THE SALES SUMMARY
So, if you’ve watched my updates the last few months, sales have gone like this…
April: To nobody’s surprise, we saw sales come to a near halt during the worst weeks of our pandemic.
May: The month started slow and built strong momentum in the back half. We ended up about 40% behind 2019’s numbers.
June: The momentum continued and we saw a strong month, all things considered. We ended up basically equal to 2019’s numbers.
The pent-up demand from April and May made its mark in June, which seasonally is always our biggest-selling month. But, with all the uncertainty, talk of a second wave coming and the continued economic stresses on our country, province and city, would there be enough energy left to continue with another strong month?
And I’m happy to report that yes, there was. July saw us surpass last July’s sales figures by about 12%. And we saw an increase in total sales from June’s total. Normally we start dropping off in July. So, it’s fair to say that Calgarians are still in need of homes, want to buy homes, and are capable of buying homes. This is very good news.
Each market segment is acting quite differently right now. So much so that I’ve started down a new path of micro- analyzing each segment and will have some additional insights next month about our detached, apartment, townhouse and semi-detached markets that you won’t be able to find anywhere else.
Let me show you how the month went – it was a bit of a roller coaster. This graph shows how our weekly sales have performed in relation to the same week in 2019.
We rode really high as we came out of June, and you can see our graph was in the positive – meaning that we were above zero on this graph and ahead of last year’s numbers.
Then you see we had a little blip into negative territory, and then an even bigger blip. During this period we had something really cool happen. Our real estate board in Calgary did a tech migration of all our data with 8 other real estate boards in the province. That now gives us the ability to help you with property searches and sold data everywhere in Alberta (with Edmonton’s board being the only holdout).
The migration didn’t go smoothly and many search results and property searches needed to be completely overhauled across the province. This impacted sales because people had problems searching the listings for about a week’s time.
But, as you can see, once things sorted themselves out and the tech teams and realtors got fully caught up, sales resumed – and did so in a hurry. The last two weeks of July were very strong and far outpaced the same time period last year.
So, the questions for us are how long will this momentum continue and will we continue to see this wave of pent-up demand push through August? Only time will tell.
One indicator we have for this is the number of showings currently happening. Take a look at this graph…
The orange line is the 2020 weekly average of showings and the blue represents last year’s pace. Do you see the gap between this summer and last? It’s huge!
Right now we are continuing to see a much higher number of showings than durng this same period last year. This provides us with an indication that there remains a high interest to purchase, at least through the month of August and into the early fall.
So, for now I’m optimistic about the strength of the market.
THE INVENTORY STORY
In July we continued the trend from the month before, which was a rush of new inventory. June saw a large increase in inventory across all property types from those who were holding off during the uncertainty of the months prior. July started out in the same way, with more new inventory coming onto the market than we were seeing last year.
Again, those numbers above zero indicate a higher amount than last year.
But since the middle of the month that rush has slowed down, and for the last 2 weeks of July our amount of new listings to market was less than that 2 week period in 2019.
This is good news.
The amount of new product that was coming to market was going to quickly shift the “healthy market pendulum” to a more negative position if the pace hadn’t slowed down. And it did, so that gets a “thumbs up” from me.
You can see that the “New Listing” growth was moving our total inventory closer and closer to last year’s numbers. We really don’t want that – we want as big of a buffer from 2019’s numbers as possible.
At the end of July we were sitting with about 11% fewer total properties on the market – about 750 homes – than we were at that time last year.
There is plenty of inventory for buyers to choose from, so if the goal is to maintain our average pricing and see no further price declines, let’s hope this easing of new properties to market continues.
THE PRICING PICTURE
So, I’ve painted you the full picture… Year-over-year sales in the month of July increased. Check! Inventory remains 11% below last year’s numbers. Check!
Both those elements combined resulted in the following pricing changes:
Total Market:
Year-over-year -1.21
Month-to-month 1.6
Detached:
Year-over-year 0.33
Month-to-month 2.32
Row:
Year-over-year -8.73
Month-to-month -1.35
Semi Detached:
Year-over-year -2.81
Month-to-month 1.48
Apartment:
Year-over-year -2.72
Month-to-month 1.04
If thee numbers continue for the month of August, as they are right now, we can expect about the same result. Maybe even a modest month-over-increase, but time will tell.
Okay, that wraps up the detailed analysis on the market. Now I’m going to adjust to my quick pieces of advice for buyers, sellers and investors.
ADVISE FOR BUYERS
Buyers continuing to look now, and especially those coming to the market for the first time, will be experiencing a market that is moving faster than they’d expected as we continue to deal with the pandemic, summer vacations and the economic fragility of our current economy.
I want to prove this in a way that our stats packages don’t show. The following graph shows the “Real Time” pace of the market.
When a market is healthy and performing well, the number of sales that occur relative to the number of new listings that are coming to market matters. The higher this ratio of sales to new listings, the stronger the market.
This graphs shows how each week has gone since the middle part of May…
During the hottest periods of our markets we see the peaks. For example, we saw an uptick in May when Premier Kenney announced the re-opening. We saw another peak as our pent-up buyer demand came back with a vengeance in June. And now we are seeing a consistent growth in this ratio.
At the end of July we were experiencing a very healthy Weekly Sales / Weekly Listings ratio!
And it wasn’t just a random good day versus bad day. I wanted to trend out a full week’s worth of transactions to provide the most accurate picture of this.
And I’m here to tell you that our market is very healthy right now. We are absorbing nearly 70% of all listings that are coming to market. The end of July had the second highest weekly ratio of the year, preceded by the 3rd.
So, if you are a buyer and if the property is right for you – be ready to act!
Sellers are getting the message – realtors, too – and well-priced homes are getting snapped up and sold.
ADVISE FOR SELLERS
The following graph should provide you with a lot of hope and optimism. These are the real-time results that can give you all the confidence you need to take advantage of this opportunity – be it one we didn’t really expect – price well, and “get your move on” to your next life move.
This graph is broken down by the number of days it has taken for homes to sell over the last 30 days.
What do you notice? The best prices are being achieved early in the listing!
You’ve heard this before, but I wanted to prove it again with real time data. Sellers are achieving an average of 98.5% of list price in the first 10 days. Then it drops by 1% – or about $4,500 (based on average sale prices in Calgary) – for each of the next 10 day periods until we flatten out around 96% of asking price about 40 days after listing.
So, take this unexpected opportunity in the midst of the pandemic and in the middle of our summer – when real estate action typically slows, but isn’t this year – price it fair (not aspirational) and make your life plans happen! If you don’t, you’ll sit. You’ll need to drop your price and you will end up the king or queen of Frustrationville. I don’t want you to be in that place.
ADVISE FOR INVESTORS
Take a look at that last graph again – Sold Price to List Price Ratio.
Know what you’re seeing there and understand the math as you see new “right fit” properties hit the market. That will allow you to set your expectations and make strategic decisions around it.
Let me present this information in another way.
In this graph you see the following:
10% of homes are selling in the first 10 days
25% of homes are selling in between 11 and 20 days 15% of homes are selling in between 21 and 30 days.
This shows that half of our market’s sales are happening under 30 days right now. And our average Days on Market (DOM) is over 50. So, as a result, you won’t be achieving bargain pricing here at all. And you’ll be competing for well-priced gems.
But there is still 1/3rd of all listings that are selling after spending at least 50 days on the market. This is your target. This is where sellers have entered “Frustrationville” and you have an opportunity for an opportunity. And this is also where the average Sales Price / Listing Price ratio has fallen below 96%. So be smart, be realistic and pinpoint your targets.
Well, that’s it for another month. Thank you for your attention, especially if you made it this far. I hope this provided you with value and a different perspective than you may have gotten from the headlines. I would love to receive your thoughts and questions. I answer every single one.
