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Understanding the decline in home sales
The Calgary housing market is currently experiencing a notable downturn, with home sales plummeting by 17% in May compared to the previous year. This significant drop can be attributed to ongoing economic uncertainty that continues to impact buyer confidence.
According to the Calgary Real Estate Board (CREB), only 2,568 homes were sold last month, a stark contrast to the bustling market conditions seen in previous years.
CREB’s chief economist, Ann-Marie Lurie, highlights that this recent decline in sales, coupled with an increase in inventory, has shifted the market dynamics towards a more balanced state.
This shift has alleviated some of the pressure on home prices, which have been a concern for many prospective buyers. With the market stabilizing, it raises questions about the future trajectory of home values in Calgary.
Inventory levels on the rise
In May, the number of new listings surged to 4,842, reflecting an 11.6% increase from the same month last year. This influx of new properties has contributed to a total inventory of 6,740 homes available for sale, which is considered relatively balanced with a supply of 2.6 months.
The increase in inventory is a double-edged sword; while it provides more options for buyers, it also creates pockets within the market where supply exceeds demand, leading to varying home prices across different neighborhoods.
Some areas are witnessing a surplus of homes, resulting in downward pressure on prices, while others are still grappling with low inventory levels, which can drive prices up.
This divergence in market conditions emphasizes the importance of localized market knowledge for both buyers and sellers navigating the current landscape.
Impact on home prices
The residential benchmark price in Calgary has seen a decline, resting at $589,900 last month.
This figure represents a nearly 3% decrease from the levels recorded in May 2024. The fluctuation in prices is indicative of the broader economic conditions affecting the housing market. As the city grapples with these changes, potential buyers may find opportunities in the current market, especially as prices stabilize and inventory levels increase.
In conclusion, the Calgary housing market is at a crossroads, with declining sales and rising inventory creating a complex environment for buyers and sellers alike. Understanding these trends is crucial for making informed decisions in this evolving market.
