Hey Guys!

Here your report on Calgary’s detached and apartment housing sectors. At first glance, Calgary is fairing MUCH better than many other housing regions in Canada!

Why? Well for many reasons all mixed together.  Some reasons that come to mind are a) less expensive housing, b) employment opportunity, c) life style—mountains, rivers, etc and d) Space (now I’m reaching … :-)).  

Tell me—what was important for you to move here?  Or, what is important to you deciding to remain living here?

Here is the CREB data from October 2022 to help you make sense of our current market, and near term trends. 

Detached Homes

Sales To New Listings Ratio

This ratio combines homes exiting the market (sold/expired listings) with new inventory. 

Last year is a good example of how this ratio can anticipate tendencies in the market.  October 2021 saw a sales to new listings rate of 100%—for every home entering the market, there was a home exiting the market.  

This has the tendency to indicate near term supply will be less unless there is an equal reduction of demand.  Last winter was met with very little supply, and housing demand on steroids.  We know what happened to prices. 

October 2022 has a lower sales to new listings ratio of ~81% (much healthier).  Seasonally, we can see the trend is up and to the right, it’s important we note the angle we exit the calendar year with.

Absorption Rate:

The absorption rates tells us in months how long it would take Calgary to liquidate ALL detached housing inventory, at the pace of current sales. 

If there is one chart to capture the health of a housing market, I think this chart would be one to consider.  This data combines current inventory and sales—at a glance. 

Lower absorption rates indicate negotiating leverage to the seller, with higher absorption rates being better for buyers. 

Again, we can see December 2021, and Jan-Feb 2022 with crisis level absorption rates to the lower bound.  We know what happened to prices. 

October 2022 is slightly lower month over month, and trending sideways around 2 months.  This is helping put a floor under prices (see average/median below).

Average Price:

Reminder: Real Estate prices are hyper local—please consult with a trusted Realtor for purchase or sale advice.  That said, I think noting average trends is worth highlighting.  

In both average and median price data, numbers have ticked higher in October.  With sales trending sideways month over month, and inventory not dog-piling the market, could a price floor off the COVID high be in?  Maybe. 

Apartment Housing

Sales To New Listing Ratio:

Another good looking chart for Calgary apartments!  Seasonal trends are in-tact, but at more favorable levels that indicate lower supply in the New Year.

Absorption Rate:

Absorption rates for Calgary apartments is at levels not seen since 2013/2014 (see the chart I dug up from my archives)!

Median Price:

Median price is at the top end of this data range.  In the face of restrictive Mortgage interest rates, this housing segment is fairing well with potential upward price pressure.

Conclusion:

Last week I wrote you about how incomes need to rise by about 17.5% to afford the same home (read that post here).

Well, despite that fact—Calgary housing is fairing nicely.  Money/people are coming in from out of Province, and I am hearing the oil and gas sector is doing well.  This matters!

I’m not seeing any leading data or other reasons for a housing rush we experienced earlier this year.  But I think a rather healthy Spring market is shaping up (at this point). 

What are you seeing and hearing out there?

Thank you for reading!

Chad Moore

P.S.

Halloween candy.  I made the mistake of buying a rectangular box of candy too soon before Oct 31st …I ate the whole thing, oops. 

P.P.S.

Let’s all be reminded of winter driving …and I’m looking in the mirror here.  The first snow fall on Nov 1st, I pulled out of my neighborhood with too much acceleration and skidded into the opposite curb.  Luckily no immediate damage to my truck.  Rookie mistake.