Insights by Vatsal Shah
Calgary’s real estate market is transitioning from the extreme seller’s market conditions seen earlier this year, offering more opportunities for buyers. August saw a significant rise in supply, with easing sales and new home construction helping to create a more balanced market. For the first time since late 2022, the months of supply exceeded two months—a clear sign that the market is adjusting. However, as Ann-Marie Lurie, Chief Economist at CREB®, notes, the supply of lower-priced homes remains tight, meaning competition in that segment will likely continue.
Despite a 20% drop in sales compared to last year’s record highs, August still posted a robust 2,186 sales—17% above the long-term average for the month. The decrease in sales was concentrated in homes priced below $600,000, reflecting the challenges in finding affordable properties. Inventory, on the other hand, rose to 4,487 units, a 37% increase from last year, though it remains 25% below long-term trends. Notably, the bulk of this inventory growth occurred in higher-priced homes, while supply in the more affordable segment continues to lag.
On the pricing front, Calgary’s benchmark price for August was $601,800—a 6% increase year-over-year, though slightly down from the previous month. This slowdown in price growth signals a cooling market, with year-to-date prices still up by 9%. While the market is adjusting, prices remain elevated, especially for high-demand property types.
Detached Homes saw a 14% decline in sales compared to last year, primarily due to supply shortages in lower price brackets. Over 85% of the available inventory was priced above $600,000, pushing the months of supply to nearly two months. This gradual shift is easing the pressure on home prices, with the benchmark price for detached homes standing at $762,600—9% higher than last year, despite a slight dip from last month.
Semi-Detached Properties saw inventory growth and a shift towards more balanced conditions. The sales-to-new-listings ratio dropped to 58%, more in line with pre-pandemic norms, resulting in a rise in supply and bringing the months of supply closer to two months. The benchmark price for semi-detached homes was $681,200, up 10% year-over-year but showing a slight decline from the previous month, reflecting the easing market conditions.
Row Homes experienced a significant 75% increase in inventory, largely driven by slower sales. Despite the surge in supply, prices remained strong, with the benchmark price hitting $461,700 in August—a 12% year-over-year increase, though slightly lower than the previous month. This segment is benefiting from a slight cooling of demand, allowing buyers to explore more options.
Apartment Condominiums also saw record-high new listings in August, with 1,001 units added to the market. Slower sales in this segment pushed the months of supply to 2.5 months, signaling an easing of the previously tight market conditions. The benchmark price for condos remained stable at $346,500, marking a nearly 16% increase from last year’s levels, showing that demand for affordable urban living remains strong.
Looking beyond Calgary, regional markets like Airdrie, Cochrane, and Okotoks continued to see tight conditions, particularly in the lower price ranges. Inventory remains low, but prices in these areas are on the rise. Year-over-year, benchmark prices saw gains of 7% to 8%, with the strongest price growth occurring in apartment-style properties.
As Calgary’s market shifts toward more balance, it presents new opportunities for both buyers and investors. While higher inventory levels and cooling price growth offer some relief, the ongoing shortage of lower-priced homes means competition will remain strong in that segment. Buyers looking to enter the market should act decisively while conditions continue to evolve.
Statistics Drawn From Calgary Real Estate Board (CREB®) September 2024 Housing Market Update: CALGARY HOUSING MARKET SEES SHIFTS
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