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Mid-Year Crunching

Still hoping for a balanced market

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Halfway through 2024, Calgary’s residential real estate hopes and strategizes for a balanced market, while continuing very much a seller’s market.

According to the Calgary Real Estate Board’s (CREB) annual forecast, there was much flux in 2023 but the stats, numbers and trending of home sales, new listings, inventory sales to listing ratios were slumped last year, although there was slight spike in the Calgary benchmark price – to $556,975.

“Some of the challenges that we saw throughout 2023 are related directly to the rising cost of living, rising interest rates and the lack of inventory of homes,” says Christian Twomey with RE/MAX Landan Real Estate and CREB chair.

In the Calgary market, like most major Canadian markets, Canada’s current mortgage rates are definitely a factor. The Bank of Canada interest rates have been sitting at five per cent since last July. The high rates have kept many new homebuyers out of the market or reconsidering their short and long-term plans.

While the rates are expected to drop slightly this year, when and by how much is still unknown. And Calgary’s real estate projections over the next 10 years will continue to be influenced by the lending rate. If it is too high, many would-be homebuyers will be pushed out of the market. If the rates drop, the industry will see an increase in buyers and housing prices.

Christian Twomey emphasizes that, despite real estate factors like benchmark prices, the economy, mortgage rates, consumer confidence, Calgary’s #1 residential real estate challenge continues to be inventory, the discrepancy between listings and sales.

“The interplay between supply and demand is a fundamental driver of home prices in the Calgary real estate market. Presently, the Calgary housing market is characterized by robust demand, coupled with a shortage of supply in certain segments,” he says. “This imbalance creates heightened competition among buyers, exerting upward pressure on housing prices.”

According to Jared Chamberlain, respected Calgary REALTOR® and team lead at Chamberlain Group, “In the first half of the year, Calgary’s real estate market has been primarily driven by the fundamental principle of supply and demand. Each property type has nearly one month or less of inventory, highlighting the ongoing shortage of supply amid strong demand.

“This situation is further compounded by Alberta’s population growth, which has been the highest year-over-year in Canada for Q1 of 2024, suggesting a steady influx of people moving to Alberta, intensifying the demand. Additionally, property prices have escalated significantly by the end of Q1, with townhomes witnessing over 20 per cent growth, and apartments recording growth of more than 17 per cent, both from the previous year.”

He emphasizes that the current trends indicate a market where demand outstrips supply, pushing property prices upward.

The Calgary residential real estate focus continues to focus on the currently lopsided key factor of supply/demand. YYC supply/demand is still lopsided. What – and how long – will it take for Calgary to return to a balanced market?

Chamberlain crunches the Calgary Q1 and Q2 numbers and points out that, despite the hope for a stabilizing market, Calgary prices continue to soar. “This steady climb can only be disrupted if more inventory enters the market but remains unsold. But given our current levels of demand and population growth, this scenario seems unlikely in the near future. As for the listings-to-sales ratios, they are not improving from a buyer’s perspective.”

He notes the number of months of inventory is dwindling to around, or even less than, one month, which indicates an intensifying seller’s market, where demand exceeds supply leading to upward pressure on real estate prices.

“Navigating the balance of supply and demand in the real estate market is an endeavor that is influenced by various factors,” Twomey says. 

“Historically, we have observed this equilibrium evolving gradually, with fluctuations favoring either buyers or sellers at different intervals. But predicting the precise timeline for Calgary’s return to a balanced market is inherently challenging due to the dynamic nature of these market forces.”

He adds that it is crucial for housing consumers to adopt a long-term perspective when evaluating market conditions and making purchasing decisions. “While we can’t provide a definitive timeline for market balance, we emphasize the importance of staying informed and adaptable in response to evolving market dynamics.”

According to residential real estate forecasts, with housing prices expected to continue to climb over the next few years, homebuyers and sellers can also expect the Calgary housing market forecast for 2025 to be similar to the current year’s growth projections.

The average price for a Calgary home is expected to increase to $810,000 by 2025. Calgary’s real estate predictions for the next 10 years are also looking optimistic.

“It’s essential to recognize that while home prices are elevated in the current market environment, Calgary remains notably more affordable compared to other major Canadian cities such as Toronto and Vancouver,” Twomey says with Calgary enthusiasm.

“Despite the upward trajectory in prices, this relative affordability underscores Calgary’s appeal as a viable option for prospective homebuyers.”

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