Spring has arrived early in Calgary! After six long years of declining real estate prices, we are finally seeing a strong market, complete with low inventory, competing offers and increasing prices.
Our friends in Vancouver and Toronto have been experiencing boom markets for years already while Alberta sat sadly in the shadows, enduring year after year of homeowners feeling stuck because their house is worth less than they paid for it.
On the flip side, buyers have had six years of being in the driver’s seat – taking their time to view many properties, going back for second looks at their favourites, writing low offers and getting good deals.
This has all changed in 2021. After a strangely busy November and December (considering what stage the pandemic was at), the market started 2021 with very low levels of inventory.
Mix jaw-droppingly low interest rates with changing needs in society (i.e. people wanting more space due to the pandemic) and you’ve got a strong level of demand. I think we all remember from junior high school that when supply is low and demand is high, prices go up. And that is exactly what we are seeing now.
Market conditions have tightened throughout all market segments, however this is especially true for single-family homes. Many working professionals have decided to trade condo living for a house with an office and a yard and this is driving the hot detached house market, specifically in lower price ranges (under $600,000).
Condos have seen a levelling out in prices and are just slightly in buyer’s market territory with 4.4 months of inventory, whereas single-family homes have just 1.3 months of inventory, an extreme seller’s market.
Detached house prices are up a whopping 8% year-over-year. Again, while other markets in Canada have seen numbers like this or higher for some time, it hasn’t been since 2014 that prices have taken any kind of jump here in Calgary.
Semi-detached (duplex) home prices are up 6% year-over-year and apartment prices are up 3%.
All of this is leading to both buyers and sellers needing to revise their strategies to operate successfully in this market.
For Sellers, this may mean vacating their home for the first couple of days of listing to allow many buyers through. It may mean setting a time to review competing offers after a sufficient number of showings. It also affects pricing. For some sellers, they may want to price on the low end of their range and aim for competing offers and a quick sale. Or it may mean pricing higher than the last comparable sale and hoping a buyer will still bite.
For Buyers, this means definitely having your ducks in a row in regards to your financing and deposit. Although most buyers are still putting financing conditions in when in competing offers, some are tightening their time frame to just a few business days, rather than two weeks as it has often been in the past. You may want to pre-book a home inspection so you have your time slot ready since good inspectors are very busy. You also want to do your homework, know what you are looking for and simply be mentally and emotionally ready to make a quick decision! It’s still a big decision to make but if you have educated yourself (with the help of your realtor, of course!) on what is a good fit and good value for you, you can move forward with confidence.
Prices and market conditions are changing quickly right now so it’s important to work with a realtor that has their finger on the pulse and is monitoring market data daily. At the end of the day, Calgary is still an extremely affordable city to buy a house in, compared with other cities in Canada. With interest rates as low as they are, it’s a great time to get into an increasing market.
Not all price ranges are exhibiting the same increases right now. For data specific to your community or property type, drop me a line!