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Calgary Real Estate 2020 Year End Wrap

With sales of 1200 homes, Calgary has seen the best December sales since 2007. Attractive interest rates along with prices that remain lower than several years ago have likely supported some of the recovery in the second half of the year. However, it is important to note that annual sales activity declined by one per cent compared to last year and remain well below long-term averages.


Although New listings in December across the board increased by 11 per cent,, the number of sales exceeded the number of new listings, plus a lot of listings were either terminated or expired, and therefore inventory has become greatly reduced. Reductions in supply and improving demand in the second half of the year have contributed to some of the recent price improvements in the market. However, the recent gain in the benchmark price was not enough to offset earlier pullbacks as the annual residential benchmark price in Calgary declined by one per cent over last year because of the early lockdown and fears brought about by the onset of Covid-19.


The pandemic has resulted in a significant shift in economic conditions, yet the housing market is entering 2021 in far more balanced conditions than we have seen in over five years. This will help provide some cushion for the market moving into 2021, but conditions will continue to vary depending on price range, location, and product type. Generally, like in November, the shift from condo purchases (for first time home buyers) to townhouses has led to a significant turnaround in those. Added to this was a conscious decision by builders to focus on the cheaper option of building townhouses where we once saw the less profitable semi-detached. The higher price here added to the nearly 6% average price of townhouses from last December and a 33% increase in sales.  Also doing very well is the detached home. Total sales here are up a whopping 42.5% which led to a significant 31% drop in active listings. Average prices though were only up about 1% as it's becoming obvious, the sales are driven by lower prices. Prices should begin to rise in the spring with detached as months of supply here have dropped well over 52% from last year and days on the market is now 17% lower than last December. I've been involved in several situations where a well priced detached property sold within days of being listed.


Apartment sales are up by 38% but so are listings (up nearly 20%). Condo/apt continue to drop in value both in medium and average price by about 14% and despite the sales, still has 2% higher listings than this time last year due to a flurry of newer listings earlier in the year. Semi-detached has seen total sales up by 39% and a similar percentage drop in active listings, yet medium prices are nearly 12% lower than last year, and the average price 5.4% lower. This is reflective of a trend away from these house types, both new and old, and as a result we are seeing builders in the inner city turning more to the townhouse concept.


Below is a chart of December 2020/december 2019 figures:


DETACHED:


TOTAL SALES: +43%
NEW LISTINGS: +8%
ACTIVE LISTINGS -31%
MEDIUM PRICE NO CHANGE
AVERAGE PRICE +1%
DOM (DAYS ON MARKET) -17%

TOWNHOUSE


TOTAL SALES: +33%
NEW LISTINGS: +11.5%
ACTIVE LISTINGS -11%
MEDIUM PRICE -1.7
AVERAGE PRICE +5.8%
DOM ( DAYS ON MARKET ) +4.5%

SEMI-DETACHED


TOTAL SALES: +39%
NEW LISTINGS: +2%
ACTIVE LISTINGS -37%
MEDIUM PRICE -11.5%
AVERAGE PRICE -5.4%
DOM ( DAYS ON MARKET ) -7.6%

CONDOS


TOTAL SALES: +38%
NEW LISTINGS: +19.5%
ACTIVE LISTINGS +2%
MEDIUM PRICE -14.5
AVERAGE PRICE -14%
DOM ( DAYS ON MARKET ) +2%

Besides the huge improvement on sales, also notable is the difference in medium price and average price. Over the year, the medium price has continued to drop, indicating
a general trend towards purchasing more lower priced homes.  Only in the case of condos, has the average price matched that drop. With both detached and townhouses there has been
positive movement in average price, indicating that though more lower priced homes are being purchased, when averaged together, prices have begun to rebound in these sectors.

Of course lower interest rates have something to do with it. But through vigorous sales during a brutal pandemic, the buying public seems to have regained confidence in
the market. Likely there'll be a drop in the winter months, both in sales and new listings, but spring things could ramp up again. In this new normal, anything is possible. 

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