Calgary Real Estate Market Update - September 2021

 September Sales Approached 2005’s Record High

Sales of residential homes in Calgary came to 2,162 for September, approaching the record high set for the month in 2005. Additional improvements in new listings probably accounted for some of the growth in sales in September.

Ann-Marie Lurie, chief economist at CREB® said, “While sales activity in the fall tends to be slower than in the spring months, the continued strong sales are likely being driven by consumers who were unable to transact earlier in the year when supply levels had not yet adjusted to demand. The market continues to favour the seller, but conditions are not as tight as they were earlier this year.”

September inventory levels softened to 5,607 units, so the months of supply continues at below three months. But there is a significant amount of variation among property types, with the tightest still in the detached market, which has less than two months of supply. In the meantime, the apartment and condo sector doesn’t seem to have the same supply challenges, having almost five months in available supply based on the current level of demand.

Adjusting supply has helped soften the upward pressure on prices, which has been easing little by little compared to several months ago. But they are still way above recorded levels earlier this year. The total benchmark price in September for residential homes in the city was $457,900, which is more than 8% higher than last year’s levels.

UPDATES IN THE HOUSING MARKET

Detached Homes

There were 1,268 sales of detached homes in Calgary in September, significantly more than last year and 30% higher than long-term trends. In fact, sales rose in every price range except for homes listed for less than $400,000. But the sales decline of homes priced in the lower range is probably due to limited supply choice.

When you look at prices year-to-date, they have improved in every district, with gains ranging from 5% in the City Centre to almost 12% in the South-East district. In fact, the City Centre is the one district where prices are still lower than previous highs. The benchmark price in September for detached homes was $537,500, which is slightly down from a record high in July. However, this has not wiped out earlier gains, as this benchmark price is almost 10% higher than in 2020.

Semi-Detached Homes

With fewer choices in lower-priced detached homes, many buyers are now considering a semi-detached home. With 2,005 sales in the semi-detached sector so far this year, sales year-to-date are more than 45% higher than long-term trends, setting new record highs. The increase in sales must have been partly due to the increase in new listings. The ratio of sales-to-new-listings of semi-detached homes has been under 70% on average over the last few months. This is not at all comparable to the tight supply existing in the detached sector, which is averaging 80%.

Although conditions are not as tight in this sector, we are still seeing dramatic price gains this year. The benchmark price for semi-detached homes in September was $424,900, which is a little lower than in August, but more than 8% higher than 2020 levels. Just as with detached homes, the slowest growth in prices of semi-detached homes is being seen in the City Centre. Year-to-date, prices are still lower than previous highs, not only in the City Center but also in the South and North East districts.

Row Houses

There were 318 sales in September, pushing up year-to-date sales of row houses to 3,058 units, 62% higher than long-term trends. If this continues, sales of row houses will hit record levels in 2021. In fact, sales have gone up in every district, with the largest increase in the South-East district.

Although new listings rose in September, it wasn’t enough to avoid more declines in inventory. Therefore, the months of supply continued to be relatively low, at under three months, much lower than normal levels for September. Due to these tight conditions, prices of row houses have continued to rise across all districts throughout 2021. But, unlike detached and semi-detached homes, prices of row houses are still lower than previous highs in all districts.

Condominiums & Apartments

An influx of new listings in September led to an uptick in sales activity. But with a sales-to-new-listings ratio of just 58%, so inventories are still trending up compared to August as well as levels in 2020.

Months of supply in September continued to be under five months, which is a lot lower than 2020 levels and throughout the last five years. Compared with other property sectors, conditions have been more balanced for condominiums and apartments, which is preventing strong gains in prices. Year-to-date, benchmark prices rose by almost 3%, but they are still over 14% lower than previously recorded highs.

REGIONAL MARKET UPDATES

Airdrie

Throughout 2021 this market has been plagued with extremely tight conditions and constraints on supply continued to depress sales in September. There were only 179 new listings and just 166 sales, resulting in a sales-to-new-listings ratio of more than 90% with inventories trending downward.

Since February, the months of supply in Airdrie has stayed below two months, leading to steady gains in prices throughout much of 2021. The benchmark price in September came to $389,700, which was not very different than in August, but more than 13% higher than 2020 levels. Detached homes are driving most of the growth.

Cochrane

For the second consecutive month, sales in Cochrane outpaced new listings, which led to inventories falling to the lowest levels in more than a decade.

While conditions continue to be extremely tight, with only a little more than a month of supply, prices of detached homes have dropped slightly compared to several months ago. This may be due to competition from the new-home market. As of September, prices of detached homes have risen by more than 9% compared to prices in 2020.

Okotoks

Sales activity in Okotoks in September was slower than in 2020. Despite this decline, year-to-date sales were still at record highs. At the same time, inventory levels were extremely low in September with the months of supply continuing to be under two months.

The pace of price increases slowed down in September, but the year-to-date benchmark price for detached homes in Okotoks increased by almost 11% compared to 2020.