Calgary Real Estate Market Update - March 2023

MARCH HOUSING MARKET UPDATE
Prices increase as conditions suit the seller

Sales and new listings are now higher than they were at the start of the year. As a consequence, some anticipated monthly inventory level gains were supported by the difference between sales and new listings. The months of supply were just above one month, solidly in the seller’s domain, and the 3,233 available units represented the lowest March inventory levels since 2006. Although the market is not as constricted as it was in March of last year, buyers still have few options, which pushes up the price of homes.

Unadjusted residential house prices as a whole rose to $541,800 in March, up 2% from the previous month and almost 1% from figures from the previous year. The pace of price increase over the first quarter has been faster than anticipated because of the persistent seller’s market conditions, even though prices are still below the $546,000 high from May 2022.

“As expected, sales have eased from record levels while remaining stronger than they were before the pandemic thanks to recent gains in migration supporting demand,” said CREB® Chief Economist Ann-Marie Lurie.

“The challenge has been centered around supply. As a result, existing homeowners may be reluctant to list as they struggle to find an acceptable housing alternative in this market. At the same time, higher lending rates can also reduce the incentives for existing homeowners to list their home.”

With 2,432 sales and 3,318 new listings in March, the sales-to-new listings percentage was a comparatively high 73%. However, compared to levels recorded in March of last year, both sales and new listings have decreased by 40%.

Detached
The sharp decline in detached sales has been caused by fewer listings and increased interest rates. This is the only property category where activity for the month fell short of long-term trends, with 1,145 sales. Nevertheless, despite the decline in purchases, inventory levels are still close to the lowest March levels seen in 2006.

The ongoing tight market circumstances have fueled further price increases. The benchmark price for a detached home rose to a new all-time peak of $649,800 in March. Due to changes in supply levels, conditions are much tighter at the bottom end of the market. Compared to the 48% recorded last year, nearly 63% of the new listings that have hit the market so far this year have asking prices over $600,000.

Semi Detached
Similar to other property types, sales and new listings saw a substantial decline from last year’s levels, leaving the market incredibly tight in March with a sales-to-new listings ratio of 78%. A lot of buyers are also looking for semi-detached properties due to increased lending rates. For properties under $600,000, however, things stayed incredibly tight.

This month, prices continued to rise as a result of low inventory levels in comparison to market sales. The unadjusted average price consequently increased by over 2% over the previous month and by almost 2% over the same period last year, reaching $581,300 in March. Although prices have increased significantly over the past few months, they are still below the $584,700 monthly record set in May 2022.

Row
Row sales, new listings, and inventory levels have all increased since the beginning of the year, but they are still significantly fewer than they were in 2017. Conditions are still in the seller’s advantage with one month’s worth of supply available. Additionally, the tight market circumstances increased price pressure.

The benchmark price increased to $378,100 in March, an increase of nearly 8% from the previous year and a new monthly peak. The North East and South districts of the city experienced the fastest price increase, while the West district experienced the slowest year-over-year gains.

Apartment Condominium
Sales of apartments and condos in March totaled 682, an 11% decrease from the record-breaking month of 2017. Additionally, the number of new listings decreased by 8% from the previous year, maintaining inventory at 1,000 units, which is still considered low. The months of supply remained well below two months due to the low inventory levels in comparison to sales, ensuring that the market continued to benefit the seller.

The benchmark price in Calgary increased by roughly 11% year over year to $293,500. This market is getting closer to complete price recovery as a result of the recent price increase. For instance, the monthly peak for flat condominium prices was $306,600 back in November 2014.

Regional Market Facts

Airdrie
The sales-to-new listings ratio increased to 76 percent in March with 154 sales and 203 new listings, and inventory levels dropped to their lowest levels for the month since 2014. The months of supply have decreased to the lowest level in over eight months, despite the fact that circumstances are not as tight as they were last year. Since January 2021, Airdrie’s months of supply have not exceeded two months, and the ongoing scarcity this year has led prices to trend higher in comparison to levels seen at the end of 2022.

The average price increased by 2% from the previous month to $497,400 in March. Despite recent improvements, levels are still below the monthly peak of $510,700 observed in April 2022 and are almost 2% lower than they were a year ago. Even though prices are still below where they were at their peak last year, it’s essential to remember how much they’ve increased in this market overall over the past few years. The benchmark price has increased by more than 20% since March 2021, when the levels were last published.

Cochrane
Even though sales and new listings are both higher than they were a few months ago, they are still significantly lower than the peak levels recorded a year ago. Additionally, inventory levels are higher than the low levels recorded the year prior, in contrast to other areas. The months of supply, however, have once again dropped below two months with only 155 units available in March and 87 sales.

Residential benchmark prices increased over the previous month for the second consecutive month, hitting $501,900. Despite the monthly increase, prices are still marginally below both the monthly high of $522,600 in June 2022 and the levels from the previous year. Prices in the region, like Airdrie, have increased considerably over the past few years and are now over 20% higher than levels noted in March 2021.

Okotoks
Sales and new listings are now higher than they were early in the year. However, conditions stayed extremely tight with 55 sales and 67 new listings, and with 61 units available in March, levels were among the lowest ever noted for the month. Prior to the March 2020 pandemic, Okotoks usually had more than 200 units in stock.

There is still a one-month supply, which favours the vendor and pushes prices higher. After three straight months of price increases, the benchmark price surpassed $561,600 in March, setting a new peak for the neighbourhood.