When people find out you’re in real estate, you’re often greeted by comments like “I hear the market is hot” or “I hear the market is soft”. Some of these perceptions of the market are based on articles posted on national media outlets about the national real estate market.
In a country as diverse and vast as ours, these articles are basically useless. An example is this article that was written in January while Calgary was experiencing extremely tight market conditions and prices were rising sharply. It says, in part, that “Governor Tiff Macklem’s rapid interest rate hikes… have dramatically cooled the real estate market.”
It’s a simple numbers game. The Toronto and Vancouver markets are WAY larger than any other markets in Canada so they will naturally sway any kind of average, median or benchmark pricing. Basically what’s happening “nationally” is what’s happening in those two greater municipal areas.
So if you live in Halifax or Saskatoon or Calgary, these stats tell you very little about your own market. To be honest, we don’t even like talking about ‘total residential’ stats in our city because we have so often had quite different market conditions for single family houses vs. apartment condos. So what good does it do anyone if single family house prices are strong but they own a condo?
Other than the obvious difference in actual pricing between Calgary and those two big cities in Canada (i.e. Vancouver benchmark price $2.5M, Toronto benchmark price $1.7M, Calgary benchmark price $685K), there are also different factors affecting the market, different reasons that people buy or sell and different market conditions.
Let’s look at an example.
The national benchmark home price peaked in February 2022 at $836,600. It then dropped for 13 straight months, hitting a low of $706,400 in March 2023, a drop of about 16%!
In Calgary, the benchmark home price in February 2022 was $520,300. It then rose for three months, dipped toward the end of 2022 and has climbed every month since December. The difference between Feb 2022 and March 2023 was an increase of 3.6%, not a drop of 16%… quite a difference.
If you hone in on apartment condos in Calgary specifically, they actually increased 15% in the same time period! Condos started gaining momentum later than the detached market, in large part due to recent interest rate rises pushing buyers into lower priced properties, so their prices were still quite low in early 2022 (making the gain since then even larger).
Another thing that real estate headlines, whether national or local, don’t tell you is how many offers properties are receiving. You can find in stats packages how many ‘Days on Market’ a house takes to sell, but even that has some nuance to it. If a house had 14 days on market, they may have received an offer on day one and then had two weeks for the buyers to waive their inspection and financing conditions.
The only way to have a sense of the true market conditions is to have your boots on the ground. As realtors working with both buyers and sellers, we have been on both sides of the offer coin many times in this current market. We know what offers typically look like and what motivates sellers to take one offer over another.
When buyers today say they want to ‘wait out the market’, they may be influenced by some of these national headlines that don’t ring true in our city. In a market that has properties selling in an average 23 days on market with less than 1.5 months of supply, you have to ask yourself how long you are willing to wait?
We agree that the market has to balance out at some point. But at the time of writing this article, we still find ourselves competing in multiple offers and advising clients to bid over asking price in many circumstances. We have never seen ‘seller’s market’ conditions like this for such a prolonged period in Calgary’s history.
Unless we have a large number of new listings come on the market (which definitely does not look imminent) or have people stop moving to Calgary (also not imminent), the supply/demand ratio doesn’t look like it’s going to change in a big way anytime soon.
After all, if you live here, can you blame anyone for moving here? : ) As per this recent article, StatCan noted Calgary’s growth in full-time employment over the past year led the nation at 6.5 per cent, and was ranked third in overall employment growth at 3.6 per cent.
Perhaps the overall Canadian real estate picture is valuable for certain types of macro economic analysis, but anyone who is thinking about buying or selling needs to concern themselves with the specific market conditions in their area.
So don’t get sucked into national real estate headlines and call a local realtor today!
-Amie & Parker
