It’s Calgary Market Update time once again. And this one is a doozy!
In this report we’ll discuss the key items you need to know about the market data just released from February 2021. And at the end I’ll give you a few bits of advice if you are in the market to buy or sell.
Well, 1 month ago I presented up a bunch of articles that seemed to be painting contrasting pictures of our real estate market. Well, it’s funny how much can change in one month. The headlines are now all positive, such as these 2 top stories from the other day…
So, the only question that people seem to be having right now is about how long this momentum will be sustained. With oil prices rising and Covid restrictions easing around much of the globe, there is optimism and hope in the air.And with that comes the consumer confidence to make life happen and to make real housing moves.
THE SALES SUMMARY
So, let’s take a look at the key facts from the past month…
FACT #1
As good as January was, with a 40% increase over 2020 sales figures, February bested it with a 58% increase in sales.
As you can see by the graph, we were neck-and-neck with 2014 and beat every other year in the last 15 with the exception of the blockbuster results in 2007.
Here is another representation of how the month went in relation to last year…
This is not the pace we are accustomed to having. Last month I said that the last week of January was feeling more like an April or an August, not a January. As we finished off February we were selling a daily average of 74 homes per day! This is up from the average of 54 we had in the last week of January.
This is a 38% increase in the pace of sales in just 1 month!
One additional thing to note: February was a stronger sales month than our best month in 2020, which was July, when all the pent up demand came back to market as re-opening started to happen.
The graph below shows the progression from the start of the year…
Sales are up across all property types, as well. Here is a quick summary:
Detached is the leading the way with a 69% increase over last year. Row Homes had 61% growth. Semi Detached experienced 31% growth. And the apartment segment is up 35% over the same period last year.
So, all across the board we had a winner of a month in terms of our sales.
THE INVENTORY STORY
FACT #2
Let’s talk inventory. Last month I mentioned that throughout the month we saw the gap between active listings on the market in 2021 continue to grow versus 2020.
Which meant that, despite the increase in sales, there wasn’t as much of a rise in new listings. This was a little more tempered… or just possibly just delayed. And that was the key term – delayed.
Here is a graph showing the Active Inventory in 2021 vs 2020…
This month we flatlined. We started and finished the month with the same gap in inventory, which is about 21% less than 2020. That equates to about 1,200 homes.
Now, this is saying something because I just finished saying we had a 60% improvement in sales, so you’d think that would cause inventory to decline. But that didn’t happen because of the second half of Fact #2…
Our new listing inventory started to come back online, which didn’t seem to happen in a big way in January. Last month we listed 2,848 properties, which was an increase of 16% from the same period last year.
And we currently have 4,519 properties on the market.
Looking at this relative to the last 15 years, you’ll see we are inching further and further down the “low” inventory track. This is the 4th lowest inventory February in the last 15 years.
Again, all 4 market types are acting a little different. Here are the quick specifics:
Detached has 30% less inventory than the same period last year. Row homes have 7% less inventory. Semi Detached have 40% less and Apartments remain 2% lower.
THE PRICING PICTURE
FACT #3
Prices! Last month I commented that we have the perfect supply and demand dynamic to be comfortable in predicting price increase in our market… and this is what is starting to happen.
In our market as a whole, we are seeing a 4% increase year-over-year. The Detached market is leading the way at 5% improvement, 4% with Semis, 1% in both the Row house and Apartment markets.
These are all positives early in the year, which is good sign for the recovering Calgary real estate market. In the following graph you can see where things started to turn around…
We bottomed out in July 2020 and then it’s been an upward climb ever since.
Here’s another graph that shows how pricing changes are different across the various property types…
Here you see almost all positives across the board. I can remember so many times in the last 5-6 years that this graph was the complete opposite, all negatives and only a handful of positives. So, this is a welcome series of events for Calgarians!
Okay those were the major Facts 1, 2 and 3.
Now let me provide a short section of Advice with some more insider information into these numbers.
If you’ve followed this far, it’s fair to say that the market is rocking & rolling and in far better shape than we’ve experienced for quite some time. But…
I want to also temper the excitement just a little bit with some extra bits of reality that are not being talked about enough.
There is “buzz” in the air and the word “hot” is being thrown around by agents, the media and our neighbours. I agree with the buzz, but I also want to keep things in perspective.
So, a couple of things:
ADVICE FOR BUYERS AND SELLERS
Sales to New Listings Ratio
This is currently sitting at 65%. But this means that 35% of the new properties hitting the market are not being scooped up. Now, this is great, yes, it’s up from 47% in 2020… but it certainly doesn’t mean that everything hitting the market is being sold.
Sales to List Price Ratio
This is currently sitting at 98% – up from 96.7% in 2020 – but despite the attention this number is getting, it’s not like the “List Price & Beyond” situations we’re seeing in parts of B.C. and most of Ontario.
Again, this is a great market, but it isn’t “pick your price & get it” territory.
Days on Market
We are currently sitting at an average DOM of 45. This has improved from last year’s 57, but it’s still a month and a half, on average, throughout the city.
This is better than we’ve seen for a while, but we still need to remain tempered in our pricing and listing decisions, as realtors and as consumers alike.
And now what I believe to be the true indicator of the pace of our market – Months of Supply.
Here is a graph showing the data from just February…
As you can see, the Months of Supply have continued to drop, which means the pace continues to get faster.
The Calgary Real Estate Board (CREB) data will show 2.46 at the end of the month and my graph shows about 2. The reason for this difference is that I do my tracking by the day and, as a result, it is a more accurate representation of the market.
Two months of supply is a great, healthy market. That stat coupled with the DOM data, the Sales-to-List-Price Ratio data and the Sales-to-New-Listings ratio information, paints the full market picture I want you to be aware of.
So is stuff selling? Oh yeah, in the bunches. But it’s not everything. It’s not “Pick Your Price” days, and you may even need to be patient for a bit. So, it would be my advice to price dead into the market right now – price fair and maybe even a little bit incentivised and the market will respond.
If, on the other hand, you are priced “over market”, you will be missed. Trust me, I see sellers in this position every day, scratching their heads and hoping the market will catch them. It would in other markets around the country, just not here in Calgary & region.
Now, let me comment on the Months of Supply per Property Type:
Detached is the hottest segment at 1.4 months of supply.
Row homes are at 2.6.
Semis are at 1.7.
And Apartments are at 4.5.
So, again, like a broken record, be sure to understand what market you are buying or selling in – it continues to differ greatly.
So, that is about it. Thank you for following along again this month!
