Developer Report - February, 2017
Created by Thomas Ferianec on Wednesday February 8th 2017 at 6:33 AM
February 8, 2017 Market Snapshot What a difference a year makes! The first month of 2017 marked improvements in all sectors, despite January typically being a relatively sluggish month for activity. With an overall drop in inventory levels by 18% compared to 2016, current numbers hint towards more balanced conditions in the upcoming months.It is important to remember however, that January 2016 was one of the worst markets we have seen in recent history - so although improved, we still aren’t exactly sitting in hot market territory. Throughout the month of January, our team noticed a substantial increase in showing activity on our listings throughout most sectors, with a ton of activity in mid-January. This is likely due to growing optimism about 2017 and the belief by many that we may have hit the bottom in many sectors. Some of the best news from January is that we are finally seeing some much needed viewing activity in the apartment sector, indicating that the coming months may finally see some long awaited improvement. With increased positivity slowly returning to the oil and gas industry, we are cautiously optimistic that the worst is behind us, and a stronger Calgary market is on the horizon. Mid-late January saw quite a few new listings hit the market, but we expect things to really take off as we head into February, which historically is when we start seeing ample new listings on the market and a greater selection of new properties as we head towards Spring. Our Take – New Infill Market With the first month of the new year officially behind us and buyers’ attention shifting back to the real estate market, the new infill segment faced a slow start to 2017 compared to other sectors, which saw notable improvement in year-over-year numbers. It is important to note, however, that January typically displays slower-than-normal action, and the new infill sector is expected to gain steady momentum as we move into February and inch closer towards the busy Spring season. Welcome relief to builders and sellers alike, the trend of steadily decreasing inventory levels across most segments has shifted from heavy oversupply to more balanced numbers, hinting at better conditions to come in the approaching months. Interesting to note, inventory levels across both the single family and new townhome markets are down approximately 45% from levels seen exactly one year ago at the beginning of 2016. Single family new infills registered 11 sales in January, down from 15 in January of last year, with over half of these sales occurring in price ranges below $1 million. Average months of inventory in the single-family segment across all price ranges sits at just over 13 months - while higher-end price points are seeing some sales activity, we continue to see product over $2 million sit longer with notably less action. Following in a similar fashion, the new townhome market experienced a relatively quiet month with a total of 5 sales in January, all occurring under the $700k price point. Due to the relatively sluggish sales activity witnessed in January, the average months of inventory across all price ranges creeped above 10 months. With the panic and doubt of 2016 behind us and optimism notably on the up-swing, we expect activity to considerably pick-up in the coming months as the Spring market fast approaches. Although low inventory levels in the new infill segment will provide limited options for diligent buyers in the short-term, the recent rise in land acquisition and building activity will slowly begin to translate into improved selection as the year progresses.
CALGARY MLS STATISTICS
SOURCE: STATISTICAL INFORMATION PROVIDED BY THE CALGARY REAL ESTATE BOARD (CREB). GEOGRAPHIC AREA: ALL PROPERTIES LOCATED WITHIN CALGARY CITY LIMITS. BENCHMARK PRICE: PRICE OF THE TYPICAL HOME, BASED ON VALUE CONSUMERS ASSIGN TO VARIOUS ATTRIBUTES. PROPERTY TYPES: INCLUDES BOTH SINGLE AND MULTI FAMILY HOMES. REPORT NOTE: "NEW INFILLS" ARE DEFINED AS HOMES BUILT IN THE INNER-CITY THAT ARE 2014 AND NEWER SOURCE: STATISTICAL INFORMATION OBTAINED FROM MATRIX MLS SYSTEM. GEOGRAPHIC AREA: INNER-CITY COMMUNITIES WITH NEW INFILL DEVELOPMENT. PROPERTY TYPES: INCLUDES ONLY SINGLE FAMILY HOMES. REPORT NOTE: "NEW INFILLS" ARE DEFINED AS HOMES BUILT IN THE INNER-CITY THAT ARE 2014 AND NEWER SOURCE: STATISTICAL INFORMATION OBTAINED FROM MATRIX MLS SYSTEM. GEOGRAPHIC AREA: INNER-CITY COMMUNITIES WITH NEW INFILL DEVELOPMENT. PROPERTY TYPES: INCLUDES ONLY SINGLE FAMILY HOMES. REPORT NOTE: NEW INFILL TOWNHOMES ARE DEFINED AS CONDOMINIUMIZED MULTI-PLEX UNITS (CONVENTIONAL AND BARE LAND), WITH MINIMUM 2 STOREYS, IN THE INNER-CITY THAT ARE 2014 OR NEWER. SOURCE: STATISTICAL INFORMATION OBTAINED FROM MATRIX MLS SYSTEM. GEOGRAPHIC AREA: INNER-CITY COMMUNITIES WITH NEW INFILL DEVELOPMENT. PROPERTY TYPES: INCLUDES ONLY MULTI FAMILY HOMES.
Thomas Ferianec Re/Max House of Real Estate