Boo! I spent most of October scrolling through endless posts of dogs in Halloween costumes but it's time to dive back into some adult content. October sales pulled back compared to last Halloween. With detached homes being the biggest driver in the real estate market in the last 18 months, the easing of sales in this segment decelerated market growth this quarter. That being said, the pullback in sales in Calgary is not as drastic as seen in other major cities in Canada because of our strong demand for multi-family property types like townhomes & apartments. In 2022, the city reached 26,823 sales; with a couple of months left, we expect another record year in sales. We are not immune to inflationary pressures or the impacts of increased lending rates but Calgary is seeing strong employment growth, positive migration flow, and a stronger commodity market to help offset negative impacts. The real estate market is not as tight as it was compared to the peaks in May, but sales growth is still going strong and way above long-term trends & pre-pandemic levels. Shall we see how the micro-markets are for each property type?
DETACHED
Even within the same property type, there are shifts pulling in opposite directions. There were less than 2000 detached homes for sale in October and more than 42% of those listings fall in the upper-price ranges. Buyers looking for detached homes for less than $700,000 are experiencing tight market conditions because there just is not enough of these homes to go around. The limited supply in lower price ranges caused an easing in sales activity this month, despite the increase in sales for properties priced above $700,000. In other words, pricing trends will vary depending on price range. There was a slight pullback in the benchmark price of detached homes to $623,900, but it is still almost 12% higher than October of last year.
SEMI-DETACHED
As buyers shift their attention toward more affordable multi-family property types, sales of semi-detached homes eased more in October. There were also fewer new listings this month, pushing the sales-to-new-listings ratio up over 84%. The benchmark price came down a smidge from last month but it remains over 9% higher than last year. Annual price gains varied depending on where you were in the city. City Centre district saw modest price gains of about 8%, while Calgary's North district saw a high of 16% in price gains.
ROWS & TOWNS
The rising star of 2022! Unlike the properties types that we just talked about, the townhome market is still running hot. The benchmark price of $361,000, is not even 1% lower than the peak in June this year; four months later, we've barely slipped from the highs. Compared to last year, the benchmark price of townhomes grew by almost 15%. The most significant price growth was in Calgary's North, NE, and SE districts. The sale-to-new-listings ratio reached a whopping 106% this month. October sales were strong, but there were fewer new listings that came to the market so this is still a strong seller's market.
APARTMENTS
Up, up, and away. Apartment sales continue to rise above 2021 levels. The growth in sales surpassed the number of new listings that hit the market this month. As the inventory levels fall, the months of supply in October fell below three months - the lowest level since 2013. The benchmark price is pretty much the same as it was in September, but at $277,800 it was almost 11% higher than in October of last year. Price gains have been slow & steady but this year has been a saving grace for many apartment owners that have been patiently waiting for signs of recovery. The strongest price growth were outside of Calgary's downtown area, where oversupply & density is the common obstacle.
Historically, sales activity simmers during the cooler months and that seems to hold true for 2022 as well. Th real estate market is correcting itself from the rapid growth that we saw over the last 18 months. That ship has sailed and we have to be extra diligent with navigating the market. Besides, aren't you tired of hearing the words "crazy" and "hot" when people are talking about real estate?
Source: creb.com
