Calgary Real Estate Market Update - September 2022

Demand for More Affordable Homes is Strong

Sales remain strong for condominiums, apartments, and row houses but not strong enough to make up for the declining sales of more expensive property types. The result in September was a softening of sales in Calgary by nearly 12% compared to 2021.
Even so, with a total of 1,901 homes sold, activity is still much stronger than before the pandemic, with numbers far exceeding long-term trends for the month of September. Although there have been recent pullbacks, due to strong sales figures earlier this year, Calgary’s year-to-date numbers are still 15% higher than in 2021.
Ann-Marie Lurie, CREB® Chief Economist, ““While demand is easing, especially for higher priced detached and semi-detached product, purchasers are still active in the affordable segments of the market, cushioning much of the impact on sales. At the same time, we are seeing new listings ease, preventing the market from becoming oversupplied and supporting more balanced conditions.”
There was a decline in new listings in September of 10%. The ratio of sales-to-new-listings of 72% was enough to keep inventory levels from rising, which in fact declined over the previous month, making levels nearly 21% below 2021 levels. These sales and supply level adjustments have kept the months of supply at under three months, which is relatively low.
The move toward more balanced conditions is leading to price adjustments. Although home prices have come down from the highs of May, benchmark prices in September were still 11% higher than in 2021 and 6% above prices at the start of this year.

HOUSING MARKET UPDATES
Detached Homes
Sales of detached homes have now been slowing for six months in a row and have started to offset the gains of the first quarter. These declines have primarily been caused by a reduction in the supply of homes priced under $500,000. There are just too few options for buyers looking for homes in those price ranges.
In the meantime, sales of detached homes priced from $600,000 to $999,999 continue to grow. In fact, detached homes in this price range are experiencing the biggest rise in new listings as well as supply levels.
Even though the overall market for detached homes is a lot more balanced than earlier in the year, conditions are still tight for homes priced under $500,000. This is probably
the cause of divergent trends when it comes to pricing.
Prices of detached homes softened by nearly 1% over the previous month. The biggest monthly decline was in the City Centre. Despite everything, prices overall are still almost 13% higher than in 2021.

Semi-Detached Homes
The continuing pullback in sales of semi-detached homes in September was not sufficient to offset the gains made earlier this year. Sales year-to-date are still 6% higher than in 2021. Even though new listings of semi-detached homes usually vary from one month to the next, new listings year-to-date are still just a little lower than they were in 2021. The result is that inventory levels remain well under long-term trends.
In the meantime, the pullback in sales of semi-detached homes in recent months was enough to raise the months of supply to the levels we had earlier this year. But, with not even three months of supply, relatively tight conditions persist for this type of home.
Although conditions are tight for semi-detached homes, prices are still going down after unexpectedly high gains earlier in the year. Benchmark prices overall are still more than 10% higher than last year’s levels.

Row Houses
Sales of row houses in Calgary are higher than 2021 levels, which has contributed to a record high for the year-to-date pace of sales. Strong sales along with a pullback in new listings that’s been occurring recently have meant that inventory levels are still low and the months of supply continues to be under two months.
With these tight conditions, prices are mostly remaining unchanged from the previous month, which means they are still 15% above prices this time last year. Year-over-year, the highest price gains were in the North district.

Condominiums & Apartments
Sales of condominiums and apartments set a new record for September and keep rising compared to 2021. This has led to total sales of 5,026 so far this year, which is a 60% increase over last year. Although there has been a rise in new listings this year, it hasn’t been sufficient to keep inventory levels from softening.
Compared to other types of housing, inventory levels of apartments and condominiums in Calgary since 2016 have basically been higher. The strong demand for this type of housing this year is what has led to a shift from a buyers’ market, which was the case for most of 2021. So, conditions have now become relatively balanced.
Due to conditions being relatively balanced, prices did not significantly change in September compared to the previous month. Prices for condominiums and apartments overall are still more than 10% higher than in 2021. Even though there have been recent gains, prices are still below the highs of 2014.

REGIONAL MARKET UPDATES
Airdrie
There was a softening of sales and new listings in September, which kept inventory levels pretty much the same as in August. With a ratio of sales-to-new-listings of 89% and less than two months of supply, conditions are still tight in Airdrie.
When inventory levels are this low, buyers are more hesitant than they were several months ago, a reality that’s dampening home prices. The benchmark price in September softened by almost 2% compared to the previous month, but it’s still 16% higher than in 2021.

Cochrane
Home sales in Cochrane softened in September for the sixth month in a row, bringing sales so far this year to just 970 units, a 3% decline from 2021. In the meantime, there has been an increase in new listings compared to how few there were last year, which helped support an increase in inventory levels.
At the end of September, there were only 165 units in inventory. Although this may be higher than we had in 2021, it is still almost 30% below levels typically seen in the month of September.
Shifting supply and demand are leading to more balanced conditions while relieving some of the pressure that’s been plaguing prices. The benchmark price in Cochrane for homes in September was $508,800, representing a softening of almost 2%. Despite this monthly pullback in prices, they still remain more than 16% higher than they were this time in 2021.

Okotoks
Although the number of new listings in Okotoks have risen over last year, supply levels are still challenging. Sales have basically been keeping pace as the ratio of sales-to-new-listings remained high at 81%. In the meantime, inventories are still almost 50% below what is typically seen in September, maintaining the months of supply under two
months.
Although conditions in Okotoks are still tight, buyers are more hesitant than they were earlier in the year, which caused a softening of monthly prices by almost 2%. Despite this downward movement over the previous four months, prices are still more than 12% higher than in 2021.