You don't need me to tell you that 2020 was a whirlwind of a year. Spring shutdowns and uncertainty had negative impacts on the housing market. Sellers were pulling their properties off the market, buyers put their home searches on hold but there was no sleep for real estate! The industry was deemed an essential service and we had to continue to truck through.
There was some silver lining for the housing market in the second half of the year. Attractive interest rates, growing demand, reduced number of properties on the market contributed to some recovery seen in the latter part of the year. We are entering 2021 in far more balanced market conditions that we have seen in more than 5 years. That being said, annual sales activity was still lower than in previous years. The balancing out of supply and demand did not offset the pullbacks in spring.
DETACHED HOMES
This sector has been making slow movements towards more balanced market conditions for sellers. December saw an absorption rate of 45.96% (sold listings divided by inventory) which is an increase from November (39.43%). Despite the modest gain, sales activity remains lower than in previous years since the stress test introduced in 2018 has made it more difficult for buyers to obtain financing. This, coupled with sellers pulling their listings off the market in the spring contributed to some price recovery. The supply adjustments in detached homes are causing sellers' market conditions across the city, with the exception of the West and City Centre districts. There are also noteworthy gains for 2020 in South and South East districts.
SEMI-DETACHED HOMES
This type of home has been performing differently across different districts in Calgary. We saw sales growth in North East, North, West, South, East while other districts like City Centre, North West, South, and East lagged behind in sales. Although sales activity did not improve across the city, there was a reduction in active listings; the reduced inventory levels have helped move the absorption rate from 33.63% in November, to 39.51% as of December 31, 2020. The lower levels of inventory are starting to impact benchmark pricing but not significant enough to offset the earlier setbacks. This movement towards a balanced market may offer some consolation for homeowners that are thinking of listing their semi-detached home in the near future.
ROW AND TOWNS
Row homes and/or townhomes are another property type that saw some price stabilization. Sales in the West district but was not significant enough to offset the increased sales in the rest of the city. Things are moving! Lower levels of inventory and increased sales in the second half of the year were enough to increase the December absorption rate to 27.66%, a 4.42% increase from the previous month. The price adjustments have been taking place to different degrees across the city. The North East district saw the steepest price declines so it is a good time to find your first or move-up home in this area. On the other side of the city, the West district saw the strongest gain of 2%. If you are considering listing your townhome in this area it is time to take advantage of the stabilization.
APARTMENTS
The "Most Improved Player" award for December goes to apartments! Sales for this month were the best since 2014. This sector ended the year on a good note, but it was not enough to offset the continued oversupply in recent years. Unlike the other property types, apartment condominiums did not see much stabilization. Benchmark prices have been trending down since 2015. Oversupply in resale properties and the addition of constant new developments around the city have made it difficult for homeowners to sell their properties. It took 1.4% longer to sell an apartment in December 2020 than it did the same time the previous year. This is the time for first-time homebuyers and young professionals looking to live innercity to enter the real estate market. Buy low sell high!
The year started off on the wrong foot but was not all doom & gloom. There were some hues of recovery for real estate in Calgary in the latter half of 2020. Celebrate small wins! Despite major oil price drops and a global pandemic, real estate is alive & well. The year was definitely no walk in the park but we are resilient and hopeful. The only way is forward so don't dwell on the "what if..." and the "I wonder..." moments. Think of 2020 as a warm-up for the new decade. This year will continue to have its uncertainties but remember to bring compassion and kindness to your actions and we'll get through it together.
Source: creb.com
