Calgary Real Estate Market Thrives in October 2023: A Deep Dive into Sales, Prices, and Affordability Trends

The Calgary real estate market continued its robust performance in October 2023, defying expectations with some of the highest sales levels recorded for the month. According to the Calgary Real Estate Board (CREB), a remarkable 2,171 transactions were completed, marking a significant 17 percent increase compared to the same period last year. This surge in sales is particularly notable given the prevailing economic climate, characterized by elevated interest rates and ongoing inflationary pressures. A key driver behind this buoyant activity, especially evident in the substantial uptick in condominium sales, is the persistent quest for more affordable housing options among buyers navigating a challenging financial landscape.

Despite this strong demand, the market saw a modest improvement in new listings last month. With 2,684 units entering the market, October experienced the highest levels of new listings since 2015. However, this figure still represents a substantial deficit, remaining over 40 percent below typical October levels. The strong sales volume quickly absorbed much of this new supply, indicating that while there was an increase in available properties, it was not enough to significantly shift the tight market conditions.

Ann-Marie Lurie, CREB’s chief economist, emphasized the ongoing supply challenges facing the Calgary housing market. “Despite some recent improvements in new listings, supply levels remain challenging in our market,” Lurie noted. “It will take some time to see a shift toward more balanced conditions and ultimately more price stability.” This statement underscores the underlying pressure on housing inventory, a critical factor influencing both buyer behavior and price trajectories across the city.

Consequently, Calgary continues to experience upward pressure on home prices. October’s unadjusted benchmark price reached an impressive $571,600, representing a nearly 10 percent increase year-over-year. This consistent appreciation highlights the strong demand and limited supply dynamics at play, making Calgary one of Canada’s most compelling real estate markets.

Source: CREB

Understanding Calgary’s Market Dynamics: The Impact of Supply and Demand

The consistent growth in Calgary’s real estate market can largely be attributed to a fundamental imbalance between supply and demand. While new listings have seen some improvement, the overall inventory remains significantly below historical averages. This scarcity of available homes, coupled with a robust influx of inter-provincial migration and a strong local economy, fuels intense competition among buyers. The consequence is not only rapidly rising prices but also shorter market times for properties, as homes are snatched up quickly once they become available. Buyers are increasingly making swift decisions, often foregoing extended negotiation periods, in a bid to secure properties in a market where opportunities can be fleeting. This environment makes it crucial for prospective buyers to be well-prepared and for sellers to understand the true value of their assets.

Furthermore, the high interest rate environment, while designed to cool inflation, has inadvertently amplified demand for more affordable housing segments. Many potential buyers, who might have otherwise considered higher-priced detached or semi-detached homes, are now shifting their focus towards condominiums and townhouses to manage their mortgage payments. This affordability-driven migration across property types creates a ripple effect, intensifying competition even in previously less competitive segments and thereby pushing up prices across the board, particularly in the entry-level market.

Detailed Property Type Analysis: October 2023 Performance

Detached Homes: Persistent Scarcity Drives Price Growth

The detached home sector in Calgary saw improved new listings and sales figures compared to last October, yet it continues to grapple with record-low inventory levels. With 1,302 new listings and 976 sales, the market remains exceptionally tight. This scarcity is a dominant theme, as the inventory of detached homes reached its lowest point for an October month on record. The tight conditions are particularly pronounced in the more accessible price brackets, where demand far outstrips supply.

However, the dynamics slightly ease for homes priced above $1 million, where the months-of-supply ratio rose to 4.3 months. This indicates that while the luxury segment is still active, it offers a comparatively less frenzied environment than the broader detached market. The term “months-of-supply” is a crucial indicator, representing how long it would take to sell all current inventory at the current rate of sales if no new listings came onto the market. A lower number signifies a seller’s market, and while 4.3 months is still below a balanced market (typically 4-6 months), it offers more breathing room than lower-priced segments.

The unadjusted benchmark price for detached homes in Calgary climbed to $697,600 as of October. This figure not only represents a modest increase from September but also a significant 12 percent jump compared to October 2022. This robust price appreciation underscores the enduring appeal and strong demand for single-family homes in Calgary, despite the affordability challenges faced by many buyers.

Semi-Detached Homes: Competitive Conditions Fuel Double-Digit Price Gains

Semi-detached properties in Calgary also experienced a notable increase in new listings year-over-year. Despite this, the market remained fiercely competitive, with the sales to new listings ratio staying remarkably high at 76 percent. This means that for every 100 new semi-detached homes listed, 76 were sold within the month, highlighting intense buyer activity. With 235 new listings and 179 sales, the supply was quickly absorbed.

The inventory of semi-detached properties currently sits at approximately half of what is typically observed in October, reaching levels not seen since October 2005. This historical low emphasizes the chronic shortage of these popular housing types. Semi-detached homes offer a compelling alternative for buyers seeking more space than a condominium but at a more accessible price point than many detached homes, making them highly desirable in the current market.

As a direct consequence of these consistently tight conditions, prices for semi-detached homes have surged. The October unadjusted benchmark price hit $628,700, marking an impressive year-over-year increase of 13 percent. This significant price growth is a clear indicator of the high demand and limited availability that define this segment of the Calgary real estate market.

Apartment Condominiums: The Affordable Frontrunner with Record Sales

The apartment condominium sector was arguably the most dynamic segment in October, propelled by substantial boosts in new listings, which in turn facilitated record-high sales. Despite a significant influx of 727 new listings, the sales to new listings ratio remained exceptionally high at 88 percent, with 641 sales. This indicates that even with more options becoming available, buyer demand for condos is insatiable, quickly absorbing any new supply.

Inventories of apartment condominiums, paradoxically, went down, particularly for units priced at $300,000 or less. This affordable price bracket now constitutes only 38 percent of the total condo inventory, a significant drop from 53 percent last year. This trend vividly illustrates the shift in buyer preferences towards more budget-friendly options, as high interest rates continue to stretch purchasing power.

The attractiveness of condominiums as an entry point for first-time homebuyers, or as a downsizing option for empty nesters, has never been stronger. They offer a viable path to homeownership in a market where detached and semi-detached properties are becoming increasingly out of reach for a growing segment of the population. This sustained demand at the lower price points is rapidly depleting affordable inventory and driving prices upward.

October’s unadjusted benchmark price for apartment condominiums reached $316,600. This represents a healthy monthly boost of over 1 percent and an outstanding year-over-year increase of 16 percent, making it the fastest-appreciating property type in Calgary. This growth trajectory is expected to continue as long as affordability remains a primary concern for Calgary homebuyers.

Navigating the Calgary Real Estate Market: Advice for Buyers and Sellers

For potential buyers, understanding the current market dynamics is paramount. Given the tight supply and increasing prices, particularly in the more affordable segments, acting decisively while being well-informed is crucial. Working with an experienced local real estate agent who can provide real-time insights and navigate competitive bidding situations is highly recommended. Exploring all property types, including condominiums and townhouses, can open up more opportunities for homeownership in Calgary.

Sellers, on the other hand, are currently in a strong position. With high demand and limited inventory, properties are moving quickly and often fetching competitive prices. However, understanding the nuances of local sub-markets and pricing strategies is still key to maximizing returns. Accurate pricing based on current market data, alongside professional staging and marketing, can ensure a smooth and profitable sale.

Calgary’s Economic Resilience and Future Housing Outlook

Calgary’s real estate market resilience is underpinned by a robust local economy. The city benefits from a diverse economic base, including a strong energy sector, growing tech industry, and a thriving entrepreneurial spirit. This economic stability, coupled with attractive employment opportunities, continues to draw inter-provincial migrants, further boosting housing demand. As long as Calgary remains an appealing destination for new residents and businesses, the underlying demand for housing is likely to persist.

Looking ahead, the CREB chief economist’s assessment suggests that a shift towards more balanced conditions will take time. This implies that while new listings may see incremental improvements, significant relief from tight inventory and upward price pressure is not on the immediate horizon. Buyers should anticipate a competitive environment, and sellers can likely expect to continue benefiting from favorable market conditions in the short to medium term. Monitoring interest rate policies and broader economic indicators will be crucial for understanding future shifts in this dynamic market.

For a comprehensive understanding of the Calgary market, you can read CREB’s full October statistics package here.