Let’s look back at February’s housing data for a temperature check on Calgary’s Real Estate market (data from CREB (link)).
My intention is to provide you some of my insight and key housing data organized in a way that helps you understand price trends.
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Detached Housing Data
Sales To New Listings Ratio:
This ratio combines homes exiting the market (sales or expired listings) with homes entering the market (new inventory). A 100% indicates a 1:1 ratio of homes leaving and entering the market. In this 100% example, there would be no build up of inventory.
Look back to late 2020 sales to new listings data. I can see how a inventory shortage of today started to form, especially with November and December not adding any net new listings for sale.
Calgary’s detached market is seeing a continued rise of this ratio month over month and year over year. Where is all the inventory? Is more coming? Many buyers I’m working with are asking this question. I think the simple answer is yes, more inventory should be coming up for sale, but how much is TBD. I think increasing values and reduced COVID infection rates might draw more sellers into the market that might have otherwise “waited to see“.
Absorption Rate:
This ratio combines all current inventory and sales to gage how long it would take (in months) to liquidate all homes for sale. Calgary’s absorption rate is a combination of low inventory and increased sales (levels not seen since 2014).
Lower absorption rates indicate upward pressure on pricing as sellers have the advantage from competing buyers for limited inventory.
February Sales: 1,123 (up 65% y-o-y).
February Inventory: 1,927 (down 29% y-o-y).
February Days on market: 37 (down 29% y-o-y).
Average Price:
Seasonally, prices trend upward in the Spring market, which has come early this year. Price support, and in many cases upward pressure of pricing, continues in Calgary’s market.
Apartment Unit Data
Sales To New Listings Ratio:
This is a positive trend for condo owners. Month over month and year over year sales to new listing data increased. The condo market in Calgary has been dogged with oversupply for years. Eventually, more and more buyers will see value in purchasing a condo again. Is that time close? Here?
Absorption Rate:
Year over year and month over month reduction of Calgary’s condo absorption rate is positive for price flooring. This is a seasonal trend, so let’s continue to monitor this through Spring and Summer to get a better sense of the condo market. (Let’s smile and nod to April 2020 absorption rate, wow).
Median Price:
Seasonal median price numbers are following long term trends. Supportive sales to new listings and absorption data are helpful to condo price flooring. Do you think the condo market bottom is here? Behind us?
Conclusion:
From my post (link) reporting January’s housing data, much of what is driving our market holds true:
- Low inventory. I think people are less willing to list their homes for sale in a pandemic (shocking).
- S.T.I.M.U.L.U.S. A lot of stimulus. Look around – it’s everywhere. The system is flush full of money.
- Pent up demand. 2020 was a pause in life, for many reasons. I think people are wanting to move forward. Buyers who held off on their purchase are entering the market.
I also wrote you about inflationary pressures (link) that appear in assets I.E., housing. This has not gone away either.
We are in an era of credit expansion; resulting in Real Estate asset appreciation.
If you plan on selling and purchasing, I think ensuring you have a multi-prong Mortgage approval plan is wise. Reach out so we can create that together.
Buyers, prepare for competition OR to act quickly. I recommend all documents on hand and a credit check as a minimum requirement to writing an offer to purchase.
Reach out to discuss your Real Estate plans with me: 403-809-5447 or chad@canadamortgagedirect.com
Talk soon,
Chad Moore
