Many headlines are predicting a K-shaped recovery for our economy, where different parts of the economy or society recover at different rates or magnitudes.
Calgary’s real estate market is also seeing a recovery of sorts, though the gap between sectors is large.
Detached home prices in Calgary saw their peak prices back in fall of 2014 with a benchmark price of about $523,000. The benchmark price now is about $489,000, representing a 7% drop.
So, in theory, if you ever bought a house in Calgary, the most that you should be losing is 7% of your value. If you bought in 2013 or earlier, you should be making some money on your house, but if you bought anytime from 2014 to 2020, your house should be between the same and 7% lower.
However, as many sellers currently on the market know, this isn’t the case for everyone. I have shown homes as recently as last week in the $1M+ range that are listed for nearly 20% below their last sale price.
In fact, if you isolate detached homes under $600,000 in Calgary, there are 1686 active listings and there have been 822 sales in the past month, meaning there is just two months worth of inventory – this is definitely a seller’s market!
However, if you isolate detached homes over $1M, there are 409 active listings and just 55 sales in the past month, meaning there is over seven months of inventory – definitely a buyer’s market!
In the apartment sector, prices peaked in late 2014 around $301,000 and are now sitting at about $248,000, a drop of nearly 18%! Remember that detached homes are only down 7% from peak pricing.
Again, isolating for price ranges, the apartment sector under $300,000 has 5.5 months of inventory, slightly into buyer’s market territory. Apartments over $400,000 have over 13 months of inventory.
Interestingly, the K-shaped economic recovery is usually in the “rich get richer, poor get poorer” category, but Calgary property owners are being affected in the opposite way – those with more expensive homes that need to sell are losing the most while those with more moderate price ranges are preserving their value.
With interest rates dropping to unbelievable lows, buyers are getting off the sidelines and deciding to make a move. The number of apartment sales has increased 250% since the dismal lows in April. Detached homes sales have also skyrocketed since April, with a 310% increase.
The number of sales is still very low compared to busy years like 2013 and 2014 but is returning to a more normal pace.
As always, if you would like a full statistics package for Calgary or for your specific neighbourhood, please drop me a note and I will happily provide!