Huge price gains in real estate for the Calgary region - Feb 2022

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.

YTD Residential Sales - Selling over list common for almost 50% of homes - Calgary

Monday Morning Stats! YTD (Year to Date); 43% of residential sales in Calgary sold over List Price! Okotoks, 45% over list! Breakdown; Calgary max over list was 29% or $145,000 on $500k list price. Out of 1,277 total sales, 62 homes sold 10%+ above List, 145 of homes sold between 5-10% over list, 121 of homes sold between 2-5% over list, and 222 of homes sold at between list price and 2% over list. Avg over list was $22,000. Okotoks Max over list was 6%. Only 24 sales in Okotoks so far this month due to low inventory.

2021 was a record year for local real estate sales!

2021 record year for home sales

City of Calgary, Jan. 4, 2022 – Thanks to exceptionally high sales in December, 2021 was a record year for home sales. Calgary sales reached 27,686 units this year, nearly 72 per cent higher than last year and over 44 per cent higher than the 10-year average.

“Concerns over inflation and rising lending rates likely created more urgency with buyers over the past few months. However, as is the case in many other cities, the supply has not kept pace with the demand, causing strong price growth,” said CREB® Chief Economist Ann-Marie Lurie.

As of December, the unadjusted benchmark price rose by nearly one per cent over last month and was sitting over 10 per cent higher than last year’s figures. Overall, the 2021 benchmark price rose by more than eight per cent compared to last year for a total of $451,567, just shy of the annual record high set back in 2015.

We are entering 2022 with some of the tightest conditions seen in over a decade. As of December, inventory levels are nearly 25 per cent lower than long-term averages for the month. This will have an impact on our housing market as we move through 2022.

Okotoks

Despite persistent challenges with supply levels, sales in Okotoks reached record levels in 2021. However, the strong sales weighed on inventory levels, which on average eased by 41 per cent this year and remain over 50 per cent lower than what the market typically has available.

Easing inventory and strong sales left the months of supply at record-low levels in December with less than one month of supply. With sellers’ market conditions throughout the year, there have been some significant gains in prices. On an annual basis, the benchmark price hit a new record high at $474,842, which is an annual gain of nearly nine per cent.

Your new home awaits.