Market Dynamics and Inventory Levels
In January, Calgary witnessed an astonishing number of listings — 2,150 to be exact, with sales reaching 1,650. This represents a 72% absorption rate, indicating a market with less than a month’s supply of properties, assuming no additional listings come up. This level of inventory is the lowest we’ve seen since 2006, signaling a tight market with bidding wars becoming increasingly common as buyers vie for their desired homes.
A Look Back to 2006
Reflecting on 2006, a year many remember for its rapid price increases, we find ourselves in a similar situation today, albeit with some differences. Unlike the gradual lead-up to the frenzy of 2006, today’s market is not recovering from a slowdown; it’s been consistently active. This similarity to 2006, with even lower inventory, suggests we might see continued upward pressure on home prices.
Altadore: A Microcosm of Calgary’s Market
We delved into Altadore, an intercity community, to gauge the market’s temperature at a more granular level. With only 17 active listings against 19 sales and 14 pending sales last month, Altadore exemplifies the city-wide trend of scarce inventory and high demand, especially in niche, higher-value communities.
Segmented Market Analysis
Analyzing different housing segments in Altadore, we noticed distinct patterns. Detached homes, for instance, are selling so quickly that the supply is expected to last less than three weeks. Meanwhile, row homes and apartments also show a significant disparity between list and sold prices, highlighting a competitive market that’s moving fast across all segments.
Price Trends and Future Projections
From December 2023 to January 2024, Calgary saw a 1% increase in home prices, with detached homes experiencing a 13% year-over-year increase. This trend is expected to continue, with predictions of price increases ranging from 11% to as high as 20% in some communities. Such growth is driven by strong demand and low inventory, a situation unlikely to change in the near future.
Government Initiatives and Market Implications
The Canadian government’s recent push towards increasing housing stock, particularly through incentives for developing rental properties, aims to alleviate the strain on the rental market. However, this focus on rentals might not significantly impact the availability or prices of owner-occupied condos, which have yet to recover to their 2006-07 price levels.
As we navigate through 2024, the Calgary real estate market continues to present opportunities and challenges. With historical parallels to 2006, the current market dynamics suggest a continuation of strong demand, low inventory, and rising prices. For buyers and sellers alike, understanding these trends is crucial for making informed decisions in this vibrant market landscape.