'Sellers are in the driver seat': Calgary housing inventory sinks to 2006 levels, sales almost halved: Alberta board

Buying a home in Calgary is becoming more challenging as February inventory plummeted to the lowest levels the local market has seen since 2006, the Calgary Real Estate Board reported.

As a result, sales were almost halved from the same month in 2022:1,740, which was a 47 per cent fall from February 2022.

Curtis Atkinson, a local RE/MAX realtor, said there are a number of factors leading to low inventory.

“You have high interest rates, which have basically doubled in the last year," he said. "We also have the fact that there's heavy inflation, which pulls people back on actually making a purchase."

“And then, the fact that once you sell your home, it's very difficult to find another home, so many are forced to sell prior to taking possession of another home.”

Atkinson notes that sellers are “in the driver seat” as homes are being sold well above market value.

A recent sale he made at a property in Calgary’s northwest community of Varsity received a final offer of $110,000 above asking price following heavy competition from interested buyers.

“That home alone had 50 viewings in just two days,” he added.

“People are willing to spend a little bit more and the bottom line is that with fewer listings, people are willing to step up and potentially spend over list, regardless of the interest rates."

Atkinson also pointed out a number of positives. While interest rates have doubled over the past year, they're still just under five per cent, which remains historically low over the past 30 years. Alberta's economy is the strongest in the country and the province just registered a huge surplus. The city's population continues to grow, all of which adds up to the likelihood of a rebound in the market sooner than later, particularly if interest rates stop going up.

SALES CONSISTENT WITH SEASONAL BEHAVIOR

Despite lower inventory, CREB says last month's sales were consistent with typical seasonal behaviour and along with new listings and inventory, trended up from January's levels.

February's new listings amounted to 2,389, a 49 per cent drop from a year earlier.

The market's benchmark price edged up almost two per cent from last February to $530,900, but the average price was down nearly eight per cent to $506,685.

The board's chief economist Ann-Marie Lurie says prices are still below their May 2022 peak and if supply levels do not change, there could be further upward pressure on prices.

"While higher lending rates are impacting sales activity as expected, we are seeing a stronger pullback in new listings, keeping supply levels low and supporting some stronger-than-expected monthly price gains." she said.

The anticipation of possible interest rate hikes is especially concerning right now for those looking to purchase a new home as soon as possible.

Ken Lee is hoping to purchase an investment property for his parents to live in as they’re in the process of immigrating to Calgary from Malaysia.

He says the selection isn’t great for what he’s looking for and the price point is far too high.

“There’s not much available in the market and if I tried to find something anywhere else, it's like everything is quite expensive,” Lee said.

“There’s not a lot of options so prices are high and then with interest rates as well, I think that contributes because it's already gone up so much. The Bank of Canada could raise it even more so yeah it's tough, but I'm hoping it slows down and something comes on the market.”

CALGARY AMONG MOST EXPENSIVE CITIES FOR FIRST YEAR OF HOME OWNERSHIP: REPORT

A new report from Point2 Homes examined the first year cost of home ownership in cities across Canada and found that Calgary is the highest of all locations in the prairies.

The full cost of a first year of home ownership in Calgary amounts to roughly $142,388 and it takes about 10 years of savings to cover that price.

However, Calgary does boast some of the lowest closing costs at $1,904 alongside Edmonton which sits at average of $1,843.

That’s a low number compared to the closing costs in other cities like Toronto ($28,951), Vancouver ($23,215) or Markham ($21,267).

With files from The Canadian Press.