Calgary Real Estate Market Update - November 2021

Prices Still Being Driven Up by Sellers’ Market Conditions

There continues to be growing demand for all types of property, evidenced by 2,220 sales being closed in November. This is just a little less than the record number for November, which was set in 2005.

According to Ann-Marie Lurie, CREB® Chief Economist, “Lending rates are expected to increase next year, which has created a sense of urgency among purchasers who want to get into the housing market before rates rise.” 

“At the same time, supply levels have struggled to keep pace, causing tight conditions and additional price gains.”

In November there were a total of 1,989 new listings, fewer than the 2,220 sales for the month. With the ratio of sales-to-new-listings being over 100%, inventory levels dipped to 3,922 units, with the months of supply dropping under two months.

It’s quite typical for new listings and inventories to move lower during the fall, with sales usually being slower at this time of year as well. What’s different this time is that sales activity has stayed relatively the same since August.

Perpetual demand and inadequate supply have driven the November benchmark price up to $461,000. This is an increase over October and nearly 9% higher than last year’s levels.

UPDATES IN THE HOUSING MARKET

Detached Homes

November conditions kept tightening in the detached home market, with the ratio of sales-to-new-listings rising to 118% and the months of supply going down to just 1.2 months. W haven’t seen these levels since last spring.

Over half the sales were for homes priced in the $400,000 to $600,000 range, but most sales gains were for properties priced over $600,000. This is partly due to there being more supply to choose from when it comes to the upper end of the residential market. Year-to-date, homes priced over $600,000 now make up almost 31% of all sales, which is a lot higher than the 23% recorded in 2020.

Benchmark prices for detached homes reached a new monthly record of $542,600 in November, which is almost 11% higher than 2020. Year-over-year price gains were seen in every district, but the strongest gains were in the West, exceeding 13%. There is just one district where prices were still under 2014 highs, which is The City Centre.

Semi-Detached Homes

November was another record-breaking month for sales of semi-detached homes in Calgary, resulting in a total of 2,436 units changing ownership. Aside from being a year-to-date record, it’s 13% more than the record set in 2014.   

With fewer options to choose from in the detached sector, a lot of buyers are now considering semi-detached homes. But supply levels in the semi-detached sector are down as well with the months of supply in November dropping below two months.

Most sales this year have been in the $300,000 to $400,000 price range, but higher priced semi-detached homes are starting to move. Homes priced over $700,000 now comprise more than 20% of all sales. This is a major departure from 2020, where this segment made up only 15% of semi-detached home sales.

Largely due to sales gains in all districts, the benchmark price for semi-detached homes rose to $429,800 in November. This is almost 9% higher than in 2020. Year-to-date, prices in all districts have recovered, except for the North East, South and City Centre.

Row Houses

Row houses have not had the same supply struggles this year as have semi-detached homes. This has resulted in the row sector having the largest gains in sales, already surpassing the annual record.

Row properties are more affordable than detached homes for buyers seeking more space than they’d have living in an apartment condominium. Almost 83% of all sales of row houses were among those priced under $400,000.

Although supply levels of row properties have not been as challenging as in the semi-detached or detached sectors, high demand has resulted in falling inventories. This is causing the market to tighten in this segment as well. 

With fewer pressures caused by supply-and-demand issues, prices for row houses are not going up at the same rate as semi-detached and detached homes. Year-to-date, the benchmark price in November was 6% higher than 2020, but it is still lower than 2015 when previous highs were set.

Condominiums & Apartments

This sector again experienced another strong month of growth, adding to a year-to-date sales figure of 3,834 units. Condominium and apartment sales are still way off record highs, but this represents the highest activity level since 2014.

Increased sales resulted in slightly tighter market conditions in this sector, but inventory levels remained high compared to past levels, which makes this segment an anomaly when compared to other property types.

Condominiums and apartments have not had the same supply challenges as other segments are experiencing. So, prices have remained much lower, and recovery has been much slower than in other property types. Year-to-date prices have increased by over 2%, which is a reversal of the persistent annual decline since 2015.

REGIONAL MARKET UPDATES

Airdrie

Sales in November rose to record levels even though inventory is still relatively low. There were 144 sales compared to just 106 new listings, making the ratio of sales-to-new-listings 136%. This led inventory levels to drop to 137 units while the months of supply dipped down to under one month.

It’s been a sellers’ market in Airdrie since mid-2020 and this has significantly impacted prices. Benchmark prices year-to-date have gone up almost 12%, with the detached sector experiencing the strongest gains.

Cochrane

November saw Cochrane having another month of record sales, much like Airdrie. Year-to-date sales came to 1,163 units, double Cochrane’s long-term average!

Much like a lot of other areas, the housing supply in Cochrane is having a hard time keeping up with demand. There was a softening of new listings in November, which pushed the ratio of sales-to-new-listings above 146% while inventories fell to just 77 units. This resulted in the months of supply to dip under one month, which is the lowest it’s ever been for November.

Ongoing tight conditions keep affecting prices. Year-to-date prices have gone up almost 7%, with gains for every type of property.

Okotoks

There were more new listings in November than there were last year, but they still couldn’t keep up with sales. The ratio of sales-to-new-listings stayed above 100% for the second consecutive month, leading to more declines in inventory as well as the months of supply.

Continuing strong demand and softening supply have kept the sellers’ market going, causing prices to keep rising. Driven by strong price increases in Okotoks’ detached sector, overall prices have gone up by almost 9% year-to-date.