Market Report: February 2020

Sales growth met with gains in new listings

Calgary, AB – Provincial sales activity jumped more than 11 per cent compared to last year for a total of 3,561 units. Sales activity remains well below longer term trends but is consistent with the lower levels of activity recorded over the past five years.

“While any improvement in sales is welcome news for our market, the gains need to be put in perspective,” says Ann-Marie Lurie, AREA Chief Economist. “Last February, sales were among the lowest levels recorded since the late 90s. This combined with the extra day in February contributed to the double-digit gain.”

Sales growth was met with gains in new listings this month, preventing any significant changes in both inventory levels and average prices compared to last year. However, activity varied significantly across the province.

While the province continues to face several economic challenges, housing market improvements in the larger cities are generally supporting modest reductions in supply relative to demand, which is starting to generate more stability in prices.

Regional Breakdown

Calgary Region
Following weak activity last year, year-over-year sales growth neared 20 per cent. The strong growth helped offset the gains in new listings, ensuring further reductions in inventory levels compared to last year.

Reductions in supply and improvements in sales helped reduce the oversupply in the market, easing the downward pressure on prices. Nonetheless, prices continue to remain just below last year’s levels.

Edmonton Region
Following a slow start to the year, sales activity improved by eight per cent this month compared to last year. The gains in monthly sales was also met with a gain in new listings, but the new listings growth was not enough to derail the trends of year-over-year reductions in inventory that have occurred for 11 consecutive months.

The reductions in inventory and the improvements in sales are helping reduce the amount of oversupply in the market. While prices have remained relatively flat this month, year-to-date price gains were likely driven by shifts in distribution with more sales occurring in the highest price ranges.

Central Alberta
The extra day in February was not enough to prevent a pullback in February sales as jobs losses and gains in unemployment levels weigh on the market. Sales eased by nearly nine per cent causing year-to-date sales to ease slightly over the previous year. Meanwhile, new listings rose in February, preventing any further reductions in inventories for the month and keeping the months of supply elevated.

Despite the persistent oversupply, average prices remain slightly higher than last year’s levels, likely due to some gains in higher priced home sales. However, median prices did trend down this month.

Fort McMurray
Sales growth continued into February, resulting in the best sales start of the year since 2014. While sales levels remain well below longer term averages, the improvement helped offset the gain in new listings, causing inventories to ease and the amount of oversupply to fall.

At the same time, prices continue to rise, offsetting some of the significant declines that occurred at the start of last year. Despite some price adjustments, prices remain relatively low and far from previous highs.

Grande Prairie
Further gains in new listings this month contributed to the year-to-date rise of over 30 per cent, far outpacing the sales growth of over 12 per cent. This recent jump in new listings caused inventories and the months of supply to generally trend up.

Gains in supply compared to sales is likely contributing to some of the downward pressure on prices. However, some of the price declines could also be related to distribution changes.

Lethbridge
Sales activity surged at the start of the year. With year-to-date sales of 332 units, this is at levels not seen since 2008. However, the growth in sales also came with a jump in new listings, and inventories rose compared to last year’s levels. Despite the gain, the months of supply remains below last year’s levels and slightly higher than average levels seen over the past five years.

Slightly higher than usual months of supply has prevented stronger price growth so far this year, but overall prices continue to remain relatively stable.

Medicine Hat
Year-to-date sales levels are relatively stable compared to last year but remain below long-term averages and are consistent with the lower levels recorded over the previous two years. At the same time, new listings continue to rise, pushing up inventory levels and the months of supply.

Despite indicators showing signs of oversupply in the market, prices have continued to increase. This in part can be related to distribution changes as a larger share of the sales are occurring in some of the higher price ranges.

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 continue to ease while new listings rise, causing higher inventories and gains in the months of supply. The persistence of this trend has started to weigh on median prices which have generally been trending down compared to the previous year. While year-to-date average prices remain over six per cent higher than last year’s levels, this is likely caused by the rising share of higher priced home sales in the region compared to last year.

Lloydminster
Despite the monthly gain, sales continue to trend down in the region. Meanwhile, new listings rose, causing inventory gains and ensuring the market continues to favour the buyer. Even so, prices continue to increase; however, the increase is likely related to a higher share of sales occurring in the higher price ranges of the market.

South Central Alberta
Sales eased slightly compared to last year’s levels, meanwhile both new listings and inventories were higher than the previous year. The recent gains caused the months of supply to increase, but prices continued to improve as a larger share of home sales occurred in higher price ranges.

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