Even though Nov 2022 detached home sales volumes are down year over year by 34% in Calgary and 40% in Okotoks, we are still at typical levels for this time of year pre-covid. In Calgary, the under $600,000 market segment made up 62% of all sales and in Okotoks, that increased to 68% of all sales. Inventory remains extremely tight in this price point. This is most notable in community of Okotoks. Currently there are only 13 homes for sale under $600,000 and there were 17 sales in Nov. However, there are 27 homes for sale above $600,000 (Dec 3rd) and November saw only 5 sales. Apartment and row housing sales are strong in both Calgary and surrounding areas. Note the graphs which show the reduced inventory levels with pricing holding steady for apartments. There is a shortage of affordable housing in Canada. There is a shortage of homes period! Interest rates will continue to put a damper on sales, however, people need to live somewhere and with the lack of affordable new homes hitting the market, price softening should remain limited in 2023 in the Calgary region.
Oct 2022 Calgary Herald - Record demand for multi-family homes
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.