For the past 10 years in Calgary, the number of house & condo sales per month rises from January through the spring months, peaking in either May or June. Every year.
Then comes 2020.
January, February and the first half of March continued that normal spring trend. But then the world stopped and the number of sales in April dropped 63% from the previous April and over 50% from March to April.
May saw a pickup in the number of showings, listings and sales and our total sales number jumped from a dismal 572 in April to 1,079 in May.
June saw an even bigger shift back to normalcy, with 1,747 sales in Calgary. This is just 2% lower than June 2019.
Unlike other investments, prices in real estate don’t move as quickly. It takes time for average, median or benchmark prices to make swings. The transaction time period is long, unlike the split-second click of a button to sell a stock. So from January to June of this year, prices for all residential types have only dropped 1%.
From June 2019 to June 2020, prices have dropped about 3%.
From our peak prices back in 2014, prices overall are down about 12%. Detached homes have fared the best, dropping just under 10% from their peak, while apartment-style condos have dropped the furthest at nearly 20% from their peak.
This can be attributed in part to the oversupply of condos on the market, both resale and new construction. But it may also be that condo owners are more likely to be young and single, so a job loss can hit hard. Some condo owners are also pessimistic about how long it will take to return to higher prices so are simply taking a big loss to allow them to move on in life.
Life does move on, even during a pandemic. We are seeing homebuyers and homesellers that are ready to make a move for a variety of reasons, not all of them related to job losses or the economy. Sometimes people relocate out of province for a better job, retire and downsize, move in with a partner, break up with a partner, or have another baby. These things don’t stop happening.
Our industry has shifted to accommodate these times with virtual tours becoming commonplace. I’m carting a full PPE kit in my car so that we can safely look inside people’s homes. Buyers are being more selective about which properties they view and are seriously considering their options based on information available online. Sellers are carefully preparing their homes for sale and are pricing according to today’s market, not what it was in the past.
It’s a new world out there but it is still a world with solutions. If you call us to list your home, you may not be thrilled with the market value we present you with. But we can help you move forward.