The best half a year of all time in Greater Calgary Real Estate!! Now what?
Despite the recent ‘pull back’ being discussed in the headlines everywhere we have just completed the greatest 6 months of sales in our history.
So, regardless of where you sit on the ‘doom & gloom’ or ‘full steam ahead’ fence, this fact is now in our history books.
Homeowners all across our province have seen a well-deserved rise in their net worth & household equity, providing a sense of comfort and security we’ve all longed craved.
So, that is worth celebrating.
But there is truth to the headlines. Sales this June did see a very small decline from 2021’s numbers, and we did once again see a small decline from May – I think those numbers were -2.4% & -7% respectively.
What essentially happened is that Greater Calgary had an early spring market. The perfect storm brewed with ultra-low inventory & increased confidence in our economy, while still sitting with near record low interest rates. This resulted in earlier than normal high buyer demand.
So, March, April & May were the peak of our busy 2022 sales season. Generally that period is April to June. And then we’d typically start to see the ‘pullback’ in July and through the balance of the year… we are just starting that slowdown a little earlier this year.
And, yes, the recent rise in interest rates from the feds has put on the brakes for some, or adjusted their buying power in the market, but life goes on. The demand/dream to own a home always finds a way, regardless of the daggers thrown at it from our politicians & policy makers.
The ‘pullback’ of June was more focused on the detached & semi-detached markets because they are the more expensive housing markets. So, if people have to tighten their purse strings they will still move, but they will buy a home in a lower price bracket like some of the great row home or condo products.
Both of those market segments saw a 35% increase in sales over June 2021!
Looking at this a little deeper, here is a graph showing home sales by price range – year-to-date – versus the last 3 years.
What you’ll see is the red bar – representing 2022 sales – far, far outreaches the yellow 2021 bar (our prior best year ever) almost everywhere across the board.
So, despite a small pullback in June, it’s a proven fact that Greater Calgarians are okay with spending more money at all parts of our market. And I believe this reality is here to stay.
And one of the reasons for this is our INVENTORY STORY.
Again, despite the headlines talking about an increase in inventory, it’s still absolutely nothing to concern ourselves with. We have the second lowest inventory in the past 15 years as we come out of the month of June.
Comparing to last year, we have 22% less inventory – that’s about 1,500 homes – and nearly half of what we had in June 2018.
But as we see of sales slowing month by month and inventory continuing to climb little by little, the ‘Sales to New Listings Ratio’ is getting a little looser…
Right now we are at 70%, last month was about 72%, the month before about 75%, and at our peak closer to 80%.
“Loose” means fewer homes that hit the market sell right away. So, there is more breathing room for buyers right now. This shows up in the ‘Months of Supply’ state, as well.
Oh, but wait… “You said it’s getting looser, getting easier for buyers, but that red arrow is showing we are still right near the bottom.” 🤔
Yes, that’s exactly right. 🙂
We’ve loosened up a bit from the ultra-tight noose of March through May, but we remain a very healthy and fast-paced market with Months of Supply still sitting under 2 months.
Now, it’s right here that I want to add the fact that our story is really starting to change property type by property type & district by district…
Let’s look on the far left of this graph, for example, at the Detached section. You’ll see that the City Centre has 3.6 Months of Supply but the Southeast has only 1.08.
That’s a 233% difference between districts for a single property type!
And as you look across the whole graph you’ll see this occurs in every product segment.
Then, when you look across the rural counties within the Calgary Real Estate Board Region, the disparities continue…
I share all this because when the market undergoes a shift, such as we’re seeing, it doesn’t happen everywhere in the same way.
More than ever, it’s important to have a Realtor that is very in tune with the dynamics happening in your hyper local situation. So, ask the tough questions and make sure they can give you the answers The strategies are going to be different all across the board.
Okay, let’s get to the PRICING PICTURE.
As the sales pull back and the Sales to New Listings Ratio loosens up, you’d also expect some slight easing on prices… and that’s exactly what’s happened. Prices, as a whole, adjusted a few thousand dollars down from our May peak.
But before you panic, this happens nearly every year. If you got back to 2006-2007, you’ll see a peak month and then a basic flat-lining and a small price adjustment heading into the winter, And then, as the new ‘buying season’ perks up, so do prices.
And as has done nearly every year in our history, the year-over-year price trend improves.
Below is year-over-year chart showing the price increases across all districts & property types – really quite remarkable!
And here are the year-over-year price increases on the Calgary district map…
The range of price growth is from 8% in the core to 19% in the North, Northeast & Southeast.
Then, again across the regions of ‘Greater Calgary’ you’ll see as much as 25% price growth in Canmore & Airdrie and down to a 13% increase in Strathmore.
So, everyone is sharing in the good news Pricing Picture.
Okay… so, you may be thinking “I get it. We’ve had a great year so far. But I’m worried about everything that’s happening with interest rates and how these increased prices will affect me.”
I understand the concern, but let me share a few things to ease your worry.
First, let’s look at Net Migration.
Not only is our growing economy good for us as locals, it’s also attracting more and more people to our province and a great majority of those to our region.
You can see in this graph we are at nearly triple the net migration numbers we were seeing 4-5 years ago.
Looking further back…
You can also see that we are now very much in line with some of Calgary’s “heydays” of 2012-2013 and parts of 2014.
This is really good news for us all & our ability to keep property values steady and increasing despite the interest rate changes.
More people. More demand. More stability.
Secondly – Unemployment.
Looking at this graph you will see that unemployment in our area is way down in comparison to the last 8-9 years, and this continues to improve month by month.
Lower unemployment means more companies profiting and, therefore, more people working & contributing to our economy. This drives stability in our housing sector.
So, yes, we had an amazing & record breaking first half of 2022… but, considering everything I’ve shared, we are very well set up to maintain the gains we’ve achieved in our housing price growth.
So, if you have to make a move, be confident. And if you are out looking to make your very first move – also be confident.
If you aren’t ready for that purchase yet, know that the overall economy is in a good place and the sooner you can get there the sooner you’ll be able to start benefiting.
And that’s all for this month! If you require any market information relating to your specific situation, please don’t hesitate to let us know so a market specialist at Redline can be connected with you!