The Calgary Real Estate Board (CREB) released their annual forecast today.
Let’s keep in mind that no one could have predicted the wild ride we were taken on in 2020. These predictions are based on the best information they have at the moment but a massive amount of uncertainty persists related to the pandemic, the economy and our jobs market in Alberta.
Included in our forecast package are predictions from some other entities:
- Alberta GDP growth of 4.5% from RBC (after a dismal 8.3% drop in 2020)
- Calgary employment growth of 5.4% from the Conference Board of Canada (after a sad 6.4% drop in 2020)
- Calgary net migration of 11,360 from the Conference Board of Canada (after a low 6,053 in 2020)
The numbers for 2021 look somewhat rosy but they are comparing to terrible numbers from 2020. So I wouldn’t say that our economy will be exactly booming this year.
CREB has predicted:
- 4.8% increase in the number of sales. This figure also represents a 3.6% increase from 2019’s sales numbers and a 5% increase from 2018. So it’s not just simply a rebound from one terrible year.
- 1.3% increase in the benchmark price for all residential property types. This follows price drops of 1.7%, 3.4% and 0.7% in 2018, 2019 and 2020 respectively. It could be our first year of increases in a while!
As always, these numbers will fluctuate in big ways depending on price range and property type, not to mention seasonal variations that may follow more of a normal trend in 2021, compared to 2020 when the spring lockdown impacted our traditionally busy spring selling season.
Although prices did fall overall in 2020, the year ended on a strong note with several sectors in “seller’s market” conditions. This is especially true in lower price ranges, such as under $600,000 for detached homes and under $250,000 for condos.
These conditions could continue unless we start to see many more sellers decide to list their homes. With news of price stability getting out there, some sellers that have been waiting for the right time may choose this spring.
Some sellers have concerns about people viewing their home while Covid numbers are high and I think this contributed to having such a low number of new listings in November and December. It’s uncertain how quickly this will change as vaccinations roll out.
Less new construction starts should help keep inventory levels lower which should support stable or even increasing prices.
Mortgage interest rates are expected to say very low for the foreseeable future, though there could be some small increases and it doesn’t hurt to lock in with a mortgage pre-approval now to make sure you get the lowest rate!
Rental rates are expected to dip slightly this year as vacancy rates stay high. This isn’t great news for landlords with rental properties but is positive for renters and may even keep some renters in the rental market longer, rather than deciding to buy.
I do anticipate a busier spring season this year and am already seeing the effects of low amounts of supply in the market – I’ve been in competing offers a couple of times recently and I think the stats will come in quite strong for January.
The past two weeks have seen 27 detached house sales per day, compared to 18 sales per day for the same period in 2020. And remember, that was pre-pandemic. The apartment market is still much softer, seeing the same number of sales per day in 2020 and 2021.
This may be the year of ‘do what makes you happy’ when it comes to real estate – i.e. If you want to move, move. If you want to buy, buy. If you want more space, get more space. If you want to simplify, sell your rental property. There shouldn’t be any massive increases or decreases in price point so just make decisions that are best for you and your lifestyle.
I’m always here as a resource if you want to bounce ideas around!
-Amie
