We reviewed the October 2020 market update, and here are the numbers for all condos and houses.
The benchmark selling price now is $ 422,000, which is up a half percent compared to last year. The total sales number is at 1,764, which is up 22% compared to the previous year.
New buyers come into the market to take advantage of the massive swing in interest rates. Last year’s interest rates at this time were as high as 3.5%, and now it’s down 1.5 to 1.6%. That’s about a 2% difference.
The actual number of new listings went up 3.8%. This is good because there is a momentum in supply and demand. But inventory is not there. We only have 5,800 homes on the market; that's down 12% compared to last year.
There are some opportunities now for sellers. We have some listings with multiple offers. We deal with several backup offers for a single property. It shows that people are looking and wanting to make a move up.
People are not travelling as much, so there’s income that they want to re-allocate for this year.
An infill builder in our circle raised his concern about the sudden increase in lumber prices.
The cost to build homes now is so much pricier compared to last month. From $40,000 last month, you need to pay $75,000 this month to get a job done. That’s why he decided to hold tight and not build until lumber prices come down because that's eating his profits.
It’s the same thing with siding. The hurricanes took out the biggest North American siding plant. There's a shortage of raw materials; hence, builders are slowing down. They refuse to sell a house with less profit.
Detached Housing Market
The detached housing market is super interesting because the number of sales has increased by 35%. The benchmark price has also increased by almost 2%. This is what's driving our market right now. People are buying into detached homes.
There's a massive opportunity for people coming out of rental situations. They realize that the cost of renting and a mortgage is almost the same and might even be cheaper depending on what they have for down payments.
People make this jump, from that $300,000-$500,000 range to $500,000-$700,000 if things are stable within their household. It's a matter of finding the right home.
Semi-detached houses are infills and attached type duplex properties. This is another market that increased sales. There are only 174 places, but still, that's 21% more places sold this month versus last year in October.
People want a little more space where they can set up home gyms. They want a yard to sit on while enjoying the sunshine, pretending it’s Mexico.
The prices of detached houses have also dropped down to 395.
The townhouse market value has decreased by about 5%; hence, there's an increase in sales of 8%.
There's a bigger opportunity for people to get into a townhouse right now.
People are interested in townhouses as they usually have three levels, including a basement. It gives a bit more space to spread out versus a condo or apartment-style place.
The prices of apartments in Calgary have dropped about 1.3%, and sales have also dropped 5.7% compared to last year.
Some people are rightsizing as life circumstances changed for them. They're going from a house into a condo. The snow flies, and people want to go to different demographics to park underground or be closer to amenities.
Advice to First Time Home Buyers
For first time home buyers, the first thing you have to identify is which community you want to be in. Whether you want a 1960s house or 1990s, both have pluses.
Then, decide on your preferred area. There are many beautiful homes, but you want to be in the right community and want it to serve you well over the next couple of years.
Buying and selling involve different strategies because the location dictates the process.
Get your house ready to sell and make it look presentable for viewing. Then, work on the timing. You have to balance shopping for a home and selling your house.
The rental market is a lot tighter, as well. For some people who are uncertain about their jobs, they prefer renting for now.
Another reason is migration. Typically, when people move to Calgary, they don't buy homes right away. They'll rent and live for a little while.
Reach out to a realtor to walk you through. It's just right to get information. Everyone's circumstance is unique and different.
Getting a plan is easier when you gather information to move forward. Let us help you figure that out.
It is truly worth having a real conversation with someone you trust, whether we or somebody else. We're not tied to it, but we are bound to make sure you find out information.
Create a strategy with an agent. One of the biggest problems that people can get themselves into is being excited about selling but not knowing where they will go because of the market’s lack of inventory. You need to have a solid plan.
Real estate is one of the people's biggest investments. So why wouldn't you want a plan? We are here to help you create a plan. Email us at firstname.lastname@example.org.