August sees record-high sales amidst historic low inventory, pushing prices higher
Calgary, September 1, 2023 -Thanks to a surge in the condominium market, August sales reached a record high with 2,729 sales. Despite the record levels reported over the past several months, year-to-date sales are still down by 15 per cent compared to last year.
While new listings did improve compared to levels seen this time last year, the sales-to-new-listings ratio remained elevated at 87 per cent, preventing any significant shift from the low inventory situation. Inventory levels in August dropped to 3,254 units, not only a record low for the month but well below the 6,000 units that are typically available. Low inventory combined with high sales this month ensured the months of supply remained low at just over one month.
“Higher lending rates have caused many buyers to either hold off on purchase decisions or shift toward more affordable products on the market,” said CREB® Chief Economist Ann-Marie Lurie. “The challenge has been the availability of supply, especially in the detached market. Inventory levels hit record lows in August, and while new listings are higher than last year, conditions continue to favour the seller, driving further price gains.”
The unadjusted benchmark price reached $570,700 in August, representing the eighth consecutive monthly gain. Prices have trended up across all property types, with row-style properties reporting the largest increase.
Detached
Record low inventory levels this month were primarily driven by pullbacks for homes priced under $700,000. While new listings did improve compared to last year, most of the growth was driven by homes priced over $700,000. August sales did improve over last year’s levels. However, limited supply in the lower price ranges has likely prevented stronger detached home sales.
Persistently tight conditions drove further price gains this month. As of August, the unadjusted benchmark price reached $696,700. Nearly one per cent higher than last month and over 10 per cent higher than last year’s levels. The highest year-over-year price gains occurred in the most affordable regions of the city’s North East and East districts.
Semi-Detached
The 236 new listings and 197 sales did little to change the low inventory situation. While inventory levels did remain comparable to last month, they are still 35 per cent below last year’s levels and at record lows for the month. Relatively strong sales combined with low inventory levels have given sellers the advantage.
With months of supply remaining exceptionally low throughout 2023, we continue to see upward pressure on home prices. As of August, the semi-detached unadjusted benchmark price reached $623,200, a monthly gain of one per cent and 10 per cent higher than last year. Price growth did range across each of the Calgary districts, but the strongest year-over-year gains were reported in the most affordable districts of the North East and East.
Row
The gain in new listings did little to offset the strong sales activity as the sales-to-new-listings ratio remained high at 94 per cent. This prevented any additions to the inventory and left the months of supply below one month for the fifth consecutive month.
The persistently tight conditions placed further upward pressure on home prices. In August, the unadjusted benchmark price reached $413,200, a monthly gain of over one per cent and nearly 16 per cent higher than levels reported last year. Year-over-year gains have occurred across all districts, ranging from 12 per cent in the North West to 29 per cent in the East district.
Apartment Condominium
August sales continue to rise over last month and last year’s levels. Recent gains have caused year-to-date sales to reach 5,582 units, nearly 22 per cent higher than last year’s levels and a new record high for the city. Tight rental markets and relative affordability have driven many purchasers to the apartment condominium sector. At the same time, new listings have struggled to keep pace as the sales-to-new-listings ratio bumped up to 98 per cent in August, causing inventories to ease and the months of supply to drop to one month.
The tight market conditions have been placing upward pressure on home prices, and as of August, the unadjusted benchmark price reached $309,100, a monthly gain of over one per cent and a year-over-year gain of over 13 per cent. The City Centre is the only district that did not report a monthly price gain, and prices are still below their previous highs in 2014. This is partly due to better supply/demand balances in the City Centre compared to other parts of the city.
REGIONAL MARKET FACTS
Airdrie
With 204 sales and 206 new listings, the sales-to-new-listings ratio pushed up to 99 per cent, causing inventory levels to decline. With only 176 units available in inventory, the months of supply once again dropped below one month.
The persistently tight market conditions continued to place upward pressure on home prices. In August, the unadjusted benchmark price reached $515,600, up from last month and nearly six per cent higher than last year’s.
Cochrane
Following several months of inventory gains, August saw inventory levels fall to 144 units due to a pullback in new listings. While sales did improve compared to last year, the pullback in new listings caused the sales-to-new-listings ratio to increase to 91 per cent. Meanwhile, the months of supply remained below two months, not as tight as what is being experienced in Airdrie but far lower than what we would typically expect in the town.
The persistently tight market conditions drove further price gains this month. The unadjusted benchmark price reached $534,700 in August, nearly one per cent higher than last month and over four per cent higher than last year’s levels. Prices trended up across all property types, but the most significant monthly gains occurred in the relatively affordable apartment condominium sector.
Okotoks
The 59 sales in August were met with 65 new listings in the month, causing further retractions to the already low inventory levels. With only 64 units available, Inventory levels hit a new record low for August. The drop in inventory also caused the months of supply to remain low at one month.
Despite the tight market conditions, benchmark prices decreased from last month’s high. The monthly variation is not uncommon for smaller centres, and it is important to note that with a benchmark price of $582,000, prices remain seven per cent higher than last year’s levels and 10 per cent higher than where we were at the start of the year.