Is what’s happened really possible?
There was no stopping the Conservatives and there was no stopping our real estate either! This month we did something not even I thought was possible…
Ok, the election is over – it’s basically status quo – and Albertans are back to business.
But do you remember me asking you last month if the election would re-direct the attention of Albertans away from their real estate? Well, time was going to be the only thing that provided that answer and now we have it.
Not a fricken chance! It was actually the opposite.
May 2023 goes down as the highest-selling May of all time in Calgary.
Yup, even higher than last year, which had shattered all prior records.
This even surprised the heck out of me, who – if you’ve followed our updates – is a major advocate for the power of our market based on all the fundamental data we’ve seen emerge all year long.
Let me add some context to why this shocked even me…
January had 40% fewer sales than January 2022.
February had 47% fewer sales than the previous year.
March had 40% less sales.
April had 20% less sales…
And then, seemingly out of nowhere, May comes in with 2% more!
This continues to show the continued momentum and continuing strength of buyer demand we have in the Greater Calgary area.
On this graph you can see how it’s been in comparison to recent years. This block of 3 big years in a row simply towers over most of the last decade and should give us all massive confidence in our Calgary real estate market.
This is a 100-home per Day pace, vs a 90 sale a day pace in April and an 80 sale a day pace in March.
Now, as always, this is an ‘overall picture’. When we drill down further you see more of the 2023 story appear, which is that the majority of our increased demand and buyer activity is still being driven by our apartment sales.
Apartments sold 36% more than they did last year at the same time and is the real ‘master puppeteer’ of our show.
Detached & Row Homes are selling about 10% less, and Semi’s about 5% more than at this time in 2022.
Okay, with tha Sales Summary behind us let’s check on whether we finally started to see more properties come to the market for us to choose from and to handle all this demand…
This graph shown shows the year-to-date (YTD) ‘new listings’ figures to the end of May. If you look at the bar on the far right, representing YTD 2023, it’s pretty much equal with the 10-year average. So, at first glance this would lead us to believe new listings aren’t a problem. Sure, not as high as the last 2 years, but no ‘slouch’ either.
We started the month with 3,229 homes on the market (that was a drop off of 34% from last year) and ended the month with 3,207. So, 20 fewer homes on the market (now a 39% drop from last year).
This means that we continue to ‘net out’ in the opposite direction of what the market really needs in order to handle all the buyer demand.
Last year from April to May, despite the crazy we had, we still saw 400 more available homes accumulate on the market. This year it’s ‘zilch.’ ‘Zero.’ ‘Nada.’
This graph really shows the inventory trend better than any words can…
Zooming in a little further into the property types…
Detached homes month-over-month saw zero net gain in inventory, Semi-Detached saw nearly a 20% drop, Row Homes were flat, and Apartments also flat. It’s in every housing segment that we are seeing this occur, not just what seems to be our hottest part of the market – our Apartments.
So, we’ve talked Sales and we’ve talked Inventory… now let’s talk about Pricing. Everyone wants to know “Is my home price going up or is it going down?” so they can either be aware of how one of their life’s biggest assets is doing, or they can make an educated decision about entering the market
Looking at this graph, point your eyes to the red line – that is our Benchmark Price.
What you are seeing is that pricing continues to trend up and up and up.
This graph really gives you an idea of just how long we’ve been trending up now, and where we have come from.
Okay, let’s zoom into this year’s price graph now…
You’ll notice very quickly that on this month-over-month graph the red line is almost linear – which simply means that it is steadily increasing without much of an adjustment or even a slowing trend.
As of the end of this May we once again hit an all-time high in our city’s housing price points! Detached homes are now at $674k, Semi’s at $600k, Row Homes just under $400k at $390, and Apartments just shy of $300k. All new highs in all property types. 😮
And it’s’ also all new highs in all districts, as well! Check this out…
But really… how can this be? And isn’t the ‘other shoe’ going to drop (because that’s what you were told would happen, right?)
Well it’s not going to happen, and basically can’t happen. Aside from a war breaking out, or a ‘Great Depression’ level crash of sort… because this current momentum and sales value climb is not something that was built overnight. It’s not a fad or trend or a knee-jerk feel-good moment for sellers. This result has been built over a decade, nested in true economic fundamentals as I’ve been talking about all these years.
Check this graph out…
This is the ‘Months of Supply’ graph which shares 1 single stat about that combines the total inventory of homes on the market & our current buyer demand…
The lower the graph is, the faster the market.
The lower the graph, the more demand is outweighing supply.
This graph gives us a powerful indicator of where we sit, and when we look at it – not on a monthly basis, but how we continue to perform over the course of several years – you really see that it has taken us a long time to get to this point.
So, any commentary that we might ‘adjust out’ of this market soon or that this run is close to over, would simply be ‘headline rhetoric’ looking to catch eyeballs.
Right now, if we didn’t put another home on the market in June, we’d have zero homes left to buy by the end of the month! That sort of supply & demand equation does one thing – pushes pricing up & up & up.
This situation is rooted in fundamentals, not emotion or hype. It’s simply real people, real profits, real money, home by home, coming here to put down roots or invest for the future.
This is exactly what we want, and can be confident about, to plan our own future around, especially in terms of our housing.
Often, when we talk ‘Months of Supply’ we also bring up ‘Days on Market’.
You might be thinking “You’ve convinced me I can sell for what I want, or maybe even more. But how fast can we get this done?”
Well, this is the last 4 months of sales, over top of the ‘days on market’ stat…
Homes in the Calgary area are now, on average, selling in 24 days (that is from list date to firm condition-free deal). That sort of timeline is amazing for those needing to make a home sale transition. That is as worry-free as it gets.
So, to wrap this up, let me leave you with this…
If you were considering a purchase or a move last year at this exact same time of the year it was frustrating. Buyers were stuck in multiple offers, people paid a bit more than they wanted in order to get their homes, but people also gave up and sat on the sidelines awaiting a correction or a crash…
But… that didn’t happen, did it? Honestly, that doesn’t really happen ever when you look over more than a 2-3 year timeline (it is near impossible to find that in our history).
Look at this sliver from the Detached homes chart. Last year, when you were fed up and giving up, when it was too expensive and it was the market nobody thought we could beat…
The price then was $647k. Now it’s $674k.
Then Apartments – was $269k and now it’s $299k!
Then we had Row Homes – was $359k, now $390k.
And finally, Semi-detached was $581k in May 2022 and is now $600k.
No matter how you shake it, making your move is better – despite the intensity – than simply trying to wait.
We don’t know exactly what’s coming, but we do know real estate is a long game that, in the end, always wins. The pain to get in, I believe, is always easier than the pain of losing out on the future upside (as we just showed).
And guess what? Historically, the gain we just had as a city is under the 40-year average. Yes, a year-over-year city-wide gain of 2.6% is way below norm.
So, I am speaking from my industry experience, I’m shouting out to you with the actual market data, and I’m also putting my money where my mouth is and I’m buying and continuing to buy in this market and don’t plan to stop. My motto is ‘Get more assets in the market and let time do its thing’.
If you are in need of some help for your specific situation just drop us a comment, or email at email@example.com so we can hook you up with a specialist from our group of over 90 agents in the region!