What’s Hot and What’s Not for Calgary's Spring Real Estate Market?

What’s Hot and What’s Not for Calgary's Spring Real Estate Market?

With lending rates set to rise and low inventory in most segments of Calgary’s resale housing market, it is a veritable Wild West out there.

Multiple offers, bidding wars, houses selling the same day they’re listed – I haven’t seen this kind of market since 2007.

However, as with any market, there are some areas that are out-performing others. Here is my take on the good, the bad, and the ugly for spring 2022.

HOT: Moving up in the detached segment

As the latest data from the Calgary Real Estate Board shows, the recent boost in detached listings was immediately swallowed up by eager buyers. 

The current inventory rates rose slightly in February, but months of supply remain below one month. As a result, the February benchmark price rose to $596,400 – that’s $90,000 higher than February 2021. We are firmly entrenched in sellers’ market territory here and while anything in the $400,000-$600,000 is quickly flying off the market, the North, South, and South East districts are lighting it up with 20 per cent year-over-year price gains.

If you own a detached home and you’re looking to move up in the same segment, this is the kind market where you need to buy your next home BEFORE you sell your current one. Yes, this may feel like a risk or counterintuitive, but you don’t want to end up with a quick sale of your current home and nowhere to go as the clock runs out on your closing date.

The other thing remember is that you are buying in the same market as you are selling, so while you will pay more for a home in a sellers’ market, you will also get more for your current house. Don’t think of it as a total wash, though, because you’re still going to enjoy that bigger, better property you’ve been dreaming about.

NOT: Waiting for the spring market to list

My dad used to say the best day to plant an oak tree was yesterday and the same goes for listing your home. Waiting for the spring market to start brings more inventory, more competition, and maybe even lower prices, especially if we see more rate hikes aimed at cooling the resale housing market.

As a seller, you want less competition out there to increase your chances of getting multiple offers and selling over list price. 

However, there is an art to setting a price point and properly presenting a home to incite a bidding war. Your best bet is to make sure to hire an experienced realtor that knows exactly how to market your home and take advantage of these conditions.

HOT: Locking in lending rates

Bank of Canada has finally raised rates, and mortgage rates have followed: fixed five-year rates with non-big-bank lenders have hit the 2.59 to 2.99 per cent range; and big bank lenders are already sitting in the 3.12 to 3.34 per cent range for Calgary and area. All signs point to more gradual rate increases this year, hovering in around the 3.5 per cent range. 

So, before you start looking, talk to at least three lenders (bank and/or mortgage specialists) and see who can get you the best rate. Then get that rate locked and loaded before you start your home-buying journey.

NOT: Private sales in a hot market

When a market runs hot like this, people are tempted to just throw their house on Kijiji and see what happens. They think, “Why should I pay a real estate agent when I can just sell it myself?”

If you want to have multiple offers, you need as many eyeballs on your listing as possible. Like it or not, the MLS® System is still the number one resale housing marketing tool in Canada. Placing your listing on the MLS® ensures maximum exposure and greatly increases your chance of getting multiple offers and a higher final sale price for your property. 

Another factor to consider is whether you are prepared and knowledgeable enough to handle a multiple offer situation. Do you understand all your legal obligations in a bidding war? Do you know what kind of paperwork needs to be prepared, signed, and filed to legally complete a sale? Not knowing what to do could cost you a lot more than a realtor’s commission.

When it comes to finding representation, be selective. This is not the kind of market where you hire your newly licensed Cousin Larry to sell your house. Instead, interview at least three real estate agents and ask them to give you a no-obligation home evaluation. 

Make sure to find someone who understands the market and, at the very least, has earned experience in a multiple offer situation. Ultimately, you need to find someone who will protect your interests now and in the long run.

HOT: Semi-detached and row-style properties

With so much competition in the detached segment, many buyers are looking at alternative property types, like duplexes (semi-detached) and row-style (townhouses).

The benchmark price for row-style properties rose to $321,100 in February, which is a very affordable entry point, but this is also driving lots of buyers to this segment. February also saw months if supply drop to one month for the first time since 2007. If you can afford it to push your budget a bit more, there are some really nice townhouse options between $350,000-$425,000. 

As for semi-detached properties, February saw the benchmark price rise to $461,400 and month of supply drop to just one month. Again, if you’re getting priced out of the detached segment, this is a great way to get into a property before mortgage rates increase. However, this segment is also in sellers’ territory so be prepared to out-compete other potential buyers.

One thing to also consider is when purchasing these kinds of properties is whether they are condominium. Lots of people think of condos as apartment style only, but duplexes and townhouses can also have condo boards and the fees that come with them.

Besides the fees changing affordability, you should also think about lifestyle: do you mind paying monthly fees to take care of common areas and maintenance, or would you rather deal with everything on your own?

NOT: Apartment condos, especially downtown

Not all parts of a hot market run hot; just take the apartment condo segment. Although February saw a surge in sales and the benchmark price rose to $257,500, we’re still not seeing total price recovery in this segment the prices remaining over 14 per cent below record highs.

However, supply and prices can vary district by district. Marketing a resale apartment condo in the City Centre district where there is tonnes of new inventory would present a real challenge as a seller. Meanwhile pockets of the North, North East, South, and South East districts have more momentum with less choice for buyers wanting to purchase in those areas.

As a buyer, always try to think long term. If you have $400,000, yes, you could buy a really nice condo, but you’ll also have to pay those extra condo fees. By securing a slightly larger mortgage, you could get into a semi-detached product which may be a better long-term investment depending on your lifestyle needs (i.e., kids, green space, commute, amenities, maintenance, etc.) 

Final thoughts on spring 2022

 Whether you’re looking to buy, sell or move up this spring, make sure you make an informed decision based on real-time data and earned market experience. Find someone who knows how to present your house properly and who will protect your interests on either end of a deal.

As always, if you’d like to talk shop about the market or get a free home evaluation, I’m happy to connect.

Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.