Welcome back to another Calgary Real Estate Market Update where I will be discussing the latest market data and providing my analysis on the statistics from the month of January 2021. And at the end I’ll give you my few bits of advice if you are in the market to buy or sell.
First, let’s set the stage for what you’ve already heard in the last few weeks about our 2021 real estate market:
THE SALES SUMMARY
January 14: Calgary property values pounded by pandemic as city sends out 2021 Assessments (Calgary Herald)
January 25: Calgary Real Estate Board predicts Covid-19, decreased demand for oil to hamper housing market(Global News)
January 29: Calgary real estate forecast to continue strong sales momentum, even see slight price growth(Calgary Herald)
February 1: Calgary real estate experiences strongest January residential sales since 2014 (CTV Toronto)
So, what is it? What is the true story?
As it’s nearly impossible to find time to filter through all the headlines and have the time to read the various points of view, today let’s focus on the facts.
January was one heck of a month for us in terms of sales. This was the best-selling January since the peak of 2014. And it rivalled 2013.
Those were big years for Calgary real estate, so that is saying something, for sure. Our Calgary Real Estate Board data reports 1,208 sales for the month.
You’ll see by the graph that all month long we were far outpacing the sales from January 2021.
So, what does that really mean? Numbers are just numbers unless they are related to something tangible.
- We sold 40% more than January of 2020
- This January had more sales than we had even in February of 2020
- And it was better than our month of December (which was a big month, and something that didn’t happen last year when activity dropped off in January).
Now, that isn’t the full sales story. Check out this graph showing the climb of sales activity throughout the month.
With 1,208 sales in January, that equates to an average of 39 per day. As you can see, the weekly Sales Per Day numbers grew significantly over the month.
Or, in other words, the “pace of sales” increased as we went along
Where we ended up over the last week of January puts us on a sales-per-day pace that is closer to an APRIL or an AUGUST… certainly not one in January. So this is good news for those wanting to see continued momentum in our housing market.
If you looked at our sales numbers alone you might wonder if we were still undergoing a pandemic, or if there was still reason for concern in our oil & gas sector.
Our New Listings to market and our overall Active Inventory tell a more accurate story. In times such we are now in, the “caution” flag is still waving for many, as is the “pause” button. It only makes sense that fewer real estate consumers would have the ability, or even the desire, to undertake a house move during these times. And that, I believe, is why our total inventory remains tempered.
The following graph shows the continued downward trend in active inventory going back to the beginning of August when our “sales activity” was really starting to wake back up.
Inventory just never picked up and we started the fall in inventory to where we sit now. We finished the month with approximately 20% less inventory – nearly 1,130 fewer homes on the market today than at this time one year ago. This gap between last year and this year grew throughout the month from 942 up to 1,132.
The amount of new listings to market was about 10% more than last year, but it was easily absorbed by the increased sales demand I talked about earlier.
Now, as low as our inventory may seem, this is also relative, as well.
Here is a chart from the Calgary Real Estate Board that shows the inventory at end of January for each of the last 15 years.
When you look at the red line you’ll notice that it’s a little lower than we have been used to, but when you look at those 15 years from 2007 to now we are right on average for total listings available. So, it feels tighter than we are used to, yes, but it’s more in line with a balanced market than with the heated markets being experienced by of many our other North American counterparts.
We’ve got the perfect supply and demand situation where one would expect house values to push higher. With sales up 40% and inventory down 20%, without any semblance of a rush of new homes to market to dilute the current offerings, it makes total sense why many have an optimistic outlook for Calgary house prices.
Year over year we recorded a 1.9% improvement in our benchmark sale price to $423,800. This number is higher than any figure we reported in 2020, though not as high as any month in 2019.
Beyond benchmark price there are a few other indicators that show us that prices will at least hold, or, as predicted, move upwards:
When we have half the Months of Supply coupled with nearly double the Sales-to-Listings Ratio and when our average Sales-Price-to-List-Price Ratio is above list price, the idea of an adjustment down is simply not possible.
So, as we sit in the second month of the year we can be fairly confident that our pricing picture has improved and we will continue to claw back to 2019 levels and maybe beyond.
Now, normally by now I would have gone into greater detail on each specific property type, but I felt this overall market information was most
important to report on first. That being said, let’s take a look at the property-type specifics now…
The highest growth was in the Semi-Detached market at a whopping 67% improvement over January 2020.
Then we had Detached at 42%, Row Houses at 33% and even Apartments at a 27% increase over January 2020 numbers
The lowest inventory position is found in the Semi-Detached market, with 41% fewer homes on the market in comparison to January 2020.
Detached was at 33% less, Row Homes at 9% less and Apartments have finally shaken off the excess inventory and are sitting at 2% fewer units available than at the same time last year
All the property types are pretty close, from +3% for Detached homes to minus 0.5% for Apartments.
The dynamics are very different all across the board and they do change a lot depending on price range, the district and even the community. So, let me show you how we fared across the price ranges and across the various districts.
In this Price Ranges chart, the green means we outsold last year by at least 5%. As you can see, most price brackets are doing better than at this time last year with only a few coming in at slightly less.
And now across the districts.
If you are looking to use some of this information you heard today for your decision-making purposes, please reach out to have a detailed strategy call geared to your specific situation. It could look much better… or could be worse. Don’t leave it to chance.
And finally, here are a few last thoughts for those that are in the market currently, buying or selling.
It’s certainly not the market that we are used to having at the beginning of the year. The sales numbers are firing on all cylinders right now and our inventory continues its trend towards being modest
You can see the situation represented in these two graphs. The first shows Months of Supply.
And this one depicts the Sales-to-Listings-Per-Day Ratio.
When we look beyond the headlines, it is clear that we have a stronger than anticipated market in Calgary despite all the unemployment, the restrictions, the fear, the frustration and the continued struggles of our oil & gas sector.
As we continue into February our Sales-per-Day Ratio is getting stronger and the speed at which we are absorbing all the inventory that is coming to market is increasing, too.
Simply put it means our market is healthy.
Many markets all around North America are in “red hot” mode and, to me, this may be exciting for some but can also be incredibly scary for many others.
If I were to pick one of these real estate markets, I’d pick ours as we have hit our bottom, we’ve stomached some major setbacks with our economy and, as a result, we stand to come out of this all in a steady, consistent and overall fair way. In real estate terms, more in the way of balance.
There is much call for caution in those markets as they are being deemed over-inflated and in need of a way to achieve a soft landing.