Calgary Real Estate Market Update – July 2024

It’s like 2022 all over again…

This past month we have seen many changes to the real estate market here in Calgary and the country. And it is a great reminder that our real estate market is delicate.

In this breakdown, we are going to go through the numbers for July and give you some of my advice on how to approach today’s real estate market as well as what you can do to position your mortgages in a way to best serve you.

Without further delay, let us jump into it.

AGGREGATED ABSORPTION RATE (ABS Rate) – CALGARY – ALL SEGMENTS

Plain and simple…we are in a balanced market now with the changes we have exhibited in the real estate market over the last 3 months. Specifically with the changes we have seen on the demand and supply of our market.

In the month of July, the number of listings rose from 3,890 in June to 4,377, a 13% increase month over month. While at the same time, the number of sales plummeted from 2,746 in June to 2,384 in July. A drop of 13%.

If we consider the Absorption Rate (ABS Rate) as a ratio of listings divided by the sales, we see this ratio drop to 54%, which is a 17% drop month over month.

A balanced market is one where the ABS Rate is between the bands of 40-60%. Anything outside of this band would be considered a sellers market (over 60%) or buyer’s market (under 40%)

This significant drop in activity is not something new to the Calgary market. We have seen this same decline occur in 2022.

The ABS Rate of 54% is 13% higher than July 2022, which was 41%.

This massive shift in our activity has lead to changes in our pricing as we head into last month of the Summer.

MEDIAN SALES PRICES PER SEGMENT

In July, we saw price declines across nearly all segments, the most of which coming from the Apartment segment. The attached segment still showed some appreciation in price, which is to be expected as this segment is generally the lowest cost segment before we head into condominium style ownership in townhomes and apartments.

As we continue to see the number of listings continue to climb, further downward pressure will affect pricing. The addition of listings to the market is one part of the equation, the other is the steep decline in buyer activity.

We are still significantly up from the previous year across all segments, but as we have just discussed with the ABS Rate, our market is delicate and these pricing can also change very fast.

So what does these mean for your real estate goals?

BREAKDOWN

Sellers

For the time being, you are going to be potentially competing for that buyer. With the market shifting to a balanced one, this climate for the market allows buyers and sellers to determine a fair price for the sale of the property.

For the last few years it has been the seller in the driver’s seat with multiple offers and non contingent offers. This may start to change for you.

I know speaking from experience on both sides of the coin this past month, we have receiving offers on our listings that have been more fair and the sellers we have been working with have had to make certain concessions to buyers for repairs.

The pricing of the market, as we have seen above is still much stronger than a year ago and is still outperforming most other forms of investments like stocks and GICs. It is still a great time to sell, it just might not be as easy as before with sales within a few hours and offers without viewings.

Selling your home in today’s market is going to take a pricing strategy that needs to be considerate of the market we are in but also have the goal of achieving maximum exposure to the most number of buyers to increase your chances of selling your rather than allowing the days on market to accumulate.

Over the past 10 years, and with the analysis I’ve completed compiling this analysis each month, we can work together to develop a pricing strategy that will fit your needs for your sale.

→ Setup a call or coffee for us to chat about your sale – click here

Buyers

Who you work with matters.

And I know saying that you are probably rolling your eyes expecting a pitch for us to work together. And I’m not going to lie, there is a bit of that here. But even more so than that, it is really important who you work with it because our industry has seen a huge influx of agents that weren’t around prior to the pandemic.

I’ve been on the other side of a few agents that are not only not taking the time to negotiation, but are also inexperienced on how to work in a declining market. Some examples of this include writing offers without any contingencies because they didn’t check to see if any other offers were competing as well as offering full price right out of the gate, without any competition.

I’m not sure if I shared this in a post before, but I started in real estate when the barrel was tanking in 2014-2015. Learning through a fire of a market has really helped me to serve my clients over the years and negotiate purchases that they are still happy with today.

In addition to the market shifting to your favour, keep in mind that you want an experienced agent in your corner that knows how to navigate the changes and work in your best interests.

This blog started out of the necessity of understanding the market so that I can articulate it to my buyers and use the information we have here to serve clients best interest.

If you are open to having the conversation about how an experienced agent in a declining market can help you, let’s grab a coffee and catch. We might be a great fit!

→ Setup a coffee for us to review what attributes you need in your next agent – click here

Mortgages

You’ll noticed I haven’t spoken about the rate change in July until now. The biggest reason for this is that if you understand how the rates change, the BOC is generally behind the market in how it changes it’s monetary policy and overnight rate.

Fixed rates are determined by bond yield, which are traded on the open market. These rates, which most people are getting pre-approved on, have already built in the declining rates well before the BOC changed their overnight rate.

Where the BOC does impact mortgages, is when someone is on a variable rate mortgage and the overnight rate from the BOC is directly tied to this rate (prime – discount = variable rate for homeowner).

Nonetheless, the rate change is welcomed.

If you are purchasing a new home, its very important you work with a broker that can find you the best rate for your particular needs. I cannot stress this enough, rate is very important, but the product it is associated with is also very important.

You can usually find the absolute best rates, but they might have a catch like a bonafide sale clause (you must sell your home to break the mortgage). These types of mortgages exist and people taken them every day because they are only rate conscious.

Regardless if you are coming up for renewal, purchasing a new home, or you need to re-amortized or take equity out of your mortgage as a refinance, having someone work for you to help you understand what is involved in your mortgage is not something to be taken lightly or done on an app or web portal.

If you have questions about your mortgage and are in need of some advice, let’s chat about your options and how we can position your mortgage to work for you and your financial goals.

→ Book your one-on-one chat about your mortgage needs today – click here

Thank you!

As always, thank you for taking the time to review this update. If there is anything I can do to improve it, please do reach out by email (aly@calgaryareahomes.ca). I always appreciate your time and hope this content provides value to you and your financial goals in real estate.

My business is build on the referrals of my past clients, friends, and family and has been like this for 10 years. I can only continue to work with this model because of the amazing referrals from you. Please feel free to share this with anyone you feel would find value in it.

Thank you and take care,

Aly