When looking at market statistics, we will often look at Year-Over-Year numbers. However, when comparing to 2020 – a year that began a global pandemic and economic shutdown, it’s not a very valuable tool.
What is interesting to look at is how the market has played out so far in 2021 – a time that, although there continued to be restrictions in place, felt like there was a light at the end of the tunnel and both businesses and people were making plans for the future.
The detached house market showed incredible resiliency throughout the pandemic and in 2021, was truly the real estate market’s star. Benchmark prices rose by over 9% from January to June. So many people realized that they wanted a yard, a home gym, a home office, a garden, etc. that there was incredibly strong demand for this property type.
People have been using the dollars they saved on vacations and dinners out and have been putting it toward downpayments and renovations.
However, now that most restrictions have been lifted, we are seeing a new story in July. The month of June saw 60 detached home sales per day. So far in July, there have been just 40 sales per day, a drop of 33%. I believe this can be attributed in large part to a shift in focus toward summer holidays and Stampede. But perhaps the number of people looking to get into a house has dropped simply because so many already purchased during the frenzied spring months and there aren’t as many left!
The apartment sector has a different feel this year. While prices have increased slightly, up 3% from January to June, the average apartment that sells is taking 55 days to sell, compared to 27 days for detached homes. There is less than two months of inventory for detached homes but the apartment sector has nearly five months, which makes it a much slower sector.
We have seen a huge increase in the amount of apartment inventory on the market this year, rising from 1,314 listings in January to 1,964 in June. Combined with a decreasing number of sales (14 per day in June and just 10 per day so far in July), we are set up to see apartment prices dropping.
To round out the recap, the semi-detached (duplex) market has seen a price increase of 9% and is sitting at 2.4 months of inventory, so this is still looking like quite a strong market sector.
Row houses (townhomes) have outperformed the apartment sector, with a 7% increase in price and under 3 months of inventory. Although apartments and row houses both have monthly condo fees and are the two lowest price sectors in the market, row houses typically offer more square footage and better outdoor space than apartments – two things that have been highly desirable during lockdowns.
As the economy comes back to life, what we really need to see for steady growth in the Alberta real estate market is jobs and immigration. We rely on workers moving to Alberta and buying their first place – this would especially help the struggling apartment market.
Now, get out there and enjoy the summer while it lasts! And don’t forget to enter our summer giveaway!