Selling a property in Metro Calgary has been pretty challenging ever since 2014 when the price of a barrel of oil dropped. Many homeowners hung on, waiting for resource prices to pick-up — and for a while, it appeared that the province’s economy was picking up. Oil prices started to rise, workers came back to the resource industry and sellers were starting to list and sell their homes again. Then the last slate of mortgage and housing regulations hit — the most recent and biggest was the new mortgage stress test that went into effect on January 1, 2018. Since then, Calgary sellers have had a very tough time.
According to the latest housing statistics report from the Calgary Real Estate Board, the city’s total sales activity was a mere 1,272 units in September — a 13% decrease from September 2017. While all housing types were affected, detached units suffered the most, reporting the biggest decreases year-over-year, but even condo and townhouses aren’t coming out unscathed.
The biggest problem: Calgary’s economy. As Ann-Marie Luri, CREB’s Chief Economist, explained in her recent monthly report, the city “continues to struggle with unemployment, which rose again last month to over 8%. Concerns in the employment market, higher lending rates and shaken confidence are weighing on housing demand.”
This slow activity and persistent price declines offer a silver lining to buyers. Even with the new mortgage stress test and rising mortgage rates, prices for single-family homes in Metro Calgary are still amazingly affordable — as long as you have secure employment.
Here’s an overall snapshot of the current Metro Calgary housing market for both single-family homes as well as condos and townhouses:
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Key takeaway: Every property type is on sale in Calgary
When markets to a balanced market, both buyers and sellers must be ready to proceed but can continue with their due diligence — like getting a proper home inspection — without fear of missing out. Things change even more in a buyer’s market. With the upper hand, buyers can now take time to really shop around and comparison shop, before settling on a few options and then proceeding with their due diligence. For a few good bets, consider the following (ranked based on the market absorption ratio or sales-to-listings ratio):
5 Top Areas in Metro Calgary that Favour Single-Family Home Buyers
- City Centre (such as: Crescent Heights, Mount Pleasant, Tuxedo Park, Highland Park, Renfrew, Inglewood, Highfield, Windsor Park, Altadore, Sunalta, Killarney, Parkland, et. al)
- West (such as: Patterson, Wildwood, Glendale, Glamorgan, Signal Hill, Discovery Ridge, Aspen Wood, Cougar Ridge, et. al)
- East (such as: Dover, Forest Lawn, Penbrooke Meadows, Erin Woods, Foothills, Great Plains, et. al)
- North East (such as: Temple, Pineridge, Marlborough Park, Monterey Park, Saddle Ridge, et. al)
- South East (such as: Ogden, Riverbend, South Foothills, DouglasdaleGlen, et. al)
5 Top Areas in Metro Calgary that Favour Condo & Townhouse Buyers
- North East (such as: Skyline East, Vista Heights, Mayland Heights, Mayland, Rundle, et. al)
- West (such as: Glenbrook, Rosscarrock, Spruce Cliff, West Springs, Coach Hill, et. al)
- City Centre (such as: Eau Claire, Upper Mount Royal, Beltline Ramsay, Erlton, Mission, Rossboro, Sunnyside, et. al)
- North (such as: Hidden Valley, Sandstone Valley, Huntington Hills, Thorncliffe, et. al)
- North West (such as: Tuscany, Silver Springs, Ranchlands, Arbour Lake, Citadel, Edgemont, et. al)
What should seller’s expect?
It doesn’t look good for sellers. There are no areas currently in a seller’s market and only two area — North and South — that are in a balanced market, but only for single-family homes. As a result, there are no “top areas” that favour sellers.
The one good thing is this isn’t the first time Metro Calgary sellers have been faced with unfavourable conditions. For those that don’t have to sell — don’t. Those that do have to sell, expect to get less and wait longer for the right buyer. Still, that doesn’t mean buyers are snapping up bargains at fire-sale prices — it just means sellers need to really appreciate the amount of work it will take to sell their home.
Why use active listings versus new listings?
We examined the Metro Calgary market for single-family homes and for condos and townhouses using the sales-to-active listings ratio and not the sales-to-new-listings (SNLR) ratio. This means we compare demand — all homes sold within a given period of time — with current supply, which is all the homes available for sale within a given period of time. It also means we don’t omit stale listings — homes that we listed over 30 days ago and are still available for sale.
The sales-to-active listing ratio gives a more realistic and comprehensive view of supply and demand for a particular region over a specified period of time — commonly referred to as the market absorption rate. It’s also why the sales-to-active-listings ratio is also known as the Market Absorption Rate.
Expressed as a percentage, the sales-to-active ratio (or MAR – Market Absorption Rate) is calculated by taking the total number of sales at the end of a given time period (in this case, a calendar month) and dividing it by the total number of active listings available during the same time period. The higher the ratio, the more demand for the property and the more opportunity a seller will have to attract a higher price for their home for sale. A lower ratio indicates slower sales and the potential for falling house prices. A balanced market is when the supply of housing meets the demand from potential buyers. In a balanced market, sellers usually accept reasonable, close-to-list-price offers; homes typically stay on the market for close to the average number of days and prices remain fairly stable within the region.
According to the Calgary Real Estate Board (CREB), 0 to 2 ½ months of supply (the amount of time it would take to sell all available inventory for a given period of time) puts a region in a seller’s market. Inventory that will last more than 4 ½ months is a region considered to be in a buyer’s market. Any region with inventory between 2 ½ to 4 ½ months of inventory is considered to be in a balanced market.