6 weeks ago I was quoted in the Calgary Herald regarding the state of our local market and the bright spot which is apartment sales and row/townhome sales growth. This market segment did not see the rapid growth as the detached market and acreage market explosion that occurred during the covid years. It is now catching up! https://calgaryherald.com/life/homes/calgary-experiencing-record-demand-for-multi-family-living
Oct homes sales decline over 2021/20. Inventory remains tight.
Calgary sales/pricing of detached homes peaked in May 2022. Interest rate hikes, world events, cost of new home construction and the price of energy have played a significant role in cooling our local real estate market. A limited supply of homes available for sale is helping to minimize price corrections being seen in other areas of Canada. However, local values are down 5-10% from the May/June 2022 peak.
Apartment sales and pricing suffered during the covid years and are now the one bright spot in Calgary for real estate ownership and investment. We went through a period of upsizing and now are entering a period of downsizing for some as people re-evaluate their lifestyles post covid.
Work from home is still very prevalent and will likely remain a factor in home purchases moving forward for approximately 30% of the workforce.
Okotoks: 32 detached homes sold in Oct 2022 with current for sale inventory remaining very low at 50 units. Oct 2021 saw 48 sales, Oct 2020 - 53 sales. 2019-2015 saw between 30-33 sales per year in Oct. The key market factor however which will limit a drastic price correction as seen in 2008 and 2015 is inventory levels. During the pre-covid years, inventory was around 150-175 homes at this time of year and we only have 50 right now.
Acreage properties are still in demand but are also seeing some price reduction pressures.
So, hang onto your hat, this winter will be a bumpy ride until the markets sort themselves out. Just remember, if you buy and sell in the same market it is all relative. Also, if you bought pre-2020, what your home is worth today is all relative. I have a saying and that is “You can’t lose what you don’t have” and that is the value of what your home would have been worth in the spring of 2022.
August 2022 Detached Home Price up 19.3% since pre-covid August 2019 - Calgary Real Estate
The average resale detached home price for homes sold in Calgary (for homes sold under $1mi) was $580,910 this past Aug. Up 10% since Aug 2021. 27% of the homes sold in Aug 2022 went for list price or higher. In 2021, 26% sold for list price or higher. Back in 2019, the average was $486,809. That’s a 19.3% increase in 3 years.
Okotoks sales volumes are down 23% this August vs 2021 but up 15% over the 5 yr running avg pre-covid. 40% of the homes sold this Aug sold for list price or higher.
Sales volumes are down vs the peak run up of volumes and prices this past spring, but all things being relative, we are still in good shape. Interest rate hikes are going to cool off growth and inflation in general. However, with world energy prices about to go crazy this winter (if Russia continues its war efforts) then the Alberta and Canada gov’t along with world energy companies are in good shape to cash in - sad but true. Alberta’s economy may be somewhat insulated which will be reflected in the overall Real Estate market health. Net migration to fill job vacancies will play a significant role in our real estate market going forward.
Aug 1-15 Market Health and Projections - Foothills Real Estate
Sales volumes of detached homes slowed vs last year. However, comparing to the 5 years average pre-covid, sales volumes are still up for this time of year. For the first 2 weeks of August, which is typically slower time of year, the following puts into perspective our local real estate market health; Calgary - Up 7.6% over 5 year average pre-covid levels. Okotoks is up 19%, Foothills County (all communities) up 40%, Rural Acreages up 46%. So, even though interest rates have risen, inventory has increased, and there is much media attention on price corrections, our region is staying relatively strong.
Looking at some economic data, see attached, I believe we will see some softening in the short term as the data impacts our local Real Estate market pricing, inventory levels will increase, some sellers may believe the sky is falling, but the reality is that long term interest rates are predicted to come down next year, building costs will come down, consumer confidence will pick back up. Alberta is poised for growth. Hold on to your hat. It will be a bit of a bumpy ride over the next few months, but it should settle down into a more balanced real estate market by spring 2023. Here’s hoping!
