By: Doug Cabral

2021 Market Recap and 2022 Forecast

Tags: Calgary, YYC, Real Estate, Doug Cabral, Royal LePage, Homes, Realtor

2021 Recap. - A record year for the Calgary Real Estate Market

The conclusion of 2021 saw no slow down in sales activity and as such, Calgary secured a record year for
home sales. Calgary sales reached just shy of 28,000 units this year which was 72% higher than 2020 and
44% higher than the 10 year average. The Benchmark price in Calgary now sits at $451,567 and that falls
just short of the record set back in 2015. With that surge of sales activity and lack of new listings comes
some of the tightest inventory conditions seen in over a decade.

In the detached sector we are sitting on the lowest inventory on record. If you own a detached home you
would have seen approximately a 12% appreciation over the last year which sets a new pricing high for
detached products here in Calgary.

In the attached sector, both semi-detached and row homes have also seen a significant increase in
sales over the last year. Almost 45% higher than long-term averages. With the low inventory and price
gains in detached, many buyers are starting to point towards an attached product for their next home. I
would expect this trend to continue throughout 2022. This sales activity and tightening of inventory has
also resulted in price gains for detached homes of almost 7-10% in 2021.

Apartment Condominium products have not experienced the same supply shortages as the other sectors,
and inventory levels for this product still remain well above historical levels. That said, the inventory did
fall enough to suggest that Apartment Condominiums may be headed towards balanced market
conditions as we progress into 2022. Prices are still recovering and still sit 14% below the previous highs
in 2014.

Airdrie, Cochrane and Okotoks all saw record years in sales activity. Leading the charge on pricing was
Okotoks, which saw a record high with their benchmark price now sitting at $474,842 which is an increase
of almost 9%, & they have less than a month of supply on the market. Next up - Cochrane with
sales-to-new-listings ratios exceeded 100% for most of the last 6 months in these markets which has
resulted in inventories lower than they have been in over a decade. Their benchmark price rose almost
7% in 2021 which is a record high. Airdrie had a record 2300 sales thi year which is 78% higher than the
averages over the last decade and 38% higher than their previous record. Prices rose almost 12% in
2021. I would expect that this trend of buyers looking towards our surrounding markets for their home
purchases to continue and that all of these markets will see a stellar 2022!

2022 Forecast.

The CREB 2022 Forecast (released Jan 25 2022) from CREB Chief Economist Anne-Marie Lurie stated
that our Calgary housing market is expected to remain strong in 2022 after a record breaking 2021. She’s
quoted saying:

“Despite challenges with COVID-19, we are starting to see a turnaround in our job and migration
numbers, and while interest rates are expected to rise, they remain relatively low. All these factors are
expected to support strong housing demand into 2022. The biggest question will be whether supply can
meet that demand. It will take time for our housing to move out of sellers’ market conditions, so we
anticipate prices will continue to rise this year."

Speaking of interest rates, the Bank of Canada just held their rate which did come as a surprise to some.
We are expecting interest rates to incrementally rise throughout the year which may start to cool off some
markets later into 2022. Keep in mind that rates are still historically low and that combined with continued
expected economic improvements and population growth, will result in a strong housing market in 2022.
Again back to the big question about supply keeping up with demand in 2022. Continued scarce inventory
levels does impact sales activity. For some buyers prices may appreciate beyond their reach for their
desired product type or area. The competitiveness of the market can also cause frustration amongst
buyers. So whether priced out or just not successful in winning homes in offers, we expect some buyers
will start looking at attached and apartment properties instead of detached.

Throughout the pandemic we saw buyer activity outpacing new listings and now that we seem to be
headed towards a new endemic phase, sellers have something else on their minds, “While my home has
appreciated and could likely sell in a hot minute, will I be able to buy in this competitive market?”. This is a
fair question and for those that need to sell their home to move up in this market, this is a real concern.
The best option would be to make sure you are working closely with your mortgage broker and realtor to
make sure the strategy and financial plan towards making your move is sound. Know all of your options
and contingencies ahead of time. This will allow you to be confident, flexible and focused towards
achieving the result you are hoping for.

Now to ease buyers concerns about pricing, Calgary isn’t forecasted to have the same price appreciation
in 2022. That said, prices will continue to be on the rise and we will be watching both interest rates and
supply levels closely to see what happens to pricing and sales activity as we move through 2022.
January Recap and February Outlook.

Another hot month in sales activity to start the year saw inventory levels drop to the lowest levels since
2006 and price appreciates upwards of 2%. A strong push from buyers to get ahead of any further interest
rate increases and get in before more prices continue to increase with this strong sellers market. While
city wide we saw more listings come on this month it still wasn’t enough to keep up with the pent up buyer
demand. All of our sales activity was significantly higher than historical levels for the month of January.
We really did not have our usual 6-8 week slow down in activity over Christmas break and in the turn of
the year.

Detached homes fell to a record low inventory of 895 units which leaves us with 1 month or less than a
month of inventory in this product type. It also pushed up the Benchmark price from that of December
2020 almost $12K. I would expect that new listings for detached homes will continue to increase monthly
between now and the spring. That said, inventory levels may still remain low as a result of buyers
appetites keeping up with new inventory.

The semi-detached homes are also now seeing record lows of supply and this is a product type that I
believe will start seeing some quick gains between now and spring. Again, buyers that may be starting to
jump from the detached to the attached market pools because of frustrations or being priced out of the
market. Good news for the apartment sector, January saw some of the highest sales numbers for this
month since 2007. This product type has moved from what was buyers market the last 6 years to more
balanced market conditions.

Good news for those that bought in the last five years as many of these customers are looking for price
recovery to allow them to lick their wounds and finally make that long awaited move up into a different
product segment. Some of these apartment owners are electing to lease their properties behind them as
the rental market is looking pretty healthy.

LISTINGS, listings, listings! BUYERS want them and I have pretty much run out of LISTINGS to
SELL! Reach out to me if you are curious as to the present value of your home and also how we plan to
market your home. If you are looking to make that move, you may not want to be waiting until more
inventory starts hitting the market or interest rates start to rise. Both of those factors can affect the future
price for your home. You never do better as a seller than when more than one party wants to put an offer
on your home. BUYERS! It is a competitive market, a tough one to be in and it’s going to take preparation, strategy, endurance and aggressiveness to find and secure you that next home. That said, if the market continues to be this hot, you likely can expect to move in with some bonus equity as a result of
price increases. Let’s get started.

If you or anyone you know are looking to LIST your home or make a MOVE this year don’t hesitate. Let’s
get started. Appreciate my networks keeping me top of mind. Feel free to forward this newsletter and
market report to anyone you know who is curious about the market.

Yours in Real Estate,
Doug Cabral
Royal LePage Benchmark

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