It seems fitting to use the word “drought” when describing the real estate market in Calgary this past month. It seems the further we head into the summer months; our real estate market continues to get more and more competitive. And it doesn’t show signs of slowing down any time soon. But that might change!
How did we do this month compared to last, or even last year? Let’s take a deep dive into the numbers above and understand where we might be going as we head into the summer months.
In April, our absorption rate increased by 10% from last month to the highest point so far this year, 81%. This means that for every 10 listings available on the market today, just over 8 of them would be sold.
The last time we hit this high was in February of 2022 at 86%.
But there was a cliff in 2022, which I’ll get into a little bit later.
Compared to last month, our number of listings is down 3% while the number of sales increased by 11%. This growing appetite for buyers in our market is something that was initially triggered last month and has continued through April.
Compared to last year, we are down a whopping 52% in listings from this same time while sales have only decreased 26%. Another indicator of a buyer’s appetite on our market remains strong.
Comparing from last year to now, for everyone listing that comes on for sale, there are 2 buyers ready to purchase it based on the above metrics.
Albeit it's not the insanity of 2021 that we exhibited with properties attracting 20 to 30 offers, however, it is still a very steady slow bleed of inventory.
And this slow bleed is the one that should be concerning to those wanting to buy in our real estate market.
As this trend continues, inventory will continue to decline leaving more and more buyers vying for the same property.
And this time, it will be out of necessity, not a crazed mindset to purchase because of excess cash in the hands of consumers.
The pricing for each segment has continued to see growth, except for the semi-detached segment, which saw a decline. The increases across the board have been modest month over month, but we are still very much a more expensive market than a year ago.
Remember when I mentioned that cliff in 2022? Well, here is how it went down last year to jog your memory. In March, our ABS (absorption rate) was 88%. In April, that number tanked to 67%.
The reason for this big correction was higher interest rate announcements.
Well, those higher rates are now the norm.
There are more and more deals falling apart now due to issues with financing because of higher interest rates, harder qualification rates and criteria and more and more lenders shying away from taking on more mortgages.
BTW, you can tell a lender doesn’t want more mortgage business when they set their rates to levels that are way outside of the competitive market.
So, with these higher rates sticking around now, buyers are having trouble qualifying (but those that are prepared are still very active) and sellers are scared to come to the market if their intention is to find that next home. With higher interest rates and higher prices, they are deciding to stay put.
But every seller has a price in mind that they would like to see before listing their home for sale. As we continue to have higher and higher pricing, those that want to downsize might be seeing their price goal soon and decide to list.
And it’s funny, in real estate, as one goes, so do the neighbours.
We can expect to see a little bit of recovery with listing numbers as sale prices become more and more enticing for sellers that are able to take advantage.
When supply increases, hopefully, it can eat into the demand and stabilize pricing.
But only time will tell if we can recover some of the significant losses in our inventory.
If you are considering selling, it is still a very, very good time for you. Let’s discuss your options.
Buying a home is a bit tricky nowadays, but not impossible. We should discuss how you can position yourself so that you are able to have everything in order and act quickly so that you can take advantage of the market over those buyers that don’t have their financial house in order.
As always, I truly appreciate your time to review my breakdown of the market last month. I hope you find the pace of it easy and at the same time very informative for you. If there are any improvements you can see that I can make, I’d love to hear from you. Please feel free to reach out at any time.
Thank you again and have a wonderful month ahead.