After another record breaking month for residential real estate sales in April, there are signs of the market coming back down to earth. Sales volumes for the first 2 weeks of May are down 14% from the first two weeks of April. The number of homes selling for list price or higher has gone from 66% in April to 50% for the first two weeks of May. There is talk of an interest rate hike of .5% June 1st which will add some summer ice to our red hot market. House price gains should start to level out in June. On average, Calgary is up 33+% over pre-covid levels.
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.
Alberta Labour Market - to April 2022
Things are looking up in Alberta! This bodes well as it relates to real estate when taking into account the healthy oil and gas market conditions and the outlook for farming crop revenues in 2022.
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.