The Calgary Real Estate Board’s (CREB) latest statistics revealed the city’s housing market had a strong, if balanced, August, with detached homes leading the way.
And according to Jesse Davies, a local Calgary realtor who runs his own team at Century 21 Elevate, those are positive developments.
“As a realtor, I prefer this over hectic markets. It’s a lot more stressful for buyers and sellers and it makes life and real estate more stressful because any time a listing hits the market, everyone scrambles for the next 12 hours,” Davies told CREW. “In the detached segment of the market, prices increased across all districts in the city, but they trended down in the city centre compared to last month. However, I felt like August was a vacation month for most people, and while volumes dropped off for the most of the month, the last week of August and the first week of September were hectic again.”
Sales in Calgary rose by 37% year-over-year in August to 2,151 units, says CREB, albeit at a moderated pace compared to earlier this year. Nevertheless, there were 19,516 year-to-date transactions recorded, smashing previous totals during the same eight-month periods during each of the last six years.
“Sales have far exceeded expectations throughout most of the pandemic, driven mostly by demand for detached homes. At the same time, supply could not keep pace and conditions shifted to favour the seller, something that has not happened in over six years,” Ann-Marie Lurie, CREB’s chief economist, said in a news release.
“With more buyers than sellers, prices rose, providing opportunity for may of the move-up buyers in the market. Over the past several months, we have seen some adjustments in supply relative to sales, helping move us toward more balanced conditions.”
Noting that August 2020 was an aberration because of the pandemic, Davies pointed out that detached home sales during August are 81% higher than they were during the same month in 2019, citing COVID-19 as the preponderant driver, because “people want their own backyard, privacy, and their own front door, as opposed to sharing common spaces.”
The fact that Calgary has starter homes in the detached segment hasn’t been lost on the rest of the country, added Davies.
“The work-from-home movement has definitely brought a different kind of buyer to the Calgary market, and that would be people who can’t afford to live in Toronto or Vancouver, and for $800,000 you can get a beautiful house here,” said Davies. “We’re getting quite a bit of migration from outside of the province. With the pandemic, we’re not getting people from different countries but that’s also a sign that when the borders start opening, and when people get more comfortable with the idea of relocating, they might choose Calgary.”
The city’s real estate market is balanced because of the laggard condo sector, but that’s actually where all the opportunity is, says Davies, because there’s long-term appreciation potential. Due to the inventory glut of the last few years, most condo projects are recalibrated into purpose-built rental developments, but the condo inventory will gradually get absorbed over the next few years.
“The rest of the housing sectors have had really healthy gains but the condo market, because of both COVID and the surplus of inventory, has seen downward pressure on pricing,” said Davies. “But the mid- and long-term horizons should see healthy appreciation. When the pandemic is behind us, people won’t be afraid of sharing elevators and touching buttons. I’m already getting a lot of calls from Vancouver and Toronto about condos because there’s an overabundance right now. As the spread between low- and high-rise homes becomes too wide, which it inevitably will, affordability will push people back into the condo market, so it’s a good idea to get in early while the prices are still low, because they won’t be for long.”