Calgary Real Estate Market Update - December 2024

Since June of 2024, we have actually seen the benchmark price drop in Calgary. So is this run that we've been on, is it over? Are we officially packing it in and kind of moving on from growth inside of our market? Well, we're gonna talk about stats in Calgary. We're gonna talk about the mortgage changes that are happening this month and so much more. So this is your Calgary real estate market update for December, 2024. Let's get going. Yes, that is right. The benchmark price right now in December, 2024 is $587,900. And that is down from a high of $608,000 in June. You can see that on the chart right here. Now it's not our first rodeo. We've definitely seen decreases over the years, but this one has been kind of consistent all the way through for the last, what is that, six, seven months. And so is our market over? I mean, it's kind of dropped even steeper in the last little bit. We have way more inventory than we have seen in the past number of years, albeit nothing like what we've seen in the past years. And I mean, sales are actually still pretty strong. Like if you were to take this number and slightly, that might be a little bit off, but I mean, like we have the number of sales in November that are some of the highs of 2019, 2017, right? Of the peaks in the spring. So what does this all mean? Well, we're gonna look at a whole bunch more stats. We're gonna look at the inventory. We're gonna look at the sales because we need to get a full picture of what is happening. Now I know going into Christmas, winter season, the market does typically slow down. It does adjust a little bit and that's okay. I mean, we've had a pretty big year. We've had a lot of transactions. We've had a lot of price growth. We've had a lot of frustrated buyers, frustrated sellers, happy buyers, happy sellers. There's been a lot of things that have happened this year in 2024 and we've had an interest rate drops, right? And we could see another interest rate drop potentially happen in December and in January. Now they have been forecasting that we could see half percent drops, but now that's been pulled back. I don't know. We don't know what's gonna happen. At the end of the day, the market is shifting. The market is changing. The market is reacting. We have a new coming president in the US that could impact some Canadian economic things. There's a lot of stuff that's just going back and forth. We really don't know how it's all gonna shake out. All we can look at is what has happened and help you figure out what is the best position to put yourself in when it comes to real estate here in Calgary. So as predicted, new listings drop. We actually saw 2,326 new listings come on the market last month in November. Now this is a 4% increase still from 2023, but the increase in listing has not yet bridged the gap in specific segments where demand is outpacing supply. So it's not really helping us that much. And truth be told, I mean, we did see this drop. Now, new listings, there are a lot of people out there who are kind of waiting for our market to kind of blow up and they would love to see this go like this. I, as a homeowner, as an agent, I don't wanna see our market blow up. I think we're gonna be in a good position in the coming years. Calgary, I mean, we've talked a lot about this, but Calgary has been now on the map. People are talking about it. You know, people are still moving here. If we see the amount of growth that we have seen, even if we saw half of the growth that we've seen and that was a consistent growth over the next five, 10 years, that'd be incredible. And so it does still bring in a lot of things for affordability for those that are trying to get into the market. It kind of changes Calgary's future. And I don't, you don't know. I don't know what's gonna happen in the next 10 years, let alone maybe in the next year or two. So at the end of the day, what does this look like? Well, the number of sales. The number of sales also decreased, but with sales, it was the same as 2023. So we didn't have less sales than we had last year. It was like within or under a percentage difference or something like that. We had 1,797 sales in Calgary. So there is still a very, very strong demand in lower price products. So watch for some videos we're gonna put out the end of this month, where we're actually gonna be talking to our team and our agents and what their experience has been this year, because you might be a little bit surprised if you're not in the game of real estate and transacting every single day, you might be a little bit surprised with what you hear, what's actually happening in the market. So watch for that. But as we go into inventory, well, inventory dropped. I mean, we had 4,352 homes on the market at the end of November, and that was a drop from last month, but it is up 45% from 2023. The 2023 numbers you can see are in green down here. And this is where we are today. And so this number, as I projected, it would drop and kind of follow the path. December, we'll probably see less. Like we're not gonna see, most likely, we're not gonna see more inventory on the market. It's gonna, this is kind of a time of year that things do slow down. People are like, I'm gonna take my house off the market and put it back on spring. Now, for your own choices, that might be the right thing. If you need to sell, there's still a lot of sales that are happening and buyers that are interested. So it's kind of what is best for you. Now, if you wanna get more information about the market, what is happening in our city, then you wanna get our market update. This report has so much more detail, so much more information in it for you than what I'm gonna go through in the video here, but let's continue. So when we look at months of inventory, the months of inventory for December was 2.42 months for the whole city. So you can see we kind of jumped into a slight balanced market. We dropped down and now we've kind of gone up a little bit. That's the last three months. We're just kind of flirting with this balanced market line. Ideally, roughly two and a half months of inventory is kind of the break point where it could be moving into a balanced market. But you can see that there's still enough demand in our market that it's keeping the whole market of Calgary kind of moving all the way into that balanced market. So there's still demand out there, which is shown in the numbers that I just talked about. Now, if you go and look at the individual property types, this is where it plays a little bit of a different game. So detached homes, they're all kind of sitting here and they're too tight to even really show you, but here are the numbers. Detached homes were sitting at 2.14 months of inventory. Semi-detached was sitting at 2.10 months of inventory. Row houses were actually at 1.98 months of inventory and apartments are at 3.45 months of inventory. So you can see the apartments are the green ones here. So apartments in our city, historically they've always been a much more volatile type product to own. Not in every community, but overall, generally, they can slow down or speed up quicker than like a detached home or a semi-detached home or even townhomes. And so I'm not surprised to see that we're in a really strong balanced market when it comes to apartments in the city. However, I was just talking to one of our agents and he just listed a condo in Okotoks and I'm giving you a little bit of a cheat of what I'm gonna show you, but he sold it in a day. The market in Okotoks is so different than all the other places and towns and cities around and including Calgary, and I'm gonna show you why. But this is where we're at, sitting with months of inventory. So again, the rest of the city, all the different product types are sitting in a seller's market still. So I wanted to interrupt this video really quickly to tell you something special we've been working on. We have been looking at the past content that we have created and we are putting that on Spotify for you. So jump on to Spotify. If you like listening versus always watching on YouTube, go on to Spotify. We're gonna be uploading a lot of our greatest past content for you, as well as all of our content moving forward. So go ahead, jump into the description, grab the link, head over to Spotify and we will see you over there, but let's get you back to this video. So one of the things that we do watch a little bit, we don't pull numbers every single month, but is of the active and pending properties that are on the market in Calgary, what is their last change status? So meaning, were they a new listing? Were they a price decrease? Were they back on the market? Or were they a price increase? And we kind of just pull the percentages to kind of get a sense of what the market is doing in different product types. So for detached homes, as of, I think this is December 2nd, I pulled the numbers, 57% of the detached homes on the market were actually brand new listings. 35% actually were price decreases. So a third of the detached properties on the market have decreased their price and that's their last change status. 5% have just come back on the market and 1%, that 1.7%, it's kind of consistent, 1.6, 2.7 and 1.1, they've increased their price. So maybe they underpriced it, I don't know. And they've increased their price because they had too much interest. I honestly have no idea, but at the end of the day, that's how it breaks down for detached properties. And it's fairly similar for all the product types. You have 57% are new listings for semi-detached, 32% have price decreases and 3% are back on the market for semi-detached properties. Townhomes, it's very much the same story as the other two, 57%, 34%, 5% and 2.7%. So the ratios are very, very similar. Where it is different is actually right here. There are more price decreases happening with apartments than any other product type. They're sitting at 42%. So that's about 10, 5, 10% more price decreases in that product type than compared to the other ones. So again, when we go back to here, when you're seeing more of that balanced market in the apartment sector, this kind of shows that there are more sellers adjusting their prices downwards and hoping to sell the property. Now, what I wanna share with you is actually about the towns around Calgary. And so if you remember, let's kind of skip up here, back up to this. So the Calgary chart, I'm gonna get rid of this stuff. There we go. So the Calgary chart that we have, we've looked at this a lot, right? We've looked at this a lot. And over the years, we've had a ton of inventory and then there's been a lot of sales and now we're kind of growing that inventory again, still in a really good place for the city. But I wanted to share with you what's happening with like Airdrie, Cochrane, Chestermere and Okotoks, just to give a really quick sense of what's going on there. So very similar to Calgary, there was a very large inventory back here. Look how strong the market was in early 2022 for Airdrie, where the sales really outpaced the inventory and it was really tight for those years. But look at now, the inventory has really jumped. Now, all that to say, if you take away all these arrows and everything, you're still sitting at a lot of sales. I mean, much higher than what you were seeing back here in those years. And in talking to our team, a lot of them have even said this morning that inventory in Airdrie is really tight. So the numbers are showing that there's a lot more on the market in Airdrie, but really they're only sitting at a 2.73 months of inventory. So they were just kind of barely got into that balanced market. And their benchmark price right now is at $543,300. So they're sitting in a place that, I mean, you kind of expect it to be, but the numbers are a little bit different than what it feels like in that city. So there could be a lot of inventory that's been sitting there a while and it's just not the best inventory potentially, or buyers have seen it already and they're waiting for something specific. I don't know the situations, but at the end of the day, there's a feeling of it being really, really tight. Then if you look at Cochran, now Cochran has a 2.65 months of inventory. So again, they are just flirting into the balanced market and their benchmark price is $568,600. And like Airdrie and Calgary really, those early 2022 years, they also really saw strong sales and the sales even now, they're still fairly decently strong, but inventory has been larger in Cochran than it has been in Airdrie when you saw the stats there. So it's just one of these things. And again, I'm getting to the point because this is really interesting. Now, Chestermere, Chestermere is sitting in a completely different situation. Chestermere itself, it is a great town. It's a great city. It's just had some design flaws. It's harder to get around than the other three, including Okotoks, and it's grown really, really fast. So what has happened, there's a lot of new builds there too. And so what has happened, the inventory over the last little bit has really, really jumped. So it's nearly, actually it's in a buyer's market now. Chestermere itself is sitting in a buyer's market when all the other towns around Calgary are actually kind of in a low balanced, even into a seller's market. So there's something a little bit different going on there, but they are sitting at 4.24 months of inventory and their benchmark price is $707,800. And why there's such a big gap there is because there's a lot of luxury type properties in Chestermere that are close to the lake because there's a big lake there if you didn't know. So that is a big part of what's happening in Chestermere. Now, here's where it gets really interesting. Okotoks, look at how low the inventory is in Okotoks over the last number of years. It also, sorry, it also saw that spike in early 2022, but every other city, including Calgary, has this inventory growing like crazy right now. And again, it's not to the crazy to the point where our market's flipping and we're getting into kind of a buyer's market and everything's falling apart. It's just added inventory that's sitting a little bit longer. I mean, Okotoks is sitting at 1.44 months of inventory. That is a very, very strong seller's market and their benchmark price is $624,000. Now that's a very different market than what we have seen. Where Calgary and other cities have seen decreases in benchmark prices, Okotoks is actually seeing sustained growth. So what I mean by that is right here, they have seen really, really simple, sustained growth. You've seen sustained growth, but we're seeing a little bit of stagnation and potentially drop-off in Chestermere. Here, we are seeing a drop. And that was in Cochrane. Eridre, we're seeing the same thing. And in Calgary, we already looked at it, we're seeing the same thing. So when you look at all these other places, Okotoks is actually standing out compared to every other town and city and they aren't seeing the same slowdown that the rest of us are seeing. So remember, if you wanna get more stats, more in-depth information about all these detached, semi-detached Eridre, Cochrane, about the Calgary market, go into the links in the description and grab our market update for this month. So you might be aware that there are some mortgage changes that are coming into effect here in December. So I wanna run through those so you are up to speed, you know what's happening and what to expect if you're planning on buying anything in the next month or in the future months because these could impact you in how you're purchasing a property. So the first one is the increased price cap for insured mortgages. So it used to be an insured mortgage would only go up to a maximum of a million dollars. They've increased that to 1.5 million. Now, this impact with Calgary's market, I mean, majority of the properties are not million dollar or greater properties, right? So it's not really going to affect a ton of people. I really believe this change, this specific change is really geared towards Vancouver and Toronto, the higher priced cities in our country to allow more people to purchase properties that are insured. And so it probably is going to help them more than it's gonna help us here in Calgary. However, if you're gonna do this, the down payment structure, you have 5% of the first 500,000 and then 10% on the portion between 500 to 1.5 million. So you're gonna play with some numbers and kind of be ridiculous. If you're gonna buy a $1.5 million property and it's gonna be insured, you're gonna have $125,000 down on a $1.5 million property. Let's say you had 4.5% interest and you did 25 years, you'd be paying $8,600 a month just for the mortgage. So I don't highly think that this is something when it's gonna be leveraged for that type, that many people, but at the end of the day, that's how the structure works. Now, the other change is the 30 year amortization. So available for first time home buyers and buyers, any buyers of new build properties. So I really believe that they're gearing towards people being able to buy new properties, right? So adding housing to our market, that's what the government is trying to do there. And then for first time home buyers, just whether you're buying a resale or you're buying a new home, you can have a 30 year amortization. This also takes effect December 15th. And it also applies to high ratio mortgages. So if you have to be a first time home buyer, purchasing either a new or an existing home and all buyers of newly constructed homes. So how do you know if you're a first time buyer? Well, if you've owned a home in the past, you still could be considered a first time buyer. Here's the definition. Borrowers must meet one of these for the requirement. They've never owned a home before. They haven't lived in a home owned by themselves or a spouse in the past four years, or they're recently separated or divorced. So if any of those criterias are you, then it's worth kind of talking to a mortgage broker to see if a 30 year amortization is something that is available to you, whether you choose to take it or not. Now, the homes must be newly built if you're gonna do a 30 year amortization on a brand new build. So this includes condos, but there's no occupancy allowed prior to your ownership. The home must be for the borrowers or the family's primary residence. So if you were borrowing it, you have to live in this property. So you can't be for rentals, you can't do the 30 year amortization for anything other than your primary residence. Now, if you wanna calculate what the insurance cost could be for you, if you're gonna do a 30 year amortization, I actually have a link in the description that you can go to, you can add in your numbers and you can see what that cost is gonna be so you can make some decisions. So one mortgage change that kind of has snuck up on us that I didn't realize was a thing, I don't know how I didn't catch it, but on January 15th in 2025, there is gonna be an availability for mortgage refinancing for secondary suites. So here's how it works. Homeowners can refinance up to 90% loan to value, so LTV, which typically is only 80%, but they're doing this so that you can have more cash to build these suites. So what I mean by loan to value is if your home is worth a million dollars, usually you'd only be able to borrow or refinance your home up to 80%, which would be 800,000. In this case, it'd be 90%, which is 900,000. So you're able to pull an extra $100,000 out because then you're able to do some suites. So the maximum amortization you can do on these ones is actually 30 years, and it allows you up to four units on the property. So we all know that the zoning in Calgary has changed from single family to the new zoning that came into effect in 2024. And so this is something that, again, the government has put in place to increase housing in our country. Good or bad, that is what is happening. So suites must be long-term rental units. So there's no short-term, no Airbnb uses, and units must be self-contained. So private entrances, kitchens, bathrooms, all that good stuff. So if that is something that you're considering doing, you may wanna talk to your lender to see if this is something that is available to you because you might be able to get extra cash out of your property, refinance your property, and build those suites that you're hoping to do so. So remember, go download the PDF guide in the description, and if you want more stats or more videos, you can go up here and we'll see you in those. Have a great week.