THE HOT MARKET COOLS (A BIT) // REAL ESTATE
THE HOT MARKET COOLS (A BIT) SELLER’S, BUYER’S OR BALANCED MARKET? BY JOHN HARDY
F
or more than a year, despite the fallout from lockdowns and workplace unpredictability, Calgary sellers basked in wild home prices, a lack of inventory and listings supply falling way short of buyer demand. Calgary buyers cringed about wild home prices, having to strategize and maneuver around discouraging multiple offers, often ridiculously above listing price. While Calgary buyers and sellers credit and blame the obvious – spiking mortgage rates and high prices – Calgary realtors suggest a different cause and effect. “The most significant factor to help the market cool off, meaning slow the pace down, is the supply of homes,” says Jared Chamberlain, broker/owner of the Chamberlain Real Estate Group. “The inventory is really low for the current rate of demand. If many homes came into the market that were quality properties, then we could start to see things slowing in terms of the urgency in the market and moving to a balanced market. Prices, on the other hand, probably wouldn’t decrease. Interest rates and other external factors won’t cool down the market because we only have a supply shortage issue, nothing else. We are still seeing the market in full swing, with less urgency. The Calgary market hasn’t seen
42
JULY 2022 // BUSINESS IN CALGARY // BUSINESSINCALGARY.COM
interest from other provinces like this before, where people are changing their whole life and where they live to find more affordability,” he notes. The Canadian Real Estate Association (CREA) points out that Calgary is a reflection of a nation-wide trend. ”Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” the CREA says. “Home prices across Canada appear to be slipping under the weight of rising interest rates, with the nationwide average home price falling to $746,000.” CREA’s benchmark home price index – a metric designed to create an “apples-to-apples” comparison of typical home sales over time – also posted a decline of 0.6 per cent monthover-month, the first such decline since April 2020. According to the recent Royal LePage (RLP) House Price Survey, the aggregate price of a home in Canada increased 25.1 per cent year-over-year to $856,900 in the first quarter of 2022 – `the highest gain on record since the Company began tracking aggregate prices. As strong buyer demand continues to outpace supply in almost every
