Calgary Real Estate Market Update - November 2024

The number one mistake new buyers or sellers make in this market is listening to their friends or family when it comes to their past war stories for real estate in Calgary. The Calgary real estate market here is hot in some areas and super slow in others. Now, just because the market for a certain product and price point was one way, it may not be the same anymore. If you wanna plan and understand exactly what the market is doing for your price range and neighborhoods, then reach out to us at the contact link in the description to get my team working for you and build a strategy that makes sense. But for today, the plan is we'll talk about the overarching market stats and uncover how outside factors are and will play a big factor in Calgary's market as we head into 2025. So let's get going. So let's start by looking at the months of inventory in Calgary. I mean, as you can see, we've had a wild ride over the last number of years. Anything between four and two and a half months of inventory is considered a balanced market. And last month, we actually were at 2.53 for the whole city. So walking into October, November, December, I was kind of assuming that we would end up seeing this move further into a balanced market, but it didn't. It actually dropped slightly down to 2.28 months of inventory for the whole city. So how did we get there? Well, let's take a look at this. The number of new listings per month that came on the market was 3,264 listings, which you can see right here. That was down from September, which was 3687, but it was up 22% year over year. So if you look at 2023, that's down here. So we definitely had more new listings come on the market than previous years. And it's actually some of the highest numbers we've seen, which is kind of a good thing, because when we get into a balanced market, that is a better market for everybody. It's a little bit better for sellers in some senses, in terms of it's better for sellers because it's not rushed. You don't have this intense market where it's just intense, right? You end up having much more of a normal market where it could take 30 days to sell your property, you have showings coming through, and for buyers, you have more options to look at. And ultimately, as an agent and someone who has bought and sold properties in different markets, I actually prefer a balanced market when I am buying or selling and working as an agent as well. So hopefully, more inventory comes to our market to bring us to a balanced market, but I don't know if that's gonna happen. So as we look at the sales per month, this is where it kind of gets a little bit interesting. We had 2,174 sales, which was essentially the same as we saw last October, and it was up from last month. We had more sales in October than we did in September. Now, let's look at this. There are some years, so it looks like 2016, you saw the green line go up here. A few of the other years, we kind of saw some increases as we went to October. Some of the years, we kind of saw it go flat, but there's also a few, like last year, 2023, where you can see the green line right here, where it dropped pretty quickly as we went into the new year, into December, right? And so what I honestly believe is going to happen is we probably will see this taper off and come down here, end up somewhere in this range, similar to 2023, or we will have more sales than 2023. That's most likely it. And the reason for more sales is just because there's more options, more inventory, and that's just kind of what my gut is. When it comes to full inventory per month, there's a lot of you who are waiting for, you know, these types of numbers, way up in here, nine, 10,000 listings, boom, it's just gonna blow up all these properties on the market, prices crashing. That's not what we're seeing. What we're seeing is the market actually had less inventory this month than it did last month. Now, albeit, it's like literally, what, 94 listings or something, or 104, whatever it is, but it's not that big of a difference. It's about 100 properties less than what we had last month, but we still saw less for this month. So what my gut, again, is we will probably see this inventory kind of sit in this range. Most likely we might, on the high end, flirt with this $5,000 range, or 5,000 listings range, right, you know, don't we all wish properties were $5,000, but we are probably gonna flirt with this 5,000 range all the way through to the end of the year. So we might end up seeing this black line kind of flatten out, but I don't think so. We'll probably see it dip down, most likely ending the year around, you know, 4,500 to 5,000 listings on the market. Now, if you wanna get a lot more stats, you wanna get a lot more information about our market, then make sure you go get our guide, and it goes through way more stats than I cover on this video. Everything from all the cities around Calgary, like Airdrie, but there's so much information in there, and if that's important to you, go get it. It's in the description, but let's continue chatting about our market. So inventory versus sales versus the benchmark price. Well, we all know inventory was at 4,966. We saw sales at 2,174. Red is sales, blue is inventory, and the green line up here is our benchmark price. Our benchmark price at the end of the month of October was $592,500. Now, this is a drop from last month, but only about $4,400, not a big drop at all, but compared to last year, it actually went up 3.6%. So year over year, we are still up on the market, on the benchmark prices, but compared to last month, we are down slightly. Now, this is also kind of interesting. I'll zoom in here a bit, but this inventory number, I mean, we are, again, sitting at that 5,000 number. When you go backwards, let me erase this, this is gonna be a super rough line. Let's pretend that's straight. So when you're looking at it, if we're to stay around this 5,000 range, I mean, we did see some markets in kind of going 2020 into 2021. From early 2022, we saw some high numbers, but in 2019, we had some really bloated years where we did see upwards of, that's probably close to 8,000, 9,000 listings at the top, kind of end of spring of 2018. So we have seen markets like this, and in those markets, you can see our prices stayed fairly flat. They were dropping slightly, but they weren't increasing. And so if we are to stay around this 5,000 price point or this 5,000 number of listings, this price range probably can still see some growth. Now, I know that's not what a lot of you wanna hear, but our market is still very tied now to other provinces, other cities, and to international buyers. And that's the difference that we've talked a ton about on this channel that helps you understand what's going on because that's the difference in understanding what is actually happening in our market. We can't look at what it was and compare it to that. We have to look at what's happening now and understand where it's going. So a part of that is also looking at some of the months of inventory for each of the product types. Again, I thought that we were going more into a balanced market as the numbers kind of went up, but what ended up happening is the only product type that is still in a balanced market is apartments. Everything else dropped a bit. So detached properties is currently sitting at 2.05 months of inventory, which is down from September, which was 2.46. We have semi-detached property sitting at 2.05 as well, and that was down from 2.08. So pretty much the same as last month. And for row houses and townhouses, that's sitting at 2.22 months of inventory, which is actually up from September, which was 1.98 months of inventory. That one's kind of interesting because I truly believe town homes are going to continue to be a hot commodity. And at 2.2 months of inventory across the city, they really are, right? They still really, really are. Apartments are at 2.84, which is down from 3.23 months of inventory. So apartments are the only ones that are sitting in a solid balanced market. Everything else is actually in a seller's market as of this month. So as I said at the beginning of the video, we are gonna talk about what some outside factors are and how they're impacting Calgary's market. If you recall, we have talked about this before, the RBC Affordability Index. And what this is, is they're basically looking at how much does it take of your take-home income to afford a property in that city, essentially. And there's a lot of other factors in there, but that's essentially what it means. And so when you're looking at the historical numbers versus Q1 of 2024, this is the last data that RBC has that I could find. When you look at places like Vancouver, historically, compared to this year, it is a massive jump. Toronto, massive jump. Other places like Ottawa, Ottawa, Ottawa, Montreal, even Halifax had a big jump. Victoria and just Canada across everything, like those are some really, really big jumps. However, look at Calgary and Edmonton. These two cities, compared to their historical numbers, are really, really close. And I just want you to remember that as we're going through this, because it's a very important part of still what people are doing when they're considering making a move to Calgary. And you might think that the people moving have slowed down. It has. I mean, I hear from you when you're wanting to make these moves, it has slowed down for now. And I think there's a shift that's gonna be happening in the future because Calgary is now on the radar of not just like buyers, but economists. And when economists are now talking about Calgary and Edmonton in the same breath as when they're talking about Toronto, Vancouver, and Ottawa, well, that kind of says something to where the Calgary market and the Edmonton market is sitting on the national scale. And people are still moving here. So if you take a look at a four-quarter total as of Q3 2024, we still have roughly, what, 43, 44,000 people that have moved to Alberta from other provinces. And they're coming from Ontario and BC, mostly. And so when you look at international stage, basically the population growth year over year, Canada's population grew by 3%, and Alberta led that at 4.4% growth year over year in Q3 of 2024. Now, I know that there's gonna be some changes with people who are coming to our country and immigration is adjusting, which is probably a good thing in some ways because you just can't keep having people, a lot of people moving to our country because it impacts a lot of our economy. At the end of the day, those people are not all buying properties. They're renting a lot of places. And right now in Calgary, there is an explosion of purpose-built rentals that are going on the market. So if you have a property and you're planning on renting it out, just know that there's a lot of competition coming to the market when it comes to rental properties. And there could be even more in the future. When you take the increased number of rentals that are coming to our market tied with a slower growth of the population, potentially of those that would be renting first when they move here because they're not gonna purchase right away, that could cause a little bit of a imbalance, right? Supply and demand. And with that imbalance could end up causing some softening of vacancy and softening of rental rates. Is that gonna impact the purchase market, the resale market? It could, it could. And so all of these dynamics that are hitting our market are a little bit unknown with what's happening as we move into the future years of 25, 26, 27 and understanding what's happening in our market. Now, out of all of that, here's where things get a little bit interesting. Confidence is on the rise. So this is a consumer confidence index from Sources Bloomberg. And with interest rates declining, Canadian consumers are feeling more optimistic and confidence has risen to 30 month highs. So we're seeing this. And I'm seeing reports of a possible 0.5 drops in December and maybe in January, which I really hope there aren't because that's a really big signal that our economy is in a bad place. And it's also gonna weaken our dollar as we move towards 2025 and into the summers. So we're just, we don't wanna like, anyways, you and I don't get to make the decisions. We have to live out what's happening in our market. And so at the end of the day, consumer confidence is rising because of this interest rate dropping. So how does that play out? Well, the one thing that when you have a mix of consumer confidence and you have for people, for here, Alberta, you have people who are moving here, there is potentially a shortage of supply. Now, this is all about single family homes. And if you look at single family building permits, they have not been this low since the 1980s. You know, less construction today means less available supply in the future. And so this I thought was very, very interesting. And I wanted to dig into this a little bit. So I wanna share this website with you. So if you go to the economicdashboard.alberta.ca, you can actually see a lot of information, a lot of stats. This chart right here is actually all Ontario housing starts. Now, I wanted to compare Ontario to Alberta to BC. Are we all in the same place? So if we actually go back and we look at the 1980s, you can see in Ontario, they kind of have, you know, for those first, let's say the first five years, on average, 2,500 starts. And then it kind of jumps up into, let's say, roughly 7,000 numbers, okay? Now, if you look at today and 2020 and onwards, so now you got 2019 to 2024. I mean, we're sitting at, in Ontario anyways, housing starts there's kind of flirting closer, you know, especially this last year, there's some spikes in there for sure, but it's probably closer to the 6,000, 5,000, 6,000 range. So the number of housing starts altogether, it doesn't look that bad. But when you break it out by unit type, this is where it gets a little more interesting. So when you're looking at Ontario and you kind of look at the whole market, it kind of has similar numbers as it does in the 80s. So that chart that I found doesn't really make a lot of sense. When you go to the 1980s here and you start looking at just detached properties, that's the orange numbers. So you can see they were kind of around 2,000 kind of jumping up. There were some increases into the late 80s and probably around 4,000. Okay, well now let's look here and now, there's your numbers. Detached properties are being built way less than they were in the 80s. So you gotta remember, like what's the reason that we're talking about Ontario numbers compared to Calgary? Because even if you look at BC and you look at total units, they're 1980 numbers. Again, it's the orange. Oh, I'm just trying to, there we go. Same thing, you can kind of see they kind of climbed up in the 80s. You got roughly 1,000. And now, like that's probably 500. So there's half and this is for the whole province. This is just not for like Vancouver, Toronto. Now, if you look at Alberta, let's look at this. You look at Alberta, I believe it's a different story. So in Alberta in the 80s, we were kind of, I'm not sure the reason for the 80s, but that's what this article was talking about. And so in here, they're kind of a 500 kind of range. Now, when we compare, we're kind of double. Now we're in the 1,000 range. So what do we make of this? Let's think about it. If you have cities across the country that have economic issues where they cannot afford where they're living, or it's really hard, they could afford it. They've been there for a while. People have been there for a while. You have been there for a while and you can afford it. Now, a pandemic happens. You start working from home. Maybe you're still able to work from home, three days there, home, whatever. Like you have options now, unlike you had before. We went through this boom where a lot of people moved here to find affordability and a lot of people are staying and there's definitely people that are leaving as well. So there's people who did move here and aren't staying anymore and they are gone. And that's okay. Like that's normal. Like if you don't like it, then don't stay. But there's a lot of people who have stayed because they have liked what they moved to, whether that's Calgary, Edmonton, other places in the province. Now, prices in those first cities have softened. So they wanted to move, but now they can't because now their properties have decreased in value. And what they were hoping to bring, three, four, five, $600,000 in cash of equity from their properties back home or in their cities of Toronto, Vancouver, BC, Ontario, they're not able to pull that same amount of money. And prices here in Calgary have gone up. So the whole, it just doesn't make sense anymore. But if in the future years, and I'm talking maybe one, two, three, four, five years out, we could see a shift happening, right? Because their markets are kind of in a slow place, but they won't be forever. Calgary is in kind of a busy place, but prices are still really, really low. Our affordability index is still really, really low compared to those other cities. So in the future, as those markets start increasing in value, or they just start moving again and they come out of the buyers or the balance market and move into sellers markets for different product types and price points, which it could happen, as interest rates drop, we could end up seeing more people coming back to our city. So here's what I make of this. If you are a local person, you have been maybe born and raised in Calgary or have lived here for a very long time, and you are wanting to make a change in the market and you're wanting to make a move, truly, this is a time that I think is really important to understand this, what's going on. If you are able to make that change in the coming year or so before all of this other stuff happens that I just talked about, there's a really good chance you could position yourself and your family to have a property that appreciates because I do believe Calgary still has a lot of appreciation in it. Now, I know a lot of you are hoping for property values to go down and just crash, but I don't believe that's gonna happen. Specifically, because of the inter-provincial migration that's happening and the way that Calgary is positioned inside of all of these cities, it just doesn't seem like it's gonna be that way. Now, are we gonna turn into the next Vancouver and Toronto? I certainly hope not. In the terms of, because I love these cities, in terms of the affordability, in terms of the number of people, and in terms of so many factors that people are leaving these two cities and coming to Calgary, I really hope we don't turn into that. But what we turn into could be kind of exciting. Now, listen, if you're worried that you won't be able to make the moves that you need to in this market, just remember that the right strategy and knowledge combined with a ton of patience, it's very possible to make the move in this market. Now, I hope this is helpful to you. If so, give us a chance to help you out with your move by reaching out to us at the contact link in the description, and we'll see you guys in this video.