CREB Now March 2022 Market Update: Record high sales seen again in March
For the second month in a row, sales activity not only reached a monthly high but also hit new record highs for any given month. Gains occurred across every property type as they all hit new record highs.
An increase in new listings this month helped support the growth in sales activity. However, inventories have remained relatively low, ensuring the market continues to favour the seller.
“While supply levels have improved from levels seen over the past four months, inventory levels are still well below what we traditionally see in March, thanks to stronger than expected sales activity,” said CREB® Chief Economist Ann-Marie Lurie. “With just over one month of supply in the market, the persistently tight market conditions continue to place significant upward pressure on prices.”
With an unadjusted benchmark price of $518,600 this month, the monthly gain increased by another four per cent. After three consecutive gains, prices have risen by nearly $55,000 since December and currently sit nearly 18 per cent higher than last year’s levels.
Despite the strong start to the year, price gains and rising lending rates are expected to weigh on demand in the second half of this year. Nonetheless, persistently tight conditions will likely continue to impact the market over the next several months.
Sales continued to surge in March reaching record highs, thanks to a boost in new listings. Year-over-year sales growth occurred in every district of the city except the City Centre. The pullback in the City Centre is likely related to the significant drop in new listings, providing less choice for potential buyers.
The months of supply for detached homes has been below one month since December. The exceptionally tight conditions have had a significant impact on home prices. The benchmark price for detached properties rose to $620,500 in March, which is over $73,000 higher than December levels and 20 per cent higher than levels recorded last year. Gains in prices have also caused a significant shift in the distribution of homes, where over 57 per cent of the available supply is priced over $600,000.
Semi-detached sales posted another record month of sales and year-to-date sales are over 43 per cent higher than last year. Improvements in new listings helped support some of the growth in sales but did little to improve the inventory situation.
Inventory levels remain relatively low, causing the months of supply to remain nearly 70 per cent lower than long term trends for this time of year. Tight conditions caused prices to trend up again this month, for an unadjusted monthly gain of nearly four per cent. Prices trended up across all districts and are 16 per cent higher than last March. Year-over-year price gains have ranged from a low of nine per cent in the City Centre to a high of nearly 22 per cent in the North district.
Row sales reached an all-time record high this month, contributing to year-to-date sales of 1,550 units, which is a 96 per cent increase over last year. An increase in new listings helped support the strong sales. However, inventory levels have been steadily declining compared to the previous year and are at the lowest March levels seen compared to the past seven years. Strong sales this month combined with the lower inventory levels saw the months of supply push below one month.
The persistently tight conditions have placed significant upward pressure on prices. In March, the benchmark price reached $335,400, which is over four per cent higher than last month and nearly 17 per cent higher than last year. While strong gains have occurred across all districts of the city, the North East, North West, South and East districts have not yet recorded full price recovery from their previous highs.
Apartment sales continued to surge in March, contributing to the best start of the year on record. The sudden shift in demand could be related to less supply choice in lower price ranges for other property types, causing many to turn to the condominium market. The rise in sales has outpaced the growth in new listings, causing inventories to ease compared to last year and the months of supply to drop to the lowest recorded since 2007.
After several months of tight conditions, we are seeing upward pressure on prices. In March, the benchmark price rose to $265,900 – nearly three per cent higher than last month and six per cent higher than last year. The recent gain in price has helped support some price recovery in this sector, but prices remain over 11 per cent below previous highs.
REGIONAL MARKET FACTS
For the second month in row, new listings in Airdrie reached a record high for the month. This helped support further sales growth in the city. The sales to new listings ratio has eased to 75 per cent, providing some opportunity to see inventory levels improve relative to figures recorded over the previous five months. However, inventory levels remain exceptionally low relative to sales, keeping the months of supply below one month.
There has been less than one month of supply in this market since November of last year. The exceptionally tight conditions have caused significant gains in prices. In March, the benchmark price rose to $473,400, nearly 10 per cent higher than last month and 30 per cent higher than last year. The highest gains occurred for both detached and semi-detached homes.
Sales this month reached new record highs and are more than double the levels traditionally seen in March. Like most markets, Cochrane has struggled with strong demand relative to the supply. Inventory levels did edge up over last month but with only 86 units available, it is still among the lowest levels of March inventory recorded for the town. It was also the fifth consecutive month that the months of supply remained below one month.
The persistently tight market conditions resulted in further price gains. In March, the benchmark price reached $520,000, which is nearly six per cent higher than last month and 23 per cent higher than last year’s levels.
Like Airdrie and Calgary, sales in Okotoks reached a new all-time record high this March. Improving sales were possible thanks to a gain in new listings. The increase in new listings this month also helped support some modest gains in inventory levels compared to what has been available in the market over the past seven months. However, with only 99 units available and 113 sales, the months of supply still remains exceptionally tight at under one month.
Persistently tight market conditions have caused persistent upward pressure on prices. After five months of consecutive gains, the benchmark price in March reached $534,200, nearly 13 per cent higher than last year.
Click here to view the full City of Calgary monthly stats package.
Click here to view the full Calgary region monthly stats package.
Pete and Katelyn’s Market Update:
Katelyn: So Pete, how’s the market doing? Is it loosening up at all? Or, what’s going on?
Pete: Well you could think, you know, because we actually have about 23 and a half percent more listings, new listings come on than we did last year at this time, which is a pretty darn good amount of new listings. In fact, We have almost 5,500 more listings come onto the market in March that we did a March of last year.
So you think, right? You think if you were a buyer, you’d have more options and you don’t, you have less. Yeah. So in terms of sales, we sold 4,107 homes just in marching Calgary. That’s a record.
Katelyn: That’s a record that is a 41 and a half percent increase.
Pete: Yeah. So what that means is even though, like I mentioned the number of listings coming onto the market is way up, it’s about 23 and a half percent when you’re seeing a 40% or more increase in sales demand is still outpacing supply.
So it almost like it didn’t even really help. In fact, what does inventory done since March last year?
Katelyn: Inventory has actually been down 19 and a half percent.
Pete: March over March. So even though we had a 23% increase, 2300% increase in new listings, inventory is still down 20% from last year in March. So what that leaves us with is a one month supply.
Katelyn: One month supply. So that is a decrease of 43.1 percent.
Pete: And that’s across the whole real estate board. So that’s not just detached homes. That includes the slower markets, like the apartment market and, and what that means that if we stopped listing homes right now that within a month or in a month in a couple of days, We have nothing left to sell.
It would just, it would take us just about a month or just over a month to have nothing left for sale. It’s pretty wild. And that is what’s driving prices up. So when people are seeing our prices started even off, I’d say, no, actually I think they’re accelerating upwards, especially in some markets, which market do you think is seeing the highest price acceleration?
Katelyn: Well, the highest would be the detached market, right now. That is an increase of 20 and a half percent actually.
Pete: Yeah, 20 and a half percent. So what that means is last year, when your house was worth 500,000, if you owned a house last year, thank the Lord above. Cause last year, if your house was worth 500,000, you’re a hundred thousand dollars richer this year, your house is worth over 600,000.
In fact, it’s worth 620,000 is what the average prices. And that’s the yeah, that’s the average. Of a home in Calgary now, $620,000, still nothing like Toronto, nothing like Vancouver, but if we’re going to go up 20% a year over a year, and that that’s only accelerating, who knows what the top could look like.
Katelyn: Yeah exactly. So now when we look at rope prices, so that would be your townhomes. That’s also up an increase of about 16 and a half percent.
Pete: You’re at townhouses are selling for. $300-$335,000 is what the average townhouse in the city is now. And as you remember, if you’ve been watching our videos for a while, townhouses have been struggling.
So an increase of 16%, like I said, it might not be as exciting as a 20% increase in the detached market, but 16 and a half percent is pretty good. Yeah. And I, you know, it’s like, I’ve been saying for a while, you’re going to see the detached market take off. And then eventually the rising tide will lift all ships and you’re seeing the detached market duplexes are basically doing the same thing. Aren’t they about the same amount?
Katelyn: We’re about up 16, 16.3% actually.
Pete: Yeah, so the percentage increase is about the same. The detached market is selling for a little higher cause we’re including some of these half duplexes in the inner city and stuff like that. Some of these ones that are selling for a million. So the average price of a semi detached house is close to 500,000. It’s 478,000. But increasing at 16% year over year, not monthly. By the way we’re still just to remember, we’re going March of this year versus March of last year, the last year.
Katelyn: Exactly. The apartments not as exciting as the rest of the market’s doing, it’s only up by 6%.
Pete: Yeah 6%. So the average price is $265,000 an apartment, but what you gotta be really careful with. I mean, every market segment, you can break down over a geographical area and, you know, age of the home and stuff like that. But I find with apartments in particular, there’s a pretty big variance. Like the apartments downtown are really still, really still struggling.
There is still a, you know, a 30% vacancy in the BeltLine at one time. And I think that started to tighten up a little bit. But it’s, it’s got, you know, there’s going to be some time before you’re starting to see the condo market in the downtown pickup. Additionally, the other way to break up the apartment market is, you know, one bedroom, two bedroom.
And I’ve been saying this for months now is the one-bedroom apartment market is still not going anywhere. It’s still pretty much where it was and during COVID, which, you know, during COVID, it would make sense to not have a one bedroom condo, because it can’t have a roommate. You can barely work from home, there was barely any room, but with 400,000 immigrants coming into this country, Every year now, plus the Ukrainian refugees that we’re welcoming in here. I’m thinking that a as one of our government leaders said recently, it’s a pretty simple IQ test as to whether they’re going to end up, you could, you know, going to Vancouver or the Fraser Valleys, you’re going to be spending three times what you’re going to be spending here.
The same thing goes for Toronto where Southern Ontario. So I think if you’re an immigrant, you’re not going to be living there anymore. You can’t afford it. You’ll be coming to which is turning into the land of opportunity again. And I would think especially Calgary, because while it’s just way better than Edmonton. So there’s that.
Katelyn: Ooh, that’s a diss!
Pete: It’s just reality.
Katelyn: So then when, now, when we’re actually looking at the different regions there was about a 15 to 20% increase in all the regions, but the one that’s actually done substantially well, it’s actually the deep Southeast. So that’s up about 23%.
Pete: Yeah. They’re killing it again.
And they continue to it and that’s been the trend for awhile. So that includes areas like Cranston and Mahogany and, and those areas around there. That area just continues to get better and better and better. As the, as the Seton development, for example, continues to develop and more things are available in the area in terms of shopping and even recreation, that kind of stuff, it’s only going to get better yet. The area of the city, like I mentioned earlier, that is actually suffering is still the City Center. It got gutted during the the oil and gas price meltdown of a couple of years ago. And it still has lots of room to recover before, before that before the vacancies fill up and you start to see prices move up downtown is only up, it’s up less than 7%.
It’s up 6.9% versus March of last year. But. Like I said put your seatbelt on. Downtown’s going to take off. I’ve been saying it for a while. Are they still saying it? Time will tell if I’m right or wrong, but I’m pretty confident that if you want to invest the place to invest would be downtown.
I think that’s, it’s got nowhere to go, but up right now. So that’s our market report for for this. If you want any additional information, just get ahold of Katlyn or get ahold of me. We’d be happy to answer any of your questions because of course, every market segment can be broken down some more.
Two-story and Tuscany might not have the same market conditions as a two-story in forest lawn. So an apartment in Pembroke might not be, you know, the same kind of market as an apartment downtown or apartment on the west side or whatever. So feel free to talk to us about your market. Whether it’s a house or a, or a detached house or apartment or whatever, we’re happy to chat with you and give you some really good market info on some market intel on what’s going on in your particular market.
And otherwise, yeah. Ask us any real estate questions. We’re always happy to answer. You can answer in the comments below, or you can phone or text us any time you can reach us anytime at well, the numbers are at the end of the video, but my number is (403) 818-7310. You got a cell phone?
Katelyn: I do, yeah. (403) 615-2346.
Pete: Yeah. And like I said, our numbers are at the end of the video. Our email should be there as well. So ask us anything we’re happy to, we’re happy to chat real estate anytime. Thanks so much. We’ll see you next time.
Katelyn: Thanks guys.