Real estate in Calgary is finally beginning to thaw, and just in time for spring.
In recent years the Calgary real estate market has been struggling to gain the traction necessary to recover the damages incurred following the 2008 financial crisis.
But if the market data for 2017 so far is any indicator, real estate in Calgary is close to being back on the upswing. While it might be too early to say definitively, the figures show promise for the year ahead.
In this post, we'll discuss the current condition of real estate in Calgary, and what home sellers have to look forward to for the remainder of 2017.
Real Estate in Calgary
Real estate in Calgary has been suffering in recent years.
However, many believe that the downward trend is coming to a close.
It seems that the overall economy is finally beginning to recover from the 2008 financial crisis (more on that later) as more new homes are being built.
Furthermore, the strength and health of the job market have increased in recent years. First and foremost, this means that as people are feeling more secure in their employment, they will be less likely to sell.
In turn, this has changed real estate in Calgary in terms of available inventory. Compared to this same time in 2016, overall inventory levels remain well below last year's levels.
With less available inventory entering the marketplace, it appears that any further inventory gains will be unlikely. Additionally, as the Calgary real estate market begins to climb from its slump, any more reductions in prices is unlikely.
This is good news for sellers. The market has been down in recent years, but the signs are pointing toward continued growth.
In the sections immediately below, we'll detail how each of the three main sectors of real estate in Calgary is performing, and what the respective outlooks are:
The detached market, or single-family residences, has fared far better than the other real estate sectors.
In fact, improvements have been seen within all pricing metrics of the detached market.
This is despite the fact that more new listings have come on the market. Even though new listings have increased, the available inventory and projected supply have continued to decrease.
Owners of semi-attached and row homes aren't as fortunate as their detached counterparts.
Though, the news isn't all bad. However, new listings are being added more quickly than these properties are being purchased.
But despite the increased levels of supply in this sector, prices are continuing to climb, albeit gradually.
Regardless of the slight price increases, though, the levels of new inventory being added to the market are slowing this sector's recovery (especially when compared to the detached sector).
While the detached and semi-attached sectors are witnessing growth, the apartment and condominium sectors are feeling the pinch from oversupply.
The listings of condominiums, for example, has continued to expand despite the current levels of supply surplus. That is, there are too many units on the market and not nearly enough sales.
Due to this, prices have reacted accordingly. Pricing of these units is beginning to decrease to accommodate the increased levels of supply and are now well below the pricing peaks seen just over two years ago.
Recovering from the 2008 Recession
It's been almost a decade since the 2008 financial crisis swept across the housing markets. And finally, it seems as if the ebb is beginning to flow again.
More people are feeling confident in the workforce, and are thus less likely to sell their properties.
However, the economic recovery continues to proceed slowly.
But, there's lots the Alberta economy has to look forward to as oil prices recover from the collapse seen just a couple years ago.
With improved oil prices and the reconstruction of Fort McMurray, more jobs will be brought into the province. Additionally, the Trump administration's green light of the Keystone XL pipeline should also provide a boon to the area's economic growth.
The overall economic health of the region seems to be recovering, if not improving. However, the positive effects of these improvements might take time to be realized, especially for the housing market. This indicates that the full recovery of real estate in Calgary will likely be extended.
An interesting trend helping drive the growth in Calgary's housing market is the arrival of foreign investors.
CTV News Calgary reports that many buyers are coming from overseas. Open houses are hosting potential buyers from across the globe, including Asian Pacific nations, as well as from the Middle East.
Even though there are more foreign buyers entering the Calgary housing market, many Calgary residents aren't passing up on a good deal.
Prices are more attractive than they have been in recent years, and many residents are trying to take advantage of the current market climate.
The good deals might not last long, though, as the housing market in Calgary continues to improve alongside the overall economy.
Although there is no one solid predictor of future market health, 2017 has already been showing promise for the coming months.
As the year progresses, the correlation between sales figures and the amount of available inventory will become the barometer for which market prices are measured.
These figures are already showing signs of improvement. In April sales increased and the available inventory was below the figures for the preceding months.
With sales increasing and inventory levels decreasing, the months of supply that were available in previous years are being scaled back to more manageable levels.
Although these sales and inventory figures vary with specific location, as well as property type, market conditions are becoming more balanced. As such, real estate in Calgary should begin to see its prices stabilize overall in the year ahead.
The 2008 financial crisis may have done a number on real estate in Calgary, but the worst seems to be over.
Although the markets haven't fully recovered, the current pricing makes it an attractive time to buy a detached property. And if you're a seller, perhaps it might be best to see what else 2017 has in store as the prices continue to climb.