Calgary Real Estate Market Update - December 2022

2022 had Record-Breaking Sales Along with a 12% Growth in Prices

Home sales in December softened, but slow sales throughout the last six months of the year were not sufficient to offset the gains made earlier, resulting in a record-breaking 29,672 units sold in 2022.

The last few months of the year saw a pullback in sales along with fewer new listings, leading to a reduction in inventory levels. There were only 2,214 units in inventory in December, which makes this the lowest level for December in more than a decade.

Ann-Marie Lurie, CREB® Chief Economist said, “Housing market conditions have changed significantly throughout the year, as sales activity slowed following steep rate gains throughout the later part of the year. However, Calgary continues to report activity that is better than levels seen before the pandemic and higher than long-term trends for the city. At the same time, we have faced persistently low inventory levels, which have prevented a more significant adjustment in home prices this year.”

December’s benchmark price was $518,800, which is almost 5% below May’s peak price, but nearly 8% higher than in December 2021. Although prices are now trending down, they are still more than 12% higher than 2021 levels.

In the end the housing market performed better than expected in 2022 in terms of sales as well as price growth.

HOUSING MARKET UPDATES

Detached Homes

The detached sector has been impacted the most by rising interest rates as seen by sales softening in the last six months of the year, which contributed to a decline year-to-date of more than 7%. Although there were some increases in new listings during the three months, most of the growth can be attributed to the upper end of the market, helping to balance conditions.

But the supply levels for homes in the lower price ranges compared to overall sales activity continues to cause that segment to favour the seller. For the most part, sales
activity in the detached market has been shifting away from the robust sellers’ market of early 2022.

Over the second half of 2022 prices for detached homes have moved downward, with December’s benchmark price being $619,600, reflecting a softening of a little more than 4% from June’s high. Recent price adjustments failed to all the gains from earlier months, so benchmark prices had an annual gain of more than 14%. Price growth annually ranged from a high of 19% in the North, North East, and South East districts to the City Centre’s low of almost 8%.

Semi-Detached Homes

As sales declined further in December, the year-to-date decline in sales came to nearly 3%. Although sales have softened compared to 2021’s record levels, sales activity still remains a lot stronger than long-term levels and trends before the pandemic. In the meantime, new listings for semi-detached homes have been going down, which means that months of supply and inventory levels are relatively low when you look at historical levels.

Although conditions aren’t as tight as they were in the early months of the year there was some pressure driving prices down. Prices peaked in May but have since softened by nearly 4%. But when you look at annual benchmark prices they are still 12% above 2021 prices. An annual price gain of more than 18% was reported in the North district.

Row Houses

There were significantly fewer new listings of row houses toward the end of the year, weighing down sales. Even so, annual sales climbed to a record-breaking high, reaching 5,153 for the year. 2022 was a record year with sales numbering nearly twice long-term trends. Due to rising interest rates, buyers are choosing more affordable options, including row houses. Although new listings remained higher than in 2021, recent softening combined with fairly strong sales had the effect of lowering inventory levels.

In fact, inventory levels in December were the lowest they’ve been since 2013. The effect is that the market for row houses will continue favouring sellers. Even though prices have softened by a little more than 1% since the peak in June, year-to-date prices are almost 15% above prices in 2021.

Condominiums & Apartments

Unlike other types of housing, sales of condominiums and apartments have risen above 2021 levels throughout 2022. This drove year-to-date sales to go up by 50%, reaching 6,221 units, breaking all records. Demand for affordable housing plus a renewed interest by investors due to the growth in rental rates, supported this growth in sales.

Gains were also made possible by the annual growth in new listings. Just like in other sectors, all these new listings were not sufficient to offset the growth in sales, so inventory levels went down to levels not experienced since 2013.

After years of an oversupply, these tighter conditions contributed to annual price gains of almost 9%. Even though prices went up in every district, city-wide prices are still far below the previous highs of 2014.



REGIONAL MARKET UPDATES

Airdrie

Home sales in Airdrie have been going down since April, mostly due to a huge drop in sales of detached homes, which continued through December. In spite of these declines, total home sales year-to-date increased by 7%, setting a new record of 2,469 units. The growth in population and the fact that homes are relatively affordable in Airdrie when compared to Calgary, contributed to a record number of sales in 2022.

Although the number of new listings were lower in December, there was a basic rise in new listings for the year in this area, which is credited with supporting the recent year-over-year inventory gains over extremely low levels in 2021. The adjustments that have occurred recently in inventory levels and sales have led the months of supply to trend up from the sellers’ market conditions that existed early in the year. Despite that, conditions are still tight with under two months of supply.

The benchmark price in December for Airdrie softened by more than 6% from the peak in April. Even so, it remains 12% higher than in 2021. The annual benchmark price overall in 2022 was $489,558, which was 20% higher than in 2021.

Cochrane

Sales softened in December, leading to a decline year-to-date of 8%. This softening was met with a similar number of new listings as 2021, which help drive some growth in inventory, but levels in Cochrane remain well below the number usually available among resale homes. Although inventory levels are still low, the recent softening of sales has led to more balanced conditions. This took some of the pressure to raise prices off during the last four months of 2022.

The benchmark price of homes in Cochrane for 2022 reached $504,067, which is almost 17% higher than prices in 2021. Price gains ended up being the strongest in the detached and semi-detached homes, with prices rising by 19%, making 2022 a record-breaking year for prices.

Okotoks

December saw a softening of sales in Okotoks, even so the year-over-year easing over the last few months has not been sufficient to offset the gains made earlier, so year-to-date sales rose by nearly 2%.

These sales gains were met with more new listings in Okotoks, which helped support a rise in inventory levels over the lows of 2021. Even with these gains in inventory, conditions are still tight with less than two months of supply, which does limit price adjustments.

Even though prices have been going down since May’s high, growth in the annual benchmark price in Okotoks was almost 16%. Price gains were strongest for detached homes, which rose above $600,000 for the first time ever on an annual basis.