sales declined by 57 per cent in April compared to last year. With sales totalling 2,247 units, this is the slowest April since 1986.

“Social distancing measures combined with record low Canadian oil prices has impacted confidence and sales activity throughout the province,” says Ann-Marie Lurie, AREA Chief Economist. “While supply levels have also eased, it was not enough to prevent downward price pressure this month.”

More supply relative to demand weighed on prices as average prices trended down from the previous month and was over seven per cent lower than last year’s levels. Some of the price decline is related to more sales occurring in lower price ranges.

As social distancing measures start to ease, we could see the decline in sales ease. However, weakness in the housing market is expected to persist for the remainder of the year as challenges in the energy sector are expected to contribute to significant declines in the overall economy.

Regional Breakdown

Calgary Region

Both April sales and new listings declined in the Calgary region. However, the reduction in supply was not enough to outweigh the 60 per cent decline in sales, pushing the months of supply up to almost 10 months.

This market was oversupplied prior to the COVID-19 crisis, and the recent gain in oversupply is weighing on prices. However, some of the decline is due to a shift in the composition of sales with most of the sales occurring in the lower price ranges.

Edmonton Region
Regional sales eased by nearly 55 per cent for a total of 846 sales. The decline was met with a pullback in new listings and overall inventories were 19 per cent below last year’s levels.

While prices did ease, the pace of the year-over-year decline was not as steep as levels recorded in Calgary. This, in part, is related to the distribution of sales. Sales declined across all price ranges but instead of the largest declines occurring in the upper end of the market, it happened in the mid-range, preventing a more significant price decline.

Central Alberta
Housing sales activity in the region declined at a slower rate than both Calgary and Edmonton at 47 per cent. Yet, at the same time, prices in the area recorded a year-over-year decline of over 13 per cent.

This, in part, can be related to a shift in distribution caused by more homes being sold in the lower price ranges. In fact, when considering price adjustments, homes in the mid-range of the spectrum have not changed significantly compared to the previous year.

Fort McMurray
The combination of COVID-19, the oil price crash, and a flood caused sales in the region to fall to a mere 25 units, or a decline of 81 per cent compared to last year. The significant reduction makes it the worst April since data was tracked in 2000. Meanwhile, new listings only fell by 63 per cent, preventing more significant inventory declines.

Prices trended down this month and average prices sat over 10 per cent below last year’s levels. However, some of the decline is related to the steeper pullback in sales in the upper end of the market.

Grande Prairie
Sales in the region fell by 55 per cent for a total of 107 units. At the same time, new listings eased by 33 per cent. Despite the pullback in new listings, it was not enough to cause any reductions in inventory levels which remained slightly higher than last year with 1,710 units

Despite the growing amount of supply compared to demand, prices continued to trend up. This could be related to some higher priced transactions occurring, and a higher pullback in sales in some of the lower price ranges.

Lethbridge
Sales in Lethbridge eased by 43 per cent for a total of 135 sales. Meanwhile, new listings also eased to 313 units. The decline in new listings was not high enough to prevent inventories from rising.

Despite inventory gains relative to sales, median prices managed to remain relatively stable. While average prices fell compared to the previous year, this can be related to declines at the higher end of the market.

Medicine Hat
Sales in the region were slowing prior to any impact cause from COVID-19. However, April sales eased by 55 per cent to 45 units. While new listings eased, it was not enough to cause any significant change in inventory levels which remained at 613 units. This caused the months of supply to rise to 14 months.

Overall, both the median and average prices were trending down compared to previous months, however, compared to last year, average prices remain relatively flat while median prices declined by nine per cent. While more activity is occurring in the lower price ranges, several higher priced sales is likely keeping average prices stable.

Alberta West

Economic conditions in the region vary significantly. As the housing statistics are compiled for the entire region, figures may not accurately reflect conditions in the local market.

Sales in the region eased by nearly 63 per cent for a total of 46 units. The decline occurred in all price ranges, but the largest drop appears be for homes price over $500,000. However, unlike most other regions, the drop in new listings is outpacing the decline in sales. If this trend continues, it will help reduce the inventory preventing more significant future price declines.

Lloydminster
Sales eased by nearly 45 per cent in April. However, the decline in new listings outpaced the decline in sales at 49 percent, contributing to easing inventories in the market. Prior to COVID-19, this market has struggled with relatively higher levels of supply compared to demand and this month is no different. The persistent oversupply continues to weigh on prices which remain well below last year’s levels.

South Central Alberta
Sales were easing prior to COVID-19 in the region, but April’s decline was more significant with a 32 per cent retraction. At the same time, new listings also recorded a significant decline bringing inventory levels down to 382 units. Meanwhile we have divergent trends for prices where median prices rose, and average prices declined. The rise in median price is related to a shift in the distribution with more product being sold in the upper ranges. However, average prices have eased for each price range, contributing to the one per cent pullback.

Visit our Statistics page for more Alberta housing insights.