Demand remains strong with limited supply for buyers, however, price gains have levelled out in Calgary and home inventory is starting to creep up. I predict that the remainder of 2022 will continue to see good real estate volumes and by the fall of 2022 we should start to reach a balanced market for supply and demand.
1st two weeks of May indicate the market levelling out
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.
