Advice for Calgary Home Buyers - February 2023

Know Your Market! That is the most significant advice for those looking to buy a home or are planning to buy here in Calgary. 

This time last year, every part of the real estate market…every segment, and every price point was the same; everything was selling quickly & in most cases, close to or over the list price. There was no negotiating, and in some cases, you were lucky even to see a home before there were multiple offers. 

This year, the overall market is very different, as each segment and price range is shifting at a different pace. The increase in interest rates has impacted overall demand, and in 2023 I expect to see a continued shift to more affordable product types. 

For example, the townhome & apartment markets, the two more affordable segments, had a strong January. 

Townhome sales, although down compared to 2022, were well above the long-term trends for the month, which, combined with the lowest inventory levels since 2014, helped push prices to a year-over-year increase of 12%. So, if you are planning to purchase a townhome over the next six months, be prepared to act quickly and pay close to the asking price, as sales in January averaged 99% of the list price.

Sales for apartment condominiums were also down compared to 2022, but they did not see the same pace of decline as other property types. This segment had a very tough time between 2015 and 2020, primarily driven by oversupply, and although it hasn’t fully recovered, it has come a LONG WAY over the last two years, with the majority of that excess supply being absorbed. If you are shopping for an apartment, know that this segment isn’t moving as quickly as the townhome market, but if a new listing is well-priced and presented well, it will also sell quickly.

Ok, let's finish off by talking about detached homes. Here is an example of knowing your market & how conditions can vary within its segment.  Overall detached home sales saw the most significant pullback in January, with totals the lowest since the beginning of 2020 despite a year-over-year rise in inventory levels. 

When we dig a little deeper, we see that the higher lending rates are cooling demand for higher-priced homes resulting in inventory and months of supply gains in the 700,000 dollar and above range. Meanwhile, a limited supply of lower-priced homes is preventing more robust sales in the lower price ranges. Which means if there were more lower price homes, there would be demand for those to sell. 

If buying a detached home is your goal in 2023, the price range you are shopping in will affect your strategy and experience.  With the shift to more affordable product types, there is a strong demand for homes priced at $550,000 and below, and with low inventory levels at this price point, expect to see things move quickly. If you are shopping for a home priced at $550,000 and above, you will have more to choose from and find homes that aren’t selling as quickly. With that said, I have seen higher-priced homes move fast if they are priced well, or there is something unique about them, which could be a large yard, a location backing onto a park, or even something like a recent renovation.

So what this simply means is don’t be surprised if it still feels quite busy out there if you are looking to buy something in one of the more affordable products or price ranges. Yes, the market is in a different place than it was last year;& yes, we are in one of the slowest sales months of the year, but the conditions are set for these areas to have a strong start in 2023. 

You can watch the video here:

Advice for Calgary Home Buyers: February 2023