The graphs and numbers speak for themselves. April 2023 was a big month for resale real estate in the Calgary region. We are following the typical cycle of a hot spring market and our early spring/summer temperatures have started things early. Supply continues to be an issue with new building starts challenged. We need more new inventory to balance our local market and provide homes for people to live in. Until new housing starts improve, tight resale market conditions will remain. The big question is why are our new housing starts falling behind the rest of Western Canada?
Warmer weather and renewed confidence!
The last week of April has seen a sharp uptick in interest to buy real estate as our weather becomes warmer and people feel renewed after a long winter. Final numbers for the month are not in yet, but it appears the past week has seen a nice rebound in all market segments. Interest in the $1mil+ market is extremely strong in both the City of Calgary and Rural areas which I find to be a bellwether for overall market confidence. We are on track to see records shattered for acreage sales. Calgary will hit close to record volumes in the $1mil+ market. The mid market has picked up nicely and the under $650,000 market is staying very strong. I will update once the final April data comes in. Interesting times indeed.
Real Estate sales volumes drop off significantly in Foothills AB Region for detached homes.
April 2023 is showing signs of a cooling of the number of detached homes sold in Calgary and Okotoks. In Calgary, volumes are down 50% over the last couple years. In our last two booms in Alberta, 2007 and 2014, sales volumes where double what we are seeing for this April. The last time volumes were this low was when the market bottomed out in 2011. Okotoks is worse off. Sales volumes are less than half the previous couple years and half that of 2014 and 2007. Part of the problem is inventory; there are only 37 detached homes for sale in Okotoks and under 1,000 in Calgary right now. In our past booms, we had the same issue of low inventory. Affordability is a major issue. Most of the inventory for sale in Calgary (74%) and Okotoks (70%) is above the $650,000 price point. That means in the whole of Calgary, there are less than 300 homes for sale under $650,000 and only 11 in Okotoks. This segment of the market is very hot right now. However, sales volumes (under $650k) are down 65% from last year. It’s a wierd market and my crystal ball is a bit off kilter. We have people moving here, relocations from BC and Ont are up, unemployment is still high relative to other centers. We are in strange times indeed.
March house prices take off in the Calgary Region
Home prices in the Calgary region seem to be defying predictions based on rising interest rates and general economic indicators. Sales volumes are down considerably over the past two years, interest rates have doubled, however, low supply of resale homes combined with what builders are charging for new homes is pushing up the resale market considerably. Many builders seem to be limiting supply of available lots and pre-sale builds which is creating restricted options for buyers and thus keeping prices high. This could be due to lack of skilled labour/supply chain issues or it could be market manipulation and capitalization. It is extremely important to get skilled and experienced advice before buying in today’s market!
Housing Stats for March 2023 (detached)! Calgary: Under $600k: 483 sales with 265 for sale. Hot Hot Hot! The $600-800k home: 424 sales, 401 for sale. One months inventory = sellers market. $800,000+ is a balanced market with 3 months inventory. Still good for this time of year. Okotoks: Under 600,000: 22 sales with 5 for sale (the for sale inventory is starting to creep up as I write this). Hot Hot Hot! The $600-$800,000 market saw 17 sales with 17 for sale at the end of March = Sellers market. High end market is at it’s typical pace. Rural: Very little inventory in the under $1mil mark and very little for sale within a short drive of town. The acreage market is just starting it’s spring push. It will be an interesting ride again this year.
All in all, indicators point to a good spring market with little indication we are at peak pricing. However, be careful not to overpay. Mortgage renewal and cost of financing will likely have an impact on our market at some point this year. Long term interest rates have started to drop which will help mitigate some of the impact on any downward pressure on price later this year.
