It is hard to believe that summer is over and that Fall is just around the corner! As August wrapped up there were some interesting trends happening within the Real Estate Markets across the Province. As what would be expected in a typical August market, the majority of the markets across Alberta saw a decline in sales for the month. What was a bit of a surprise after months of outpacing the previous year in sales, the year over year sales also dropped in August in most regions. The good news is that despite the drop in sales across most regions, the inventory levels also continue to drop in most markets due to less new inventory coming onto the market. This is helping to lower the absorption rate in most markets which have a direct effect on prices. The average price in Alberta remains relatively stable at $385,848.
The sales activity slowed in all but two regions in Alberta, and it was interesting to see that the year over year for sales in the Calgary and Lloydminster regions were the exception to slowdowns. The most notable difference in sales was the increase of 5.4% to 2,029 sales in the Calgary Region for August. Across the Province, the sales activity has been predominately in the lower price points of the markets. We anticipate this trend to continue as many of the new jobs being created in Alberta are not for the higher salary positions in the Province.
With the slow down in sales, the numbers that we are watching this month are the months of inventory (absorption rates). The months of inventory help us determine if it is a buyers or seller's market and help us determine if markets are strengthening or softening. With the larger markets of Edmonton (-3.36% to 6.39 months) and Calgary (-5.62% to 5.1 months) seeing the months of inventory continue to drop, there are some markets that have had a significant increase. The largest increases were in Medicine Hat (+25.39% to 6.13 months), Grand Prairie (+22.69% to 7.63 months), Lethbridge (+17.96% to 7.35 months), and Central Alberta (+5.88% to 12.25 months). If we do not see either higher sales or less inventory coming on in these markets, we expect to see continued downward pressure in these markets. However, so often we see the ripple effects of the larger markets carry out across the Province.
Seeing the Calgary region continuing to improve is a great sign for the ever so slow recovery that Alberta has been experiencing. Other positive signs are that the lower price points in the markets are moving which will translate up the property ladder. With many economic factors improving throughout the Province, consumer confidence continues to be a challenge as people adjust to our new normal. As markets adjust, it is ever so important to help educate people on what is happening specific to their micro-markets within the macro markets. We anticipate this to be a temporary slow down coming into what should be busier Fall markets.