The Greater Calgary Area's Real Estate market is seeming to buck the trends that are being regularly talked about in media across the country. As of December’s recent statistics, there were
2023 Outlook - Greater Calgary Real Estate Market
Dated: January 4 2023
The Greater Calgary Area's Real Estate market is seeming to buck the trends that are being regularly talked about in media across the country. As of December’s recent statistics, there were only 2,214 units available for sale in Calgary, making it the lowest level of inventory reported for December in over a Decade. Looking at the fundamentals of supply and demand, It’s no secret that low inventory levels of homes for sale can have a big impact on the demands within a particular market.
But one might ask, “just because the inventory levels are low doesn’t necessarily mean demand is high, right?”
Technically speaking if there is a product that is undersupplied, but there are still people wanting to purchase it then prices should climb. Fewer items available for purchase means the ones available become more coveted. However, over the last few months, we have seen some cooling of the market as a result of the increased interest rates. People are not wanting to buy as they feel the cost of homeownership is too high with the current rates. So we have seen what we call in the Real Estate world a “Balanced Market”. Demand and Supply are not pushing each other in any one direction which leads prices to stabilize. However, I don’t think that is going to stand as our story for 2023.
In 2022, Alberta has seen a net population increase of 1.28% in Alberta this year, which is an increase of over 58,000 new Albertans. This means that even with standard population demands on housing, we are heading into 2023 with a deficit of housing. New properties being built are sold almost as quickly as they are constructed, and rent is increasing due to the same supply and demand factors.
So where does that put the current homeowner for 2023? Well, if you are in a home and are wanting to make a change, the first quarter of 2023 may be the best time to start looking. As a result of the feverish buying cycle at the beginning of 2022, home prices are roughly 14% higher in December than they were in 2021, even with the most recent price corrections. So if you have been in your home for longer than a year, you will likely see an increase in your home value. Once on the market, homes in the lower to the mid-price range are seeing quicker sales as buyers are less likely to take on sizeable mortgages. This applies to all aspects of the market, including detached, semi-detached, row-style (townhouse), and apartment condominium dwellings. This also means that due to the decreased demand in the $700k and above homes, we are seeing those properties have downward pressure on their prices. So you could potentially gain value on either end of the deal!
Now, how about the first-time home buyer? Well, that can be an entirely separate article on its own with all of the new incentives put in place by the federal government. However, the competition out there for lower-priced homes is still pretty strong. Having a realistic budget, and a strategy for finding a home will benefit you, but you will likely see properties on the market for less time than in pre-pandemic years, as we have seen demand continue to stay strong in these areas. Take your time and find out exactly what you are looking for, but when you are ready to take action and start actively wanting to purchase a home you need to be agile and ready to strike once you have found a property within your budget that meets your needs. There may be others lined up to wait to purchase (unless you are at that higher price point as discussed above).
So does 2023 look as bleak as our news is saying, in my opinion, it’s yes and no. Yes, we are going to see some continued pressures from the Central Bank of Canada and their interest increases, and yes we may see an economic recession put downward pressure on society as a whole. However, with the current economic conditions in Alberta, we are seeing more migration and an increase in new industries that may help weather certain market conditions affecting other parts of the world. And if that prediction is correct, which I am no economist so take it with a grain of salt, we will see another stellar year for selling homes in Calgary and prices will either stay stable or increase throughout 2023.
If you want to know more about the buying or selling process, please reach out to me today and I will send you the White Acre Realty - Confidence System for buying or Selling a home. This tool is designed to help answer most of the questions regarding each stage of the market and can be utilized as a guideline to help decide in 2023
Michael Whittaker’s success in real estate stems from his core belief that hard work, integrity, and superior customer service will build a lasting impression on everyone he interacts with. With....