CREB® has released its 2022 housing market forecast for Calgary and surrounding areas.
According to the report, housing market activity in 2022 is expected to moderate relative to record levels of activity in 2021, while remaining stronger than historical levels.
“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,” said CREB® Chief Economist Ann-Marie Lurie.
“The biggest question will be whether supply can meet that demand. It will take time for housing to move out of sellers’ market conditions, so we do anticipate prices will continue to rise this year.”
Rising lending rates are expected to cool some of the demand later this year, but rates are still exceptionally low, supporting strong housing sales, especially from those who experienced increased savings and equity gains throughout the pandemic. Lurie says economic improvements are also expected to support both job and population growth, adding new sources of demand for housing.
“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.” - CREB® Chief Economist Ann-Marie Lurie.
During the pandemic, supply has been a struggle for many industries, including the housing market. New listings have improved, but Lurie says it has not been enough to offset high sales levels, keeping inventories relatively low and likely limiting sales growth in the market.
As we move through 2022, Lurie says new listings in the resale market should remain relatively strong thanks to higher home prices. At the same time, the new-home sector recorded a surge in starts last year, and the completion of those starts should help add to overall supply choice in the market.
Supply levels are expected to improve relative to demand this year, according to the report. However, conditions are expected to remain relatively tight throughout the spring market, supporting further price gains.
As the market balance gradually improves, Lurie says upward price pressure in the housing market should ease. Overall, price growth is expected to ease to four percent in 2022.
“While conditions in the housing market are expected to remain strong, there is a significant amount of uncertainty that could impact housing,” said Lurie.
“If supply levels remain low relative to demand, we could see stronger-than-expected price growth. On the other hand, if rates rise much faster and higher than expected, it could cause a more significant pullback in sales.”
Click here for the full CREB® 2022 Forecast Calgary and Region Yearly Outlook Report.
Courtesy Calgary Real Estate Board.
The data is in and strong December home sales crowned 2021 as the busiest year for homebuying in the 14-year history of the RE/MAX National Housing Report. According to the latest report, which measured 51 metro areas, December 2021 home sales were the second-highest for the month in report history, trailing only December 2020. In fact, there’s evidence to suggest December home transactions could have been even stronger had it not been for record-low inventory.
Contributing to the craze, the year 2021 ended with the smallest number of homes for sale in the 14-year history of the report. The 10 months with the lowest inventory in report history all occurred in 2021. Based on the rate of home sales in December 2021, the Months Supply of Inventory decreased to 1.2 compared to 1.4 in November 2021, and decreased compared to 2.0 in December 2020. For context, a six months supply indicates a market balanced equally between buyers and sellers.
The ups and downs of the housing market since the onset of the pandemic in early 2020 have proven one thing: homebuyers are resilient – and those who are able to get in the game have wasted no time. Nick Bailey, President and Chief Executive Officer of RE/MAX, LLC, thinks the hot streak is likely to continue into 2022 but is hopeful more sellers come off the fence to alleviate some of the challenges buyers have been facing for years.
“December capped a fantastic year for home sales. After a busy 2020, we expected 2021 to be even better – and it was. Buyers shrugged off all sorts of potential obstacles – high prices, record-low inventory, stiff competition for available listings – and kept things rolling the entire year.”
Adds Bailey, “The story of housing in 2021 was centred around high demand that led to a substantial increase in sales despite ultra-low supply. What’s promising for 2022 is that many of the factors which drove record sales in 2021 remain in place. Interest rates are still attractive, workplace flexibility continues, and many homeowners are sitting on a mountain of equity. If more of them become sellers, there’s ample reason to think the hot streak will continue. The past two years have proven that buyers are out there and ready to go.”
Courtesy RE/MAX Canada
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December sales reached record levels despite further reduction in new listings. The strong sales have caused inventory levels to drop to a mere 82 units, which is the lowest they’ve been since 2005. Overall, Airdrie recorded a record 2,299 sales this year. This is 78 per cent higher than activity recorded over the past 10 years and is 36 per cent higher than the previous record set in 2014.
Airdrie’s strong growth in housing demand could be related to the relative affordability of detached homes there compared to Calgary and less concern among consumers over commute times, as some companies shift toward hybrid work options. Bringing on new supply has been a challenge in Airdrie, and this has driven some significant price gains in the city. Overall, annual benchmark prices hit a new record at $380,867 in 2021, nearly 12 per cent higher than last year’s levels and two per cent higher than the previous annual record.
Despite persistently low levels of new listings relative to sales, Cochrane’s sales reached record levels in 2021. However, the sales-to-new-listings ratio has exceeded 100 per cent for four of the past six months, causing inventories to drop to the lowest levels seen in over a decade.
This has caused further tightening in the market, as the months of supply has remained below one month over the past two months. The exceptionally tight conditions, especially over the past few months, have caused further price gains. As of December, the benchmark price was nearly 10 per cent higher than levels reported last year. Overall, on an annual basis, the benchmark price has increased by seven per cent, reflecting a new record high for the town.
Despite persistent challenges with supply levels, sales in Okotoks reached record levels in 2021. However, the strong sales weighed on inventory levels, which on average eased by 41 per cent this year and remain over 50 per cent lower than what the market typically has available.
Easing inventory and strong sales left the months of supply at record-low levels in December with less than one month of supply. With sellers’ market conditions throughout the year, there have been some significant gains in prices. On an annual basis, the benchmark price hit a new record high at $474,842, which is an annual gain of nearly nine per cent.
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