April was one for the record books. Some would describe it as the "wild west" for real estate. We had more listings, more sales than March, which was the strongest performing month in a decade in our city. But if you see the below chart, you wouldn't see a massive change.
Why is that?
In April, we saw an increase in the active listings of 11% from March 2021 and an increase in sales of 11% month over month. This will lead to no change in the absorption rate above. Which is good news for our market (great news for both buyers and sellers). It would seem that we have peaked so far in terms of the number of new listings to sale ratios. We are still very much in a seller's market but what the above graph is illustrating is that the number of sales to listings is consistent. No one is outperforming the other right now.
"But Aly, this bubble is going to burst! When will that happen?"
The news of an increase in stress tests is definitely an argument to drive the opinion that we should see some kind of cooling in the market. Sure. But is it enough to slow our market here? I don't think so.
You have to understand what is really driving our surge to see why our market is going to continue to perform the way it is. Here are some factors to consider:
Calgary is seeing a surge in job growth in sectors outside Oil & Gas
Our pricing is one of the softest in the country when compared to major markets. This is true even though we are seeing significant price increases recently.
Inventory levels are the lowest they have been due to the pandemic and construction costs
Our city is ideal in the spread of our housing to appeal to buyers that are looking to live further out to take precautions for any future needs to work from home.
All of these factors weigh heavier than the stress test in that the stress test is Canada-wide. Buyers in other parts of the country will see Calgary as a better opportunity for them to get more home for their dollar.
So what can we expect to see in terms of our market going into the summer months. Well, we need to look at the seasonality of the market once again. We have been following previous years that have seen more listings in the spring months. we will continue to see an increased number of listings into the summer due to restrictions becoming lifted and more and more sellers looking to take advantage of the market (which has been due for the last 5 years).
Sellers, if you are planning to act when the restrictions are lifted, I'd say let's talk now (Book a Call by clicking here) and let's discuss your options and how we can prepare your market for sale. You will be seeing more and more competition in the summer months and we need to make sure your home is giving the best first impression to attract one or more buyers as soon as possible.
Buyers, I feel for you. I do! I work with many first-time buyers and if the process was not stressful enough, dealing with competing offers, having to rush, and not having the same confidence in your purchase is scary. But I can tell you if you work with a great agent, our job is to make sure we get you through and help you find that wonderful home to fit what you want. You are going to be dealing with much of the same going into the summer months, however starting in June, if your mortgage is uninsured you will be able to afford less due to the higher stress test. Which will put you at a disadvantage to the market that is surging in price. My recommendation is to take advantage of this month and see if you can find something that works for you and act on it before these changes occur.
The stress test was designed to slow the market across the country and is really a disservice to buyers in our city who are being qualified at the highest levels of scrutiny already. This test is really a deterrent for first-time homebuyers to achieve homeownership by the government.
With more competing listings expected in the coming months, you'd expect pricing to soften but with the stress test, only those buyers that quality will have the chance to purchase. This will shrink the demand pool and allow pricing to remain consistent if not grow into the summer months.
Whether you are selling or buying, let's chat. I'm here to help where I can with your sale or purchase. We are in really volatile times right now and having a trusted advisor in your corner is more important than ever before.
As always, you can reach me at any time by any means below or shoot me an email at firstname.lastname@example.org I would love to help you with your goals with homeownership.
Take care and talk soon.