Chad Moore Calgary Mortgage Broker

What Is Happening With Calgary’s Real Estate? Below Are Key Data Points To Help You Understand Where Prices Are, And Where They Might Be Headed!

Businesses are re-opening, cars are back on the streets, and more people are working again. I think the resounding sentiment is the worst is behind us. So where does that leave us?

I’ve consolidated some data points to help you gain some context on current prices AND where they might trend in the near term.

I think the overarching theme of this content is putting my finger on the pulse of housing supply. When I layer that with housing demand, and put the two large spheres of information together, I have a better idea of housing in Calgary.

All data from Calgary Real Estate Board (CREB). Please reach out in messenger if you have any questions related to your sale or purchase plans.

Detached Homes

Sales To New Listings Ratio:

This ratio combines new listings entering the market with home leaving the market (sales or expired listings).

A number less than 100% indicates there are more homes entering the market for sale versus leaving the market for sale. The lower the number, the more future inventory I can anticipate coming for sale.

May 2020 saw a detached sales to new listings ratio of 50%. This ratio is above 2018’s level but lower than the other three years of data displayed.

The sales to new listings ratio did not get whacked by COVID-19 because there was a simultaneous reduction of new listings AND sales. This balanced kept this ratio in reasonable levels.

The absorption rate on the other hand …

Absorption Rate:

This data point combines new and existing housing inventory with sales volume. This gives us an indicator of how many months it would take to liquidate ALL of the inventory listed for sale.

For context, the higher absorption rates are a “buyers” market which means they tend to have the upper hand in negotiations. Lower absorption rates are a “sellers” market, giving them the upper hand. Between 2-4 months is a “balanced market”.

The reason for the large spike of absorption rate in April was due to the cliff sales fell off. In the month of May, sales improved bringing down the absorption rate into a more understandable level.

Sales May 2019 = 1,180
Sales May 2020 = 670

Inventory May 2019 = 3931
Inventory May 2020 = 2,922

Sale to list price ratio May 2019 = 96.74%
Sale to list price ratio May 2020 = 95.77%

Days on market May 2019 = 50
Days on market May 2020 = 54

Considering the health, oil and financial crisis we are in the middle of, I think this data could certainly be worse.

Average Price:

The tail of two markets continues in Calgary. One market is detached homes below the $500,000 price point and the other is north of $500,000.

Lower price homes are seemingly more attainable as a family income of about $100,000 with 5% down payment can purchase $500,000 (pre July 1st 2020 Mortgage rule change).

Higher price points require larger down payments OR higher incomes to service larger debt loads. In the face of our oil crisis, high earner incomes in the oil industry are facing some headwind.

As quoted from the Calgary Real Estate Board chief economist, “prices are down in all price ranges, but the greater share of sales are priced below $500,000. Significant job loss throughout the typically higher-paid professional and technical services sector points to a longer adjustment period in the housing market, particularly in the higher end of the market”.

Apartment Data:

Sales To New Listings:

The amount of new inventory combined with inventory departure is relatively healthy indicating lower accumulation of net new apartment listings.

However, the carry over inventory from pre-pandemic times is weighing on the market.

Absorption Rate:

With low sales volume and high total inventory, the absorption rate is very high for Calgary’s overall apartment market.

Sales May 2019 = 313
Sales May 2020 = 137

Inventory May 2019 = 1654
Inventory May 2020 = 1,388

Sales to list price ratio May 2019 = 96.10%
Sales to list price ratio May 2020 = 94.53%

Days on market May 2019 = 70
Days on market May 2020 = 67

Median Price:

The median price of an apartment in Calgary is down. I think many reasons contribute to this happening (low volume of top end apartments selling, low overall sales volume, trend to lower price points, over supply).

Conclusion:

We continue to face economic headwinds, from various angles, that are weighing on Calgary’s overall housing market.

Within our overall market, there are smaller sub-markets, quadrants, areas, price points, styles of homes etc. And some of these more niche markets are more boyant than others.

Once buyers distill down their budget, and purchase plan, I see them begin to have a clear picture of the reality of THEIR market and their purchase plan.

I’m still seeing well priced/maintained homes, in desirable areas, have buyer demand. This puts a price floor on the market where buyers, in the face of macro-economic headwinds, are willing to buy.

Please also work with a trusted or referred Realtor. I’ve heard of two instances where home owners are not happy with their purchase a year later. I think that’s sad.

I hope this info has been helpful!!

Talk soon,
Chad Moore