April Homes sales continues at a blistering pace but signs of easing are happening

April 2022 Market Update;

April 2022 residential resale home sales in the Foothills region continued at a blistering pace however, early signs indicate an easing of price gains and supply/demand constraints. In the hot price point of $500,000 to $800,000, Deep south Calgary has about 2 weeks worth of inventory to sales (274 April sales to 133 for sale) with Okotoks only about 4 days worth (64 sales in April and only 9 for sale). 75+% of sales sold for list price or higher. It will take some time to get back to a balanced market which is 2.5 to 3 months of inventory to sales.

Detached homes in our region that sold pre-covid during 2016-2020 (flat market conditions) and then resold in April 2022 on average saw price gains of 33%.  Interestingly enough, America saw an average home price gain of 33% in the past 2 years. Covid created the perfect storm of events which resulted in large gains for home prices in the western world. Canada average gains reflect similar trends with prime regions, warmer climates seeing greater gains than other less desirable areas of the country. Country Residential Properties are still highly desirable with many people making the choice to leave inner city lifestyles. 

Alberta is poised for a good run in the short to medium term economically. Employment is up, affordability vs other major centres in Canada is still very attractive and the Foothills region is a great place to call home. I predict that home prices will start to level out in the next couple months. New construction is now taking 10-12 months vs 18 months late last year. As construction material availability and costs come down in price over the next year and more new home product is available, the resale market will adjust to these conditions. 

First two weeks of March Madness - Residential Real Estate Stats for Calgary and Okotoks

March residential real estate sales in the Foothills Region continues at a blistering pace. Calgary’s volume is up but the average percentage buyers are paying over list price is dropping. Okotoks is on fire but inventory is starting to climb which should moderate future gains similar to Calgary’s March results.

By the numbers for us stat geeks; 2 weeks into March 2022 (residential); Okotoks saw 53 sales in the first two weeks of March. 20% (10 homes) sold for under list price with the typical amount being $5,000, 80% (43) homes sold at list price or over. Average over list price was 3.79%. Range is 4% under list to 16% over list. Median over list was $30,000 with a range of $2,000-$110,000. 40% increase in volume Y/Y and 18% increase in average sale price Y/Y. Volume was up in March over first two weeks of Feb 2022 by 60% with the average selling price over list up from 1.74% in Feb to 3.79% in March 2022. Calgary detached sales for the first two weeks of March; Y/Y Volume up 27%, Avg Price up 10% Y/Y. Volume up over the first two weeks of Feb 2022 by 14.4% but avg selling over list price down from 5.1% in Feb to 2.61% in March 2022. :: Breakdown of LP/SP Calgary for first two weeks of March; 24% under list, 26% between list and 2% over, 14.4% between 2 and 5% over list, 23.4% between 5 and 10% over list, and 11% over 10% above list price. Hang onto your hats. The chinook winds area blowing. I predict that inventories will continue to climb as spring warmth is in the air and sellers jump in to take advantage of the current price gains. Buyers need to always remember when buying; location, location, location.

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.

Your new home awaits.