‘Wicked low’ inventory to fuel hot spring real estate market
Calgary’s resale real estate market, already marked by high buyer demand amid dwindling supply, is likely to get a lot hotter now that the busy spring season has arrived.
Traditionally, the busiest time of the year for real estate, the spring market began March 1 and will end June 30. And it could very well be among the busiest in Calgary’s history given already strong demand in January and February in the face of very low supply, realtors note.
“It feels like the spring market has come early,” says Trung Bien, realtor with exp Realty.
“Wicked low” inventory, along with buyers — many of whom held off last year — now eager to transact this spring are fuel for already tinder-dry market conditions set by a strong start to the year, he adds. Calgary Real Estate Board statistics show sales grew 23 per cent in February year over year, while new listings only increased 14 per cent.
At the current pace, the supply of homes for sale can only sustain about one month of sales.
Already last month, the benchmark price for a home climbed 10 per cent to $585,000 year over year, marking yet another consecutive month of record highs.
Prices are likely to continue their ascent this spring season with more buyers and sellers entering the market, based on findings of a recent study from Zoocasa.
It examined spring market activity across Canada for the last five years, uncovering that 2019’s peak for activity nationally occurred in May. In 2020, the apex of sales actually happened in July due to the pandemic, which mostly froze sales activity in April and May.
Over the past two years, however, spring markets for most Canadian cities peaked in April, the study found.
Calgary was among a handful of outliers last year with activity peaking in May.
Bien notes the peak of activity that realtors, however, see can vary.
“June is usually the best month of the year for our office,” he says.
This June could indeed see peak sales activity, too, if the Bank of Canada announces, as expected, the first in a series of interest rate cuts.
“If interest rates go down, the theory goes, we’ll see much more demand and still not enough supply with prices going even higher.”
Already, Calgary buyers are more confident about the market, says Jesse Davies, realtor with Elevate Real Estate at Century 21.
“That’s partly because fixed mortgage rates have dropped recently.”
Average discounted rates have fallen more than 50 basis points from their high point last fall. That’s helped spark activity across the nation, Canadian Real Estate Association data shows.
In Calgary, sales have also rebounded after dropping off at the end of 2023, Davies says.
“In November and December, new listings were outpacing sales, but as soon as we hit January, the pendulum swung back to where sales outpace listings.”
What’s more, the recent surge in condominium sales points to an increasingly busy market this spring. Condominium apartment sales are up 39 per cent year to date from last year, the highest growth among all segments.
“That’s often the last housing type to pop” in a strong market, Davies adds.
With apartments seeing much more activity and price growth, up 17 per cent year over year to nearly $330,000 in February, the overall market is likely to see more activity this spring as condo sellers become move-up buyers, Davies says.
“And that gives all move-up buyers in general much more certainty to jump into the market.”