2023 Recap & An Early 2024 Outlook

by Scott Glover

Over 1,300 people in Calgary got a new house for Christmas this December, but how much did they have to pay? The Calgary Real Estate Board says prices are up, and the market is hot! But is that the whole story?
We’re going to go through the December sales statistics and do a quick review of the year that was in 2023, and also take a sneak peek at what you can expect our market to be like as we turn the corner into 2024.

NOT MUCH HAS CHANGED

First, let’s discuss the overall Calgary market and how it went in December. The Calgary Real Estate Board is reporting that prices are up once again – this time by over 10% from December of 2022.

But this isn't the whole story. In each of the last five months, we have heard a very similar story from the Board – that we have seen year-over-year price increases, but for those agents out there actively trading it hasn’t seemed like things have changed all that much in the second half of the year.

The average price of a piece of real estate in Calgary in December was $570,100 – up by 10.4% from December of 2022. However, just like we said last month, the pricing has actually been FLAT in Calgary since August. Taking a look at this graph (below), you can see the average price in Calgary in December has basically been the same for five months, indicating that most of Calgary’s gains happened at the beginning of the year, and
pricing has been holding steady at around $570,000.

We can also see that Total Sales have followed their traditional seasonal decline, culminating in an annual low of just over 1,300 sales in December which, as it happens, is about 15% more than we saw in December of 2022.

THE PRICING PICTURE

Given that the overall average price in Calgary has been consistent for the last five months of the year, the same can be said for each of the individual asset classes that feed into the overall average.

In December, the average price of a detached property was $697,400, up 12% from a year ago but actually down slightly from November.

Semi-detached properties sold for a bit less, as they always do, for $627,100, up the same 12% year-over-year, but nearly identical to November’s numbers when the average was $628K.

Row townhouses and Apartment condos continued their breakout years in Calgary, each up by nearly 20% year-over-year to $425,100 and $321,400 respectively. Again, those are almost exactly the same prices as the previous month.

STILL A SELLER’S MARKET!

So, did we end the year in a Buyer’s market or a Seller’s market?

Well, in December, we closed out the year with a Months of Supply metric of just 1.58 – which is very much in Seller’s Market territory, as we have been all year.

In fact, if you look at this trend heading into 2024, you can see why most signs are pointing towards another really good year for Calgary. We are well below balanced market conditions and solidly within Seller's Market territory.

ANOTHER BIG YEAR AHEAD
With no retreat in pricing across any of the asset classes in the second half of the year, despite sales following their predictable seasonal decline, our read is that Calgary is gearing up for another big year of price increases and sales gains.

2023 won’t be considered a breakout year for Calgary real estate in the sense of our overall market – that happened in 2021 and 2022. However, last year will be known for the resurgence of the Apartment condo segment and the establishment of the Row townhouse asset class as the new ‘starter home’ for small families moving to Alberta.

Five or six years ago, the story was about a glut of condos in Calgary. A hangover from the boom years of 2013 and 2014, there were dozens of condo towers built that had oversupplied our market and depressed apartment-style condo prices for more than half a decade.

But this past year, things changed. Overheated and overpriced markets in Ontario and BC have made Alberta look like an excellent value by comparison, and in those markets, condos are a much bigger piece of the real estate pie than they traditionally have been in Alberta.

So, when buyers from the GTA worked their way westward and found such relatively cheap condos available, they snapped them up quickly. And as net migration to Alberta has continued to grow, we’ve seen condo living break out in Calgary in a way we haven’t seen for decades. It’s exciting for our market for many reasons and a trend we will watch keenly in 2024.

Row townhouses, by extension, have become much more valuable and, in our opinion, now represent the new ‘starter home’ for young families in Alberta, as you can find three bedrooms and a garage for under $450K in Calgary with relatively modest condo fees.

Detached pricing has climbed significantly and will almost certainly eclipse $700K next year, and with apartment condos making up a bigger and bigger share of our market, it will put even more pressure on the special little island of affordability that is the Row townhouse segment.

THE RING ROAD IS A GAME CHANGER
In other news, Calgary finally has a complete ring road, as residents in southwest Calgary were treated to a special holiday gift when the last segment of the road was completed – well ahead of schedule and on budget – and
opened up for use in December.

This is a total game changer for the southwest part of the city, as access to central Calgary and the airport are now so much easier than they were before, and you can be sure it will feature heavily in ranking Calgary’s top communities for 2024.

LOOKING AT THE YEAR AHEAD
So, what are our early predictions for 2024?

I expect a strong year in Calgary with solid single-digit price growth amid Seller’s Market conditions. Given the recent equity build-up in the more affordable Condo and Townhouse segments, the conditions are set for the Detached segment to be strong this year. Those owners can seek to trade up into the Detached segment, where little new supply is being added to the market.

So, if you’ve been on the fence, contemplating getting into that detached home in the burbs, it will only get more challenging in the years to come, so it’s never a bad time to start looking.

2023 Recap & An Early 2024 Outlook

by Scott Glover

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