CREA: Home sales slip in January
The Canadian Real Estate Association (CREA) released its stats for the month of January across Canada, and the most alarming trend is that home sales fell 3.1% from December 2014 to January 2015. Furthermore, January 2015’s activity registered in 2% less than January 2014 levels.
2 Alarming Trends
1) Home sales declined in about 60% of local housing markets, led by Alberta and Saskatchewan.
“As expected, consumer confidence in the Prairies has declined and moved a number of potential homebuyers to the sidelines as a result,” said CREA President Beth Crosbie.
CREA’s Chief Economist attributed the slip in sales to the weakened markets in Calgary and Edmonton: “Comparing sales activity for January this year to sales one year earlier, there was a fairly even split between the number of markets where sales were up versus the number of markets where sales were down. The decline in national sales largely reflects weakened activity in Calgary and Edmonton. If these two markets are removed from national totals, combined sales activity remained 1.9 per cent above year-ago levels.”
2) The national sales-to-new listings ratio 49.7 percent, which is the first time since December 2012 that this ratio has been below 50%. Essentially, less than 50% of homes listed, are being sold. A ratio between 40 to 60 percent is considered to exhibit signs of a balanced market. A dip below 40% would indicate a shift to a buyers’ market.
Furthermore, the number of months required to liquidate national inventory of listings stands at 6.5 months. This is the highest reading since April 2013. This number represents how many months it would take to completely liquidate current inventories.
National average sale price continued its march upwards, showing a 3.1% year-over-year gain. Although, this number of price growth has been muted over the past few months, the trend continues to be positive. Price gains were led by two-storey single family homes at 6.57%, townhouse/row units at 5%, and one story single family homes at 4.61%.
Perhaps surprisingly, the housing markets tracking the largest gains were Calgary at 7.76%, Toronto at 7.47%, and Vancouver at 5.53%.
The average home price in Canada stood at $401,143. According to CREA, removing Toronto and Vancouver from this number would mean a much more modest $301,280 average price. This is a decline of 0.75% on an year-over-year basis.