Sales remain stronger than pre-covid levels
October sales eased compared to last year’s levels, mostly due to slower activity in the detached sector.
However, with 1,857 sales this month, levels are still stronger than long-term trends and activity reported prior to the pandemic. Year-to-date sales have reached 26,823 and with only two months to go, 2022 will likely post a record year in terms of sales.
“Calgary hasn’t seen the same degree of pullback in housing sales like other parts of Canada, thanks to persistently strong demand for our higher density product,” said CREB® Chief Economist Ann-Marie Lurie. “While our city is not immune to the impact that inflation and higher rates are having, strong employment growth, positive migration flows and a stronger commodity market are helping offset some of that impact.”
New listings also trended down this month causing the sales-to-new-listings ratio to rise to 85 per cent and inventories to trend down. Much of the inventory decline has been driven by product priced below $500,000.
While conditions are not a tight as what was seen earlier in the year, with only two months of supply, conditions remain tighter than historical levels. We are also seeing divergent trends in the market with conditions continuing to favour the seller in the lower-price ranges and shifting to more balanced conditions in the upper-price ranges.
As of October, prices have eased by four per cent relative to the highs reached in May. This is considered a relatively small adjustment when considering price movements in other large cities. It is also important to note that the October benchmark price is still nearly 10 per cent higher than levels reported last year.
Sales growth in the over $700,000 price range this month were not enough to offset the declines in the lower-price ranges, causing detached sales to ease by over 29 per cent compared to last year. Limited supply growth in the lower-price ranges continue to keep conditions exceptionally tight for lower-priced detached homes.
In October, inventory levels for detached homes were under 2,000 units, nearly 35 per cent lower than typical levels reported for the month. Moreover, over 42 per cent of the inventory falls in the upper-price ranges of the market. This is likely creating a situation where pricing trends will vary depending on price range.
Overall, detached prices did trend down relative to last month and peak levels in May but remain nearly 12 per cent higher than levels reported last October. The strongest year-over-year price gains have occurred in the North and South East districts.
While sales remain lower than last year’s levels in October, recent pullbacks have not offset gains from earlier in the year and year-to-date sales improved by nearly three per cent. A pullback in new listings relative to sales caused the sales-to-new-listings ratio to push above 80 per cent this month and inventories to ease, leaving the months of supply just over two months.
The benchmark price, while easing slightly compared to last month, remained over nine per cent higher than last year’s levels. Year-over-year price gains have varied from a low of nearly eight per cent in the City Centre to a high of 16 per cent in the North district.
Row sales continue to rise relative to last year supporting a year-to-date gain of nearly 42 per cent. At the same time, new listings this month eased ensuring that the sales-to-new-listings ratio remain exceptionally tight at 106 per cent. Falling inventories and improving sales have ensured this market continues to favour the seller with less than two months of supply. This has also prevented the same adjustment in price.
As of October, the benchmark price was $361,200, less than one per cent lower than the peak achieved in June of this year. Overall, prices remained nearly 15 per cent higher than last year’s levels. The strongest price gains occurred in the South East, North East and North districts.
Apartment sales continue to rise over levels reported last year contributing to the year-to-date increase of over 56 per cent. Improving sales were also met with gains in new listings, but as the growth in sales outpaced the new listings activity, inventory levels continue to trend down. As of October, the months of supply remained just below three months, the lowest level recorded in October since 2013.
In October, the benchmark price was $277,800, similar to last month and nearly 11 per cent higher than last year’s levels. Some of the strongest price gains have occurred in areas outside of the City Centre. Despite persistent price growth, overall prices remain nine per cent below previous highs set back in 2014.
REGIONAL MARKET FACTS
Easing sales over the past several months have not been enough to offset earlier gains as year-to-date sales reached 2,269 units, over 11 per cent higher than last year and on pace to hit a new record high. The growth in sales was possible thanks to a boost in new listings this year. However, the gains in new listings did little to impact inventory levels which remained well below levels traditionally seen in the market in October.
While conditions are not as tight as they were earlier in the year, the months of supply remained exceptionally tight at one and a half months. Despite persistently tight conditions, prices have trended lower from the earlier highs. Airdrie hit a record high price back in April of this year at $510,700, prices have since fallen by six per cent since then yet remain over 14 per cent higher than levels reported last year.
A pullback in new listings relative to sales activity caused the sales-to-new-listings ratio to push up to 90 per cent once again, causing inventories to trend down relative to last month. While overall inventories still remain higher than the exceptionally low levels seen last year, levels are still well below what is typically seen in the market.
While prices have eased off recent highs, at a benchmark price of $507,000, prices remain over 16 per cent higher than last years levels. Price growth has been mostly driven by the detached and semi-detached sector which have reported year-over-year gains exceeding 18 per cent.
A pullback in new listings likely weighed on sales this month as the sales-to-new-listings ratio pushed above 100 per cent causing inventories to remain exceptionally low for October. While conditions are still not as tight as they were earlier in the year, the shift this month did little to support more balanced conditions.
Persistently tight conditions did slow the pace of adjustment in prices as the benchmark price was $537,800 in October. While prices have eased from the high reported in May, they remain over 11 per cent higher than last years levels.
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Pete and Katelyn’s Market Update:
Katelyn: Hi guys. It is Pete and Kate here with another market update.
First of all, before we start anything, can we please talk about the Toronto and Vancouver market? What’s going on there?
Pete: Yeah, I think it’s important cuz it adds some perspective to what we’re living through in Calgary here. It’s, it’s amazing. Like you boy, I tell you, you turn on the TV or, or the radio or, you go on the internet, it looks like, Oh, real estate is, and and it’s true like for some parts of the city, like I was hearing that in Toronto new home, single family, new home sales. Yeah. Were down 96%. 96.
Pete: Yeah. So that’s like they, they sold in a city like Metro Toronto is like 6 million people. It’s bigger than the population of Alberta.
Right. They sold 45 new homes, single family homes in Toronto last month or the month. Like, you know, a month sales now is 45 in a city of 6 million people, Six, 6 million people. It’s really down. So when you were telling me that sales were down substantially in both cities too, right?
Katelyn: Yeah. Almost 50%. In both cities.
Pete: In both cities, yeah, exactly. That’s crazy. Sale prices are down like six per, almost 6%, like 5.7 or something like that. Yeah, in both cities too. So when, when, when sale prices are, You know, almost 7%. It goes to show you that we are actually doing a lot better and there’s different reasons for that. Our economy’s on fire, people are moving here for lower home prices and stuff like that.
And we never experienced the level of price growth that they did too. So we can’t really expect the same results. But still, you know, we got some to be thankful for here in Calgary, Alberta with what’s going on cuz year over year our prices are, they’re about almost up by 10. 9.6%. Yeah. Our benchmark price.
Yeah. For residential. So in fact detached is even up more than that, aren’t they?
Katelyn: They’re actually up almost 12% too at 11.7%. Yeah. But that’s actually not the best market. That’s, that’s doing well right now.
Pete: No, No. In fact the royal, the row house or townhouse market is even doing better than that.
Their prices are up like almost 15%. Yeah. So the average townhouse in Calgary now is over $360,000. They continue to go up from here. So an increase of 14.5%. Not like, again, not like Toronto and Vancouver had when they were booming, but this is great considering that we’re seeing price in other markets, And by the way, I think we are seeing some month over month price declines in some of the higher end markets and some of the detached home markets. We’re not seeing that in some of the some of the more affordable housing that we’ve got here in Calgary. So yeah, the detached is is up 12%.
Detached is up about 10%. And apartments are up about 10% as well over from last year. And like we mentioned, townhouses are up almost 15%, so prices are still up from last year, like what they’re doing month over month. Like I said, the higher end is coming down a little bit, retracting a little bit.
The the more affordable stuff like the townhouses and apartments, they’re all still there’s strong, strong markets. So, And why is that? Is that like a supply and demand thing?
Katelyn: It is supply and demand thing. So let’s talk about. Sale is part of it. So right now sales is actually down 15%, but like I said, compared to what’s going on in the Vancouver and Toronto market, that’s not that bad.
Pete: Well, it’s not that bad. Yeah. You know, but it’s always the ratio. Right. So right now our sales are down 15%, but our listings are also down about 13%. So, you know, if supply and demand are both tracking, You know, we still have a very, very tight seller’s market overall. So it’s so tight right now that we got like a two month supply of homes for sale in the market. So it’s still really, really good. But you have to know what market you’re in, and that’s why, you know, like forget about reading the national paper and getting a national number. Forget about even Calgary numbers. Like what you really want to do is say, when people say to me now, they say, “Pete, how’s the market?” I really have to ask ’em a few questions. Like you want the detach market, you want the apartment market? Do you want the northeast or do you want the southwest? Like what are you looking at? Because I tell you every market within Calgary right now is, is slightly different. And so if you’re thinking of buying or you’re thinking of selling, You know, hire a professional agent like Kate and and she’ll get you the right numbers because otherwise yeah, you could be misled by what you’re reading and then you could get a realtor coming in and saying, Oh, we got a bargain price your house just to get it sold. Cuz the market is so bad when it’s really not in some areas. So, so yeah, get some good info. It’s, it’s totally worth it.
Katelyn: So let’s talk about the different, Around Calgary, Which one is actually doing the best right now, Pete?
Pete: It looks like the, like North central area, So not northeast, not northwest, but the area, and this has been the trend for a few months now. Sort of the area between like Harvest Hills and Panorama. It’s up almost 15% year over year. And this is this is benchmark price, so the benchmark price up there is like $500,000. And that’s up 15% from last. The close behind it is actually the northeast. Right?
Katelyn: Yeah. It’s up by almost 14%. Benchmark price, 13.8%. Yeah. We’re still looking at city center being the lowest right now.
Pete: Yeah. The city center is hurting, and I, and I’ve been saying this for a long time, is we’re actually seeing the condo market really pick up. Yes. It’s selling like mad.
But prices haven’t reflected that yet. Downtown, they, we haven’t seen the bump in prices yet, and I’ve been predicting this for a few months. And every other prediction I’ve made, I have to say, has been coming true. So, wait for this is, I think what we’re doing downtown is we’re still burning through a bunch of excess inventory that built up during the collapse of the oil and gas prices and covid and stuff like that.
You know, the downtown condo market just left. and but it’s coming back, it’s roaring back. If you see the sales numbers, it’s really, really strong right now. So it’s just a matter of time before all that excess inventory’s burnt up. And you’ll start to see I think probably some relatively dramatic price increases even in a market like this where the government is is raising interest rates, like trying to cool down inflation.
But I think, you know, and I think at some point that has to stop, you know, is I mean, I have a couple thoughts about interest rates. One of them. They were, they were extraordinarily low for, for too long. Like, you know, that’s the reality. So, but now what the government has done is kept interest rates for so long, are so low for so long that they’ve just encouraged everyone to get up to debt, to their eyeballs. And now when they’re raising it, it’s gonna get really, really expensive for everyone to live. And I think, you know, in a country like ours, where heck housing is a major part of our gdp. And it’s because we’re a country that imports people. And we sell them homes and we have no inclination to stop that.
So we’re, you know, as of this year I think we wanted to allow 400,000 immigrants in, and I heard rumors of like a million next year. So, you know, if we’re still continuing to bring people into this country and then sell them homes, we’re gonna need, and they’re gonna be able to have to afford it. And that’s gonna be the tough part now with these interest rates. But again, because they’ve had such a bigger negative effect in areas like, you know, Southern Ontario and the Fraser Valley, including Vancouver and places like Kelowna. I think Calgary’s just gonna become more and more of a desirable place to live.
And I think we’re gonna be pretty. Insulated from some of the, some of the crap that’s gonna happen elsewhere. So yeah, time will tell, but like we said you know, if you’re thinking of buying or you’re thinking of selling, get in touch with us or a professional realtor that comes recommended to you and make sure that you know your particular market, whether it’s a
Katelyn: townhouse in Tuscany
Pete: or bungalow in Bennington.
I, I think I said two story in Tuscany.
Katelyn: Did you? I was thinkings town.
Pete: Whatever, a town hills in Tuscany or a bungalow in Benington . You wanna know what market, what your market, your particular market looks like. So, so do get in touch with us and we’ll be able to help you with that. Another little note is if you don’t like watching these, I don’t blame you cuz Katelyn should probably find someone better looking to have to watch. But in the meantime what you can do is we do have a podcast too. It’s called the Pete de Jong Show. And if you go on any podcast platform, you should be able to find it there. Then you can just listen to it on the way to work, whatever, and get an update on what the market is doing without having to sit and watch us.
But anyways, so do that. If you don’t mind, like, and subscribe this video as well so that you’ll, you won’t miss next month’s. And then feel free to leave a comment too. We’re always hoping to criticism usually we’re just criticizing each other, so yeah. It’ll be good to get it from somebody else.
But that’s how we show affection.
Katelyn: Can I also just mention thank you to Pete for actually showing up to this video today?
Pete: Oh, I’m here. He was on vacation. Guys.
Kate’s doing this cause she’s usually away at some beach and she’s yeah, you’re, I’m here. Yeah. Wait, you’re here In between trips to Mexico and Vegas and BC and Vegas. Did I mention vegas.
Katelyn: No idea what he’s talking about everywhere.
Pete: I went away for four days with my son. That was the extent of my holidays this year. Oh, and my, my three day camping trip with my wife and my 40 year old trailer.
Katelyn: You went to Ontario in the summer!
Pete: I don’t remember that. I went to Detroit though.
So if you wanna know about real estate in Detroit, it’s, it’s incredible. You have to check it out. Go on Google Earth. Even they just look around. A 12 mile band around the, the city center that’s basically just devastated. Like every city block will only have like one or two homes on it.
Pete: Yeah. And, and you know, or if they have five of them, three of them are like, burnt out and empty and vacated. Like it’s, it’s the craziest thing. So kind of look this up. Yeah. You have to see it. It’s nuts. So but anyways, yeah, we had a great time there. Saw an NBA game, an NFL game, and a college game. Saw Michigan versus Michigan State.
Just crazy. 110, 111,000 people in that. So it was fun, fun way to hang out with my son for a couple days. But anyways call us when you wanna buy or sell. That’s enough about us. Call us when you wanna buy or sell. We’re here for you and to help you make really good real estate decisions.
Take care. Bye guys.