Mindset Is Everything - August 2021 Market Update (September 2021)

Mindset, motivations and methodology. A coach that I work with always says this when he is discussing running a real estate business. But the same can be said for home sellers and buyers. Your mindset towards the market is critical to how it plays out. We will look at what factors are affecting your mindset, and ultimately your actions in the real estate market today.


But of course, before we start, I'd like to take a moment and introduce myself. I'm Aly, a local real estate agent in Calgary, Alberta. I've been in the business for 6 years and have spent most of my time with RE/MAX and the top-performing office in the world for the last 22 years. If you'd like to learn more about me, check out my story here.


Now let's get into the market.


This month we have seen much of the same from July. Our absorption rate for the month for the Calgary market continues to stay firm at 33%. There are a number of factors that have contributed to this change.


Calgary Aggregated Absorption Rates

Calgary Apartment Absorption Rates


The Pace


From the aggregated chart above you will notice that both the number of listings and the number of sales declined. Intuitively, you would suspect that if listings are declining, then the number of sales should be increasing to absorb these homes. That is not the case we are seeing in the market.


In fact, what we are seeing is fewer sellers are entering the market. Because of this, when a home is sold today, the speed at which it is replenished has slowed. Month over month, we have seen listings decline by 7%, while we are also seeing sales decline by the same amount from July.


In the apartment market, we see the same story. The rate increased to 18% from 17% in July due to a slower pace of decline in sales in this market.


The main driver to this steadiness of the market can be attributed to the mindset buyers and sellers are holding for the market.


The Mindset


A lot of this mindset from the sellers can be attributed to:

  • Higher case counts due to COVID. More cases in unvaccinated individuals mean more variation in the virus, making the vaccine less effective.

  • The election. Different political parties offering different solutions (or barriers) to the real estate market. The uncertainty of the policies for homeowners and their biggest investments will deter sellers from entering the market.

  • Seasonality. As we start heading into fall and winter, fewer homes will come onto the market as owners settle into the school year and ultimately the holidays.

And sellers are not alone in their shift of thinking towards the real estate market. Buyers have also shifted due to:

  • Higher interest rates from a quarter ago in the market. With higher borrowing costs, buyers are forced to afford less in their homes and will rethink the timing of purchasing a home.

  • The election. For much of the same reasons as above in terms of policy changes and which political party comes into power this month.

  • Buyers will buy a home regardless of the weather. A deal is a deal and as you can see above the number of sales through the months remains consistent, with some peaks and valleys throughout the year.

This month we have seen the stop in the decline of the market from our high point in March of 51%. As we continue to settle back into some kind of normality going into the fall and winter months, we can continue to see a sustained rate moving forward. However, if something were to change drastically, we can see a reaction to the market. Especially after the election.


I hope you found this useful and that update was informative. Please feel free to reach out on social media or shoot me an email at aly@calgaryareahomes.ca to learn more about what I do and how I can help you with your real estate needs.


Thank you,

Aly

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