Price escalation really started in Dec 2021, and has escalated very quickly during February 2022 after record levels of homes sold in Calgary and Region in 2021. This has been a long time coming after 14 years of up and down’s in real estate pricing in our region. We started 2021 at about pricing levels of 2007. Nationally over that time frame home prices are up on average 48% which follows a natural historical curve over the past 100 years based on typical inflationary factors. How much room is there to grow? That is the big question on everyones mind. Until inventory levels move towards a balanced market, upward pressure on price will continue. We need inventory to increase 300+% before that even gets close to happening and we level out.
It is fun to look back and review past predictions. Back on Jan 7th, 2022, I was asked to quote for an article in the Calgary Herald on a market forecast by Royal Lepage for the Calgary region. They felt we would see a price gain for 2022 of 6%, CREB forecast 4%. My comments were, “Local realtor Tim Jones says Calgary and its surrounding regions…could see even stronger growth than predicted by the Royal LePage report. Calgary and the surrounding counties may see price growth of 10 per cent or more for residential real estate in 2022,” says Jones, broker and owner of Re/Max Prime. The region did not see the same large price gains experienced in other major centres in Canada last year and, in turn, has a lot more room for prices to grow”. I had said we could see gains in excess of 25% but they didn’t print that. Like so many things going on around us in the past 2 years, it is hard to predict what’s around the corner but one thing is certain, real estate over time has always proven to be a good investment.
By the numbers; Year over Year gains (Y/Y); Calgary average detached home price Y/Y Jan 2022 was 11.9% Y/Y, Feb 2022 Y/Y saw an increase of 18.1%, Semi-Detached Feb Y/Y 7.9%, Townhouses Feb Y/Y 11.1%, Apartments Feb Y/Y 8.7%. Okotoks; Detached home average price increase Y/Y Jan 2022 11.5%, Y/Y Feb 2022 28.4%. Apartments and townhouses show the most to gain right now as they catch up and people feel more comfortable living back in close quarters to one another plus affordability comes into play.
