Is The Hot Real Estate Market In Our Rearview? (August 2021)

Have you ever been driving home from a wonderful trip to the mountains and while driving, see these massive mountains around you and in what felt like minutes, just see hills and plains? That change can happen so suddenly!

Now you might be asking yourself, what do the mountains have to do with this month's market update. Well, from those high peaks we are now descending into the hills after this past month.

But before we dive in, if you are new, welcome! I'm Aly, a local Calgary real estate agent for the past 6 years. I help predominately first-time buyers with their first homes as well as many wonderful sellers over the years with capitalizing on the sale of their homes and investments.

So what happened this past month? Let's have a look at the stats.

Aggregated Absorption Rates - August 2021

Now you can see what I mean with those mountains in your rearview mirror.

This month we saw a decline in our absorption rate from 40% in June to 33% in July. This is the 5th month of declines in the rate dating back to March when we saw a rate of 51%.

This month, we have 5% fewer listings and a decline of 21% in sales from the previous month. With a rate of 33%, we are now back to levels that are considered a balanced market. Anything lower than 30% would be considered a buyer's market.

For those of you with apartments, here is your rate.

Apartment Absorption Rates - August 2021

You can see we are very near to the levels of last year with a rate of 17%. This is a decline from 21% last month and is driven by a 3% decline in inventory and a 22% drop in sales compared to last month.

With these changes in the market activity, we need to understand what is causing this big shift.

What's The Story?

If you keep up to date with these breakdowns (thank you by the way!) you will know that the economics of real estate really just boils down to supply and demand. In the height of the number of sales back in March, the demand was high due to extremely low interest rates, less restricted stress tests and that inventory levels were being outpaced by sales due to the pandemic slowing sellers from listing their homes.

Fast forward to now, what has changed? Now we are seeing that new listings are outpacing the number of sales (only a decline of 3% in listings this month vs. a decline in sales of 22%). When this happens, we give buyers more selection, they are able to breathe a bit more with their purchases and are able to make sound decisions with their purchase.

As I mentioned last month, reopening has a lot to do with this shift. Now, with no restrictions, sellers are more comfortable with selling their homes and are flooding the market to try and take advantage while it's still possible.

However, although this might sound like an opportunity for buyers that have been waiting for price changes, the field has changed for buyers as well.

No longer, can you get rates as low as 1.4%, which was offered back in February and March. Now, you are looking somewhere in between 1.74% and 1.99% for your rate. And if you read my blog entitled, "Everyone Hates The Sticker Price" you will know this increase of 0.35% to 0.50% is a massive increase in the mortgage servicing cost. This increase is significantly more than paying 1-2% more in your home's price.

Oh and also, don't forget, the qualifying rate for buyers has increased as well. The stress test makes it harder for buyers to qualify for a mortgage because they are tested at higher rates. Check out, "Who Does the Stress Test Help? - Not Buyers!" to learn why this program ultimately hurts Calgary buyers.

So with changes happening on both sides of the pendulum, we are seeing more inventory to market and things being more challenging for buyers to purchase their homes.

What You Can Do About It

If you are entering the market, whether it be buying or selling, you need to have a clear understanding of the current landscape of the market and act accordingly for success.

For sellers, you need to understand that the days of quick and high sales are slowly passing us by. You have to price according to the market and understand that you might not be getting those multiple offers any longer. We are now in a balanced market and will be in one until inventory levels decline into the school year and holiday months. Sit down with your real estate professional (or set some time with me by clicking here) and let's discuss your options.

Buyers, there is more selection for you, which is wonderful to have. However, it's a very different landscape than 2019 or early 2020. Prices are higher, inventory levels are growing but not at the rate that they were in 2019, which means prices are going to remain stable. The best advice I have for you is to ensure you have your financial house in order and have the pre-approval in place before shopping. There are so many sales falling apart due to financing because buyers aren't taking the time to ensure they have the appropriate approvals. You have some breathing room now, take advantage and make sure everything is in order.

As usual, I hope you've found this breakdown helpful and it has added some value to you. If you'd like to learn more about how I can help you as a buyer or seller in today's market, please feel free to send me an email at

Thank you,


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