Calgary Real Estate Market Update - August 2021

Housing Market Becoming More Balanced after Tumultuous Start of the Year

Home sales across Calgary came to 2,151 units in August, which is 37% more than in 2020 and 25% more than long-term trends. But sales are slowing down year-to-date from the record-breaking pace experienced earlier in the year. This has resulted in a total of 19,516 sales so far this year, which is more than recorded annual sales of the past six years.

According to Ann-Marie Lurie, CREB^® Chief Economist, “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.”

“With more buyers than sellers, prices rose, providing opportunity for many 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.”

In August the months of supply came to nearly three months. This is better than earlier months in the year, but things are still much tighter than typical levels in August. The silver lining is that with supply improving somewhat compared to sales, prices growth is showing signs of slowing.

The residential benchmark price in August was $459,600, which is a bit lower than the previous month, but more than 9% higher than last year’s levels. The price gains depend on the type of home, with the most gains occurring with detached homes.

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UPDATES IN THE HOUSING MARKET

Detached Homes

Sales of detached homes in August increased in every district, totalling 1,300 units, a 13% increase over last year and far higher than long-term averages. There was also an increase in new listings compared to last year, but it was not sufficient for any major change in inventory levels, which dropped to 2,770 units in August. So, the months of supply in August stayed a little over two months, which is far less than normal for August, but not as tight as earlier in the year.

After a number of months of steady price gains, prices in August stayed relatively stable compared to July but were over 10% more than last year’s recorded levels. Significant variations in price gains continue to depend on location. Although prices have gone up across all districts compared to 2020, prices came down in August in the North West, South, West and City Centre districts compared to July.

Semi-Detached Homes

There were more year-over-year gains in sales in August, which allowed for a record-breaking year-to-date total of 1,797 units sold, which is over 70% higher than 2020. Sales have increased across all districts in Calgary, but the biggest gains were experienced in the City Centre, West and North West.

In addition to a trending down of inventory levels in the past few months, sales have slowed down as well. The months of supply in August rose to more than three months for the first time since October 2020. A move toward becoming more balanced would help soften the upward trend on prices.

The benchmark price on semi-detached homes in August was $430,000, which is nearly 10% higher than 2020, but only a bit higher than July. Even though there were strong gains in prices across all districts, prices have still not bounced back from previous highs in the City Centre, South and North East districts.

Row Houses

Although there has been a slowing down in this sector’s pace of growth, sales of row houses still kept up their momentum in August. This was sufficient to propel year-to-date sales to a record-breaking high. There was also an increase in new listings, which kept inventory levels from dropping even further, with the months of supply still dropping a little lower than three months in August.

These tight supply conditions have been encouraging price gains most of the year, but these gains are starting to slow down. The benchmark price for row houses in August rose above $300,000, which is 8% more than 2020. Row house prices have increased, but they are still below previous highs across all districts in the city.

Condominiums & Apartments

Sales in August were higher than sales figures over the previous six years while inventory levels stayed high compared to 2020 as well as longer-term trends thanks to a constant stream of new listings. The months of supply in August stayed above five months.

Although conditions in the condominium and apartment sector are much better than in 2020, this sector is not experiencing sellers’ market conditions that exist in other types of properties, slowing price growth. The benchmark price in this sector in August was just over 2% higher than 2020, but it is still almost 16% below previous highs.

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REGIONAL MARKET UPDATES

Airdrie

Activity in Calgary showed very little indication of slowing down since sales nearly kept pace with new listings, which resulted in a sales-to-new-listing ratio of 88% and just over one month of supply.

Because conditions continue to be so tight, further price gains were seen in August. The benchmark price rose to $389,500 in August, almost 1% higher than in July and nearly 14% higher than in 2020. Most of these gains are being driven by activity in the detached sector.

Cochrane

Cochrane continues to suffer from limited supply, suppressing the market. There were 88 new listings in August, matched by 90 home sales, which keeps inventory levels quite low at just 154 units.

It continues to be a sellers’ market. With less than two months of supply making conditions exceptionally tight, prices have been impacted. The benchmark price in August came to $452,400, which is 12% higher than 2020 levels.

Okotoks

Fewer new listings in August likely dampened sales, since there were just 56 new listings and only 65 sales, dropping inventory levels to 85 units and dropping the months of supply to just 1.3 months. This is the lowest recorded level for August.

The continuing sellers’ market propelled further price gains in August. The benchmark price rose to $490,500 in August, which is almost 1% more than in July and more than 11% more than prices in 2020. Detached homes continue to drive prices up with year-over-gains reaching nearly 13%.