Unemployment impacting housing activity
Home prices declined further in March as economic conditions weigh on Calgary’s housing market.
Calgary’s benchmark price totaled $442,800 in March, a 0.49 percent decline over February and 3.51 percent lower than levels recorded last year.
“With no improvement in the labour market, it’s no surprise that we continue to face downward pressure on housing sales activity and prices,” said CREB® chief economist Ann-Marie Lurie.
“Provincial unemployment rates are at the highest level recorded since the early ‘90s,” said Lurie, adding that Calgary’s unemployment rate in February rose to 8.4 percent, which is higher than the provincial average of 7.9 per cent.
March home sales in Calgary totaled 1,588 units, 11 percent below the same time last year and 28 percent lower than long-term averages for the month.
Calgary also saw housing supply gains in most price ranges. Inventory levels rose by seven per cent to 6,084 units in March. Overall, months of supply has averaged five months in the first quarter of 2016.
“As we move into spring, we are starting to see more foot traffic at open houses and showings from potential buyers,” said CREB® president Cliff Stevenson. “For now, this activity hasn’t translated into improved sales in most segments of the market.”
The apartment sector has been the hardest hit by the recent downturn. After the first quarter of the year, apartment sales totaled 554 units, a 17 percent decline over the same period last year.
Apartment benchmark prices have been trending down since late 2014. In March, benchmark apartment prices totaled $281,300, seven per cent lower than levels recorded prior to the slide and 4.93 per cent lower than levels recorded last year.
The detached and attached sector has also felt the brunt of Calgary’s weakening economy. Detached and attached home prices have dropped by four percent from the recent peak.
“Homebuyers continue to wait and see if there are going to be further declines in home prices before making an offer,” said Stevenson. “Timing the bottom of the market is proving to be quite a challenge in the housing market we are faced with now.”