Just like that, another year in the books! Everyone might feel like they are a little worse for wear, however, there were some winners out there. Move up home buyers enjoyed a great market where they could take advantage of stable entry level prices and get a deal on their new home. First time home buyers that have been waiting on the fence managed to get some good deals on their new home as well. Even most sellers had enough equity in their home (from the latest boom 2012-2014) to insulate themselves from having to take a loss. Overall it was a great year! There were segments that showed characteristics of being balanced, even though the sentiment in the market was less than exemplary. Looking forward to 2017, there seems to be cautious optimism. Although the regime change south of the border was expected to have a negative impact, so far it has been positive. The amenability to pipelines has given Alberta reason to smile for the first time in a couple years. While the labour market is not expected to improve much through 2017 and immigration staying somewhat neutral, there is expectation that prices will stabilize. Supply in all segments (detached, attached & apartment) is expected to stay thin except in the condo apartment segment. Unemployment topped 10% which is as high as we’ve seen it since the early 80’s. As fast as people flocked to Calgary for work a few short years ago, many people are leaving or have left. Net migration was negative 6,100 people which is a far cry from the average of +14,000 per year over the last decade. This definitely affected demand not only in the housing market, but the rental market as well. Rental rates have dropped 12% and vacancy rates sit at 7%. Landlords have been really creative to attract tenants with month(s) of free rent or reduced damage deposits. Surprisingly, the Calgary real estate market has fared well through all this. Detached homes have dropped in price 4.7% since October 2014 when the recession hit Alberta. Most of that drop was experienced in the luxury market ($850,000 & up) as most of the job loss was with higher end professionals. As prices corrected in this market segment, those still gainfully employed feasted and took advantage of the significant price drops. Inventory levels for the detached segment kept low (down 20% from last year) while sales were only off by 2.7% compared to 2015. This helped to keep prices relatively stable through last year. We saw the biggest price adjustments in the Southeast part of the city (6.9% year / year) while the West side maintained steady prices for most of 2016. Condo apartments are still battling supply issues. With the new mortgage rules in place and buyers purchasing power substantially affected, this market will be the new darling for first time home buyers. There is great selection all over the city and prices have come down 11.3% since October 2014. While the drop may seem substantial, Calgary had experienced a 15% increase in property value from 2012-2014. There is still apprehension from buyers though as they wait to see where that segment settles out. The South & East districts maintain the most product with over 10 months supply while the North district saw an increase of 1.32% from last month. Average days on market for sold properties is 71 days so if you are thinking of listing, make sure you allocate a decent amount of time to get it sold. Attached product in Calgary has been a tale of two tapes. The semi detached segment looks great! Sales were up 4% compared to 2015 while prices are only down 2% from this time last year. Both the City Center & West side held prices throughout the year while the Southeast experienced some of the steepest price decreases. The West side has over 12 months supply which would lead you to believe that prices would be coming down, but looks like sellers in the area are holding the line. Row housing comes in with a different story. Sales were off by 12% YTD and while inventory levels were lower than this time last year, prices took a hit to the tune of 5.3% year over year. There are higher inventory counts in the North & East while the City Centre, South & Southeast districts have seen the least price decreases (3-4%). A note about the Southeast district – sales are up over the 10 year average so product is moving. Most of the satellites of Calgary usually follow suit with what’s happening in Calgary (albeit 6 months behind). Airdrie saw a decent spurt in population growth through 2016 as buyers found better deals outside the city. Prices only dropped 2.9% year over year and although sales activity was down 6.2%, it was still above long term averages. Cochrane’s prices dropped 3.8% year over year. Sales shifted to more affordable housing as $300,000-$400,000 homes were selling fairly quickly, while higher priced product stuck around. Inventory levels remained high though (37% above the 5 year average). Most of this was in the attached segment. Chestermere has always been a desireable place to live outside of Calgary. Prices only dropped 2.5% through 2016, however, inventory levels are slowly started to creep up putting downward pressure on prices. Okotoks fared well through all of this. Prices stayed flat through 2016 and sales were only down 5%. All these towns are viable options for sellers as property value is about $40,000-$70,000 cheaper than in the city. Buyers are more carefully weighing their options as their purchasing power was reduced. Here is CREB’s 2017 Forecast for a glimpse in to the future.
For a more in depth look at the stats click the links – Calgary or Calgary Region
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