The Calgary real estate market has been heating up for quite some time, providing many challenges for buyers and realtors. However, with every challenge comes an opportunity—and that’s what we’re here to explore. A few quick insights from the 2024 Calgary Real Estate Market Report include:
- Strong seller’s market
- Tight housing market
- Declining affordability
- Increasing population
- Rising mortgage rates
With homes being in short supply, housing prices going up, and more people moving to the city, there’s a lot to keep up with, but what exactly does it mean for you?
Read on to learn more about the insights from the 2024 Calgary Real Estate Market Report along with the challenges and advantages each brings.
2024 Calgary Real Estate Market Report Insights
Looking at the 2024 Calgary Housing Market Report means viewing tons of prices and percentages, most of which have increased. This includes home prices, mortgage rates, and population.
The one number that’s steadily decreasing? The number of homes available.
This creates a tight real estate market in Calgary that puts buyers at a disadvantage until more homes become available. As you can imagine, this presents a unique opportunity for home designers and builders, and has resulted in new zoning bylaws to allow for the development of more multifamily housing.
So, what does this mean for you as an Alberta Realtor? Let’s explore 5 key insights from the report and how you can use them to your advantage.
1. Strong Seller’s Market
The May sales-to-new listings ratio stands at 71%, indicating a robust seller’s market. Despite a slight easing from the previous month’s 83%, demand remains high relative to supply.
Challenges:
- Buyer Frustration: Buyers may become discouraged due to high competition for homes and rising prices. This can lead to longer search times and increased client frustration.
- Inventory Shortage: Limited inventory can make it difficult for agents to find properties that meet their clients’ needs, potentially limiting the number of transactions an agent can handle.
Advantages:
- Higher Commissions: Higher selling prices translate into higher commissions for real estate agents.
- Faster Transactions: Homes tend to sell more quickly, allowing agents to close deals faster and potentially handle more transactions in less time.
2. Tight Housing Market
Benchmark prices across different types of properties have seen considerable growth. Detached homes have risen to $761,800, marking a 13% increase year-over-year while semi-detached and townhouse prices have also seen similar upward trends, reflecting broad-based strength across housing types.
Challenges:
- Increased Workload: Agents may need to work harder to source properties, requiring more networking, research, and legwork to find suitable listings.
- Competitive Bidding: Agents may need to navigate multiple-offer scenarios, which can be stressful and challenging for both you and your clients.
Advantages:
- Premium Pricing: Limited supply can drive up prices, benefiting sellers and their agents through premium pricing strategies.
- Market Expertise: Agents with deep knowledge of the market can leverage this to guide buyers through competitive scenarios. This can enhance your reputation as an expert negotiator.
3. Declining Affordability
As prices rise due to low supply, the Calgary housing market is becoming less affordable. This means lower-cost housing will be more attractive to certain buyers, but with fewer of these properties available, the overall sales volume has slightly decreased (by 0.9%) from last year.
Challenges:
- Market Exclusion: Some potential buyers may be priced out of the market, reducing the pool of buyers and the number of potential sales.
- Increased Buyer Caution: Affordability concerns may lead buyers to be more cautious, prolonging decision-making and complicating the sales process.
Advantages:
- Investment Opportunities: For investors, rising prices can signal strong potential for capital gains, and real estate agents can cater to this segment by identifying promising investment opportunities.
- Diverse Client Strategies: Agents can differentiate themselves by offering creative buying strategies, such as exploring emerging neighborhoods or different types of properties that offer better value.
4. Increasing Population
Calgary’s population is rapidly increasing, with a corresponding need for more housing. Current construction levels are not keeping pace, indicating a continued tight residential real estate market as new residents seek housing. However, the construction of new multi-use homes is forecasted to increase.
Challenges:
- Housing Demand Exceeds Supply: A growing population can exacerbate the issue of housing shortages, creating even more competition and driving up prices.
- Infrastructure Strain: Rapid population growth can strain local infrastructure, potentially making certain areas less attractive to buyers concerned about quality of life.
Advantages:
- Broadening Client Base: A growing population increases the pool of potential clients, including first-time home buyers, newcomers, and investors.
- Long-Term Client Relationships: Real estate agents have the opportunity to build long-term relationships by assisting clients at multiple stages of their life, from buying their first home to upgrading as their family grows.
5. Rising Mortgage Rates
Interest rate policies by the Bank of Canada play a significant role in rising mortgage rates. However, though rates have increased, they were reduced from 5% to 4.75% in June with talk that these policies may be relaxed even more in the months ahead.
This change could stimulate the market for real estate in Calgary, increasing both buying and selling activities.
Challenges:
- Reduced Buying Power: Higher mortgage rates can reduce overall buying power, limiting how much buyers can afford. Potentially, this could cool the market.
- Hesitancy to Act: Potential buyers might hesitate to enter the market due to fears of future rate increases, leading to slower decision-making.
Advantages:
- Refinancing Opportunities: For clients with existing homes, rising rates may provide an opportunity for real estate agents to assist with refinancing or securing fixed-rate mortgages before rates climb further.
- Market Knowledge as a Value-Add: Agents who are well-informed about financial trends can provide valuable advice to clients, helping them make more informed decisions about when to buy or sell.
Where Does Home Design Come In?
In a competitive real estate market in Calgary, connecting with home designers comes with several benefits such as:
- Tailored Solutions: Custom home designers can help agents offer tailored solutions to buyers, turning less-than-perfect homes into dream residences. This capability is invaluable in a market where inventory is low and buyer demand is high.
- Enhancing Property Value: A well-designed home not only attracts more buyers but may also fetch a higher price. This is particularly important in a seller’s market, where maximizing returns can be achieved through standout property features.
- Effective Staging & Presentation: In competitive housing markets, presentation can make a substantial difference. Interior designers can elevate a property’s appeal, potentially reducing listing time and increasing the selling price.
- Marketing Differentiation: Properties that boast unique design enhancements or potential for customization can stand out in crowded market listings. Real estate agents can use these features as key selling points, differentiating their real estate listings from others.
- Building Long-Term Client Relationships: By offering comprehensive services that include design and customization, agents can build stronger, longer-lasting relationships with clients, leading to referrals and repeat business.
- Reliable Expertise: When your clients face intricate questions about bylaws, building codes, or property development potential—such as maximum square footage for new constructions, renovation possibilities, or approval processes—Ellergodt Design is here to provide answers and guidance.
In other words, we’d love to connect with you!
Let’s Talk!
Calgary residential real estate statistics present challenges, but also plenty of opportunities. One of the biggest? The chance for home designers and realtors to work together to create positive change in our community.
Get in touch with the team at Ellergodt Design today and let’s talk!