Low new construction starts is not keeping up with demand causing a supply shortage

Record levels of low supply of homes for buyers to choose from has pushed prices up this spring. The main culprit is lack of new home inventory to keep pace with net migration and demand. But, relief is on the way as new subdivisions and projects come on stream. Check out the recent Calgary Herald article I initiated to explore and start a conversation on the causes of why new construction starts are way down in our region from last year.

https://calgaryherald.com/life/homes/calgary-short-on-housing-supply

April 2023 Final Sales numbers are in. Resale homes take off! New home builds drop off.

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.