Demand shifting to more affordable options

Strong sales for condominium apartment and row properties was not enough to offset declines reported for other property types. This caused city sales to ease by nearly 12 per cent compared to last year. 

However, with 1,901 sales in September, activity is still far stronger than levels achieved prior to the pandemic and is well above long-term trends for September. Despite recent pullbacks in sales, and thanks to strong levels earlier in the year, year-to-date sales remain 15 per cent higher than last year’s levels.

“While demand is easing, especially for higher priced detached and semi-detached product, purchasers are still active in the affordable segments of the market, cushioning much of the impact on sales,” said CREB^® Chief Economist Ann-Marie Lurie. “At the same time, we are seeing new listings ease, preventing the market from becoming oversupplied and supporting more balanced conditions.”

In September, new listings declined by ten per cent. With a sales-to-new-listings ratio of 72 per cent, it was enough to prevent any gain in inventory levels, which declined over last month and were nearly 21 per cent lower than last year’s levels. The adjustments in both sales and supply levels have caused the months of supply to remain relatively low at less than three months.

The shift to more balanced conditions is causing some adjustments to home prices. While prices have slid from the highs seen in May, as of September, benchmark prices remain 11 per cent higher than last year and six per cent higher than levels reported at the beginning of the year.

Detached

For the sixth consecutive month, sales activity has slowed in the detached market and is now offsetting the gains recorded in the first quarter. The recent decline in sales has been mostly driven by a reduction in the under $500,000 segment of the market, as a significant reduction in supply for those price ranges have left little options for potential purchasers. 

At the same time, detached sales continue to improve for homes priced between $600,000 – $999,9999. This higher price range group has reported the largest growth in new listings and overall supply levels.

While the overall detached market is far more balanced than it was earlier this year, for homes priced below $500,000 conditions remain relatively tight. This is likely causing divergent trends in pricing activity based on price range.

Overall, detached prices eased by nearly one per cent over the last month with the largest monthly decline occurring in the City Centre district. Despite monthly adjustments, prices remain nearly 13 per cent higher than last year. 

Semi-Detached

Further pullback in sales this month was not enough to offset gains from earlier in the year as year-to-date sales remained six per cent higher than last year’s levels. While new listings in this segment can vary month-to-month, year-to-date new listings have remained just slightly lower than levels achieved last year. This kept inventories at levels that are still far below long-term trends. 

The recent pullback in sales was enough to cause the months of supply to push up relative to levels seen earlier in the year. However, with less than three months of supply, conditions remain relatively tight for this property type.

While conditions do remain tight, prices still trended down following higher than expected gains earlier this year. Overall, benchmark prices remain over 10 per cent higher than levels reported last year.

Row

Row sales activity improved over last year’s levels, contributing to the year-to-date record high pace of sales. Recent pullbacks in new listings and strong sales activity have caused inventory levels to remain low, keeping the months of supply below two months.  

With conditions remaining tight, prices stay mostly unchanged compared to last month and are 15 per cent higher than prices reported in September 2021. The highest year-over-year price gains occurred in the North district.

Apartment Condominium

With a new September record, apartment condominium sales continue to rise relative to last year, contributing to year-to-date sales of 5,026, a 60 per cent gain over last year. While new listings also improved so far this year, it has not been enough to prevent some easing in inventory levels. 

Unlike the other sectors, since 2016, inventories have generally been higher for apartment condominium. It is only the strong demand this year that has caused this market to shift from buyers’ market conditions reported throughout most of last year to one that is now relatively balanced.

Relatively balanced conditions prevented any significant shift in prices this month compared to last month and overall, apartment condominium prices remain over 10 per cent higher than last year’s levels. Despite recent gains, prices remain below the 2014 high.

REGIONAL MARKET FACTS

Airdrie

Both sales and new listings eased in September, preventing any significant shift in inventory levels this month. With a sales-to-new-listings ratio of 89 per cent and a months-of-supply still below two months, conditions remain relatively tight in the market.

While inventory levels remain low, purchasers are more cautious than they were a few months ago which is weighing on home prices. In September, the benchmark price eased by nearly two per cent compared to last month but remains 16 per cent higher than the previous year.

Cochrane

Sales eased for the sixth consecutive month in September. This caused year-to-date sales to reach 970 units, a three per cent decline over the previous year. At the same time, new listings have risen relative to the low levels seen last year, helping support gains in inventory levels. 

As of September, there were 165 units available in inventory. While this is higher than last year’s levels, this is still nearly 30 per cent lower than levels traditionally seen in September. 

Shifts in both supply and demand are causing the market to shift toward more balanced conditions and it is also taking some of the pressure off home prices. In September, the benchmark price eased by nearly two per cent, totaling to $508,800. Despite the monthly pullback, prices are still over 16 per cent higher than September 2021 prices. 

Okotoks

Supply levels continue to be a challenge in Okotoks. While new listings have improved over last year, sales have generally kept pace as the sales-to-new-listings ratio remained elevated at 81 per cent. At the same time, inventories remain nearly 50 per cent lower than levels traditionally seen in September, keeping the months of supply below two months.

While conditions remain relatively tight, purchasers are more cautious than they were earlier this year, causing monthly prices to ease by nearly two per cent. Despite the downward trend recorded over the past four months, prices remain over 12 per cent higher than last year.

Click here to view the full City of Calgary monthly stats package.

Click here to view the full Calgary region monthly stats package.

https://www.creb.com/News/CREBNow/2022/September/Aug_housing_stats_2022/

---

Pete and Katelyn’s Market Update:

Pete: Am I doing the intro this time? 

Katelyn: Yes. 

Pete: Okay. Intro.

That’s our intro guys. Hi. 

Katelyn: That’s it. 

Pete: Okay. Well if you stop ducking outta the Way. 

Katelyn: Sorry. 

Pete: Okay. Here everyone, it’s Pete and Kate. Hello and assalam u alaikum and sata srī akāla and como esta and KHOO dun AH fohnt. And all that stuff. 

Katelyn: What’s that one? 

Pete: KHOO dun AH fohnt. 

Katelyn: Yeah. 

Pete: Get out . 

Katelyn: Bye. 

Pete: That’s Dutch. 

Katelyn: Oh, I didn’t know he never said that before.

Pete: Yeah. Or if I said Guten Tag, that would be German. Yes. Or low German or something. But anyways, welcome everyone, no matter where you’re from. Anyways to get onto today’s real estate market update. This is gonna be for September of 2022, and there’s crazy things happening lke, I think the problem is when we watch the news or listen to the news, yeah, we, we get a certain impression, but when you start breaking down the numbers, there’s other stories going on that are kind of crazy.

So what we’ll do is we’re gonna go through the sales versus new listings and what the inventory looks like first, and then we’ll get into what the sales prices are doing. But really if you hang up for the first half that’s the most exciting stuff. If you get bored after that, feel. Hit delete or stop or No, don’t do that.

Watch to the end. And then don’t forget to give us a little, like, cuz Google or YouTube or whatever likes those things and then..

Katelyn: Thumbs up

Pete: Yeah. Thumbs up and, and a comment. And then subscribe and send us fan mail. Yeah. We never get fan. 

Katelyn: No, we don’t.

Pete: Not once 

Katelyn: We gotta, we gotta set up a PO box and then, you know, that’s the official way to do it. Like, this is my PO box. 

We can’t 

Pete: just get it in the mail, like email, like when’s the last time we went to a mailbox? 

Katelyn: But it’s, it’s more personal that way. 

Pete: It is. I agree. I agree. Personal. Yeah. Personal’s good. 

Katelyn: Personal is good.

Pete: All right. So in terms of sales, what’s going on?

Katelyn: In terms of sales year to year we are down by 1900. Actually, 1901, if we wanna be very specific percentage wise, that’s at 11.9% compared to the year before. 

Pete: Yeah. September versus September. 

Katelyn: Yes. Right. 

Pete: We’re down 12%. But here’s what’s interesting year to date, and this is what the media’s not telling you.

Cause don’t forget the mainstream media’s lying to you. Now, just joking is year to date, we’re still up over 15% from last year. And last year wasn’t a terrible year. No. You know? Yes. For September we’re down 12%. Sounds terrible. We’re gonna break that down even some more and show you that it’s really not, but yes.

Calgary state board wide, we’re down 12%. But here’s what’s interesting is in terms of sales year over year the detached are right where we started. So for September we’re down 12%, but in May, June, July, we were kind of selling more of them. So year over year now we’re exactly where we were last year at this time.

 The semi-detached houses which are like a half duplex, we’re at a 6% increase over last year. This is where it gets interesting for rowhouses or townhouses, as we call them. We’re up 44% from last year. Yeah, that’s crazy. 4%. That’s crazy. Yeah. I mean, they were really suffering for a while.

Townhouses were just dogging it. Yeah. And then apartments, remember all those months where I said, Get an apartment. Get an apartment, get an apartment. That market’s gonna go nuts. We’re up 60% over last year. Wow. So, yes, Month over month, September we’re down 12%. But in terms of increases over last year, we’re talking.

Zero for detached, but 6% for semi 44 for townhouses and up 60% for apartments. That’s crazy. What’s interesting too, in terms of those last year, cuz we’re gonna get into new listings and total supply and stuff. In terms of months of supply, we’re down 51% now in townhouses. Ooh. In terms of months of supply.

And we’re down 53%. In apartments. So remember all those months over the last few months, what I kept saying, if you’re looking for an investment property, if you’re looking to see an increase in value, What was I saying? 

Katelyn: Yep. Buy apartments, buy row houses, townhouses. Buy. 

Pete: Buy an apartment. Especially downtown, and I’m still saying it.

I’m still saying there’s tons of room cuz we haven’t seen the prices increas that much yet. We’ve seen supply really shrink, like we’ve seen supply shrink by. 53% and sales increase by 60% and the average sale price is still only up, you know, a normal amount. So it’s still gonna go up, trust me.

Katelyn: Yeah, and I think that has to do something with the interest rates as well, because obviously people get approved for that much, so now they’re looking at more affordable options like Yeah. Townhouses and apartments. 

Pete: Well, and especially if you’re moving here from Vancouver or bc we’ve been talking about this.

Too, Right? Is all of a sudden now it gets really cheap to buy an apartment. Yeah. You can still buy an apartment downtown Calgary, get this Torontonians in Vancouverites. You can still get a condo downtown Vancouver for $150,000. You don’t believe me. I’ll show you. In fact, I think there was one I looked at this morning for $139,000.

Katelyn: Oh wow. 

Pete: So by that one, your petty cash fund. Yeah. Anyway, so that’s where sales are at. What are we doing for new listings? 

Katelyn: New listings are also down as well at 2625. So 2,625 listings year over year. So percentage wise, that is about 10%. Almost 10%, compared to last year. Which would make sense why it is down, because we just talked about the the amount of listings that we have, new listings for rowhouses and for apartments, it’s all down.

Pete: Yeah, and as long as sales are down by 12% and new listings are down by 10%, you’re not gonna see a big variance in prices that, that other places in Canada and across North America are gonna be seeing. I don’t think so. No. In fact, our total inventory is still down over 20%. 20.8%.

 So, which leaves our month supply again. People like “Pete I hear that real estate market is really suffering” and I’m like, not, not really. We’ve got a 2.34 month supply. Less than a two and a half month supply, which again means if we stopped listing houses, we’d be outta houses for sale in two and a half months.

Exactly. Less than that. 2.3 months. Yeah. So, and again, that’s down 10% from last year, so not too bad at all. In terms of the areas of the city that are performing the best, what we got. 

Katelyn: Oh, North. North is performing the best at an increase from 16% year over year increase of, Oh wow. That’s so 500,000 Yeah. Is the increase in the north. Wow. That’s actually, 

Pete: No, that’s the price. 

Katelyn: sorry. The price. 

Pete: Yeah. If it went up by 500,000. 

Katelyn: Yeah, that’d be crazy. Sorry, my bad. I meant to say the price.

Pete: Catching. Yeah, So the price, the North House, $500,000, 16% increase over last year. Over last year. The second best performing area, and I’ve been saying this for a while too, is that would happen is, and this is really going back to what you were saying earlier, right?

Yes. Is interest rates have, have sort of they’ve been hurting the detached market and especially in the higher price homes, more than any other part of the market. So if you’re looking at North Central, which is what we were talking about originally, this is. You know, Harvest Hills over to Panorama Hills, that kind of area.

That’s at $500,000 up 60%. Yeah. And then the Northeast is at $416,000 or $417,000 average or not, sorry, average. I think that’s benchmark price, whatever. It’s up 15% as well. So it’s done really well. Southeast has done pretty good. They’re at 14.5%. The area where there’s still opportunity, and I say it every month and sooner or later people are kinda going, you know, you were right and we’re seeing it now.

Like I have to say I love it when I’m right. Like, you know it’s so rare. But right now I’ve been saying for a while, I’m gonna repeat this. We’ve been saying for a while, apartments, Yes. You. They’re up in sales by 60% over last year. And inventory is down 53% last year. And when you look at the, at the downtown area, it’s the poorest performing area still.

And it’s only up cuz it’s only up 5.3%. So it’s not a huge increase in in values yet. But they’re gonna come, It’ll explain why is the reason they haven’t is because there was just so much vacant property. So as long as it was vacant. There were still people that were eager to sell and, or you sometimes even desperate to sell.

But as soon as those are gone and we actually start seeing that there’s nothing left you know, you’re gonna see prices go up is my prediction. Yeah, I don’t know the future. I’m not guaranteeing that. 

Katelyn: Don’t quote him on that. 

Pete: All the caveats and stuff I have to put on there to cya. I’m doing.

But that being said, so this goes to show you that you know, yes, sales are down 12% and that’s what you’re gonna read in the paper and here on the news. There’s great things happening as well. So if you wanna know what’s happening in your particular market, I would call Kate or me and we’ll tell you what your house is what’s happening with your house.

 Right. Whether it’s a townhouse in Tuscany or a bungalow and Beddington or wherever you’re living. Give us a shout and we’ll be able to give you a bit more of a breakdown as to what your house is worth. If you’re thinking of. The other thing I’d, I’d recommend is if you have any family moving here from BC or Ontario.

Ontario looks like our government’s putting on a great little push in Toronto right now and convincing people to move out here. My phone number is at the end of this this video, but my phone number otherwise is 403-818-7310. You got a phone number, Kate?

Katelyn: I do, yes. 403-615-234 6. We’ll also put the link to our Facebook page, moving to Alberta. So come check it out. Invite all your friends and family that live elsewhere to follow and like our page. 

Pete: Totally. Yeah. And just before we go, thank you again, Kate, for swinging into Calgary for a few games to do this video.

Katelyn: Ah, you know, 

Pete: When Kate’s not in Hawaii, she’s in Vegas or Mexico. So I don’t know where she’s off to next, but grateful to have her around for a few days. 

Katelyn: Yeah, you know what, He’s actually leaving tomorrow, so Yeah, he was, 

Pete: I’m going camping in Carsland. It’s different than going to Vegas. 

Katelyn: That’s still vacation and you’re, 

Pete: I’m taking my 40 year old trailer to hang out with my wife and get some peace and quiet

I’m not the jet setting, beach loving. Anyways, everyone, thanks for watching. Appreciate it. Call us anytime. 

Katelyn: Bye.