After a record-setting comeback in 2021, Calgary’s scorching hot real estate market is expected to cool a bit this year.
The Calgary Real Estate Board (CREB) forecasts housing sales will drop 7.5 per cent in 2022, as possible rising lending rates cool some of the recent demand.
But CREB also said sales will still be strong due to prospective buyers being able to save money during the COVID-19 pandemic, the rebound of jobs, migration as well as the city’s extremely low supply of available inventory.
“We’re generally expecting to see that sales activity will remain relatively strong, but not at those record levels we had in 2021,” CREB chief economist Ann-Marie Lurie said. “At the same time, we do think that some of those supply challenges are going to continue to persist especially earlier on in the year.”
Lurie added it’s going to take a lot longer for Calgary’s housing market to move into more balanced conditions, especially when it comes to the price of some homes.
“We do expect that prices will continue to rise but not necessarily at the same pace,” Lurie said.
“So expect a four per cent increase in prices this year, but a much slower pace than what we had last year (of eight per cent).”
Bidding wars, perks and $100K over asking
The slowdown, according to CREB, will likely only take place later this year, with this coming spring still strong. And all signs point to that being the case.
Global News was recently invited to a special showing of a home in the southeast community of New Brighton. The listing agent said as soon as the single-family home went “live” the offers started to come in, including from beyond the city’s boundary.
“We have buyers coming in from all over Ontario and B.C.,” Kevin Seitz with EXP Realty said.
“I just got a text message from a person in Toronto that’s looking to put an unconditional offer in. Plus another gentleman just reached out to me to give me a price: an unconditional offer as well.”
Seitz added many homes are selling “sight unseen” and with no conditions or inspections.
While he said he doesn’t recommend that to his clients, it’s what’s happening more and more these days.
“There’s no inventory,” he added. “Houses are flying. You have to put your best foot forward and if you’re comfortable with that, then proceed.”
Fellow EXP Realty agent Curtis Prokopchuk has also seen the huge demand for homes in Calgary along with the lack of supply.
He said people are jumping on any home they can and so are realtors.
“We’ll do anything for listings right now,” Prokopchuk said.
Prokopchuk even put up a plea on Facebook asking for homes to sell in exchange for a perk.
“I was willing to cover all of the listing expenses so pictures, photos, measurements all of the marketing.”
The cost to him: hundreds, possibly even thousands of dollars.
“(Listing fees) can be anywhere from $500 to $1500. Maybe $2000 on a really nice listing,” Prokopchuk said. “It is 100 per cent worth it, especially in this market when houses are selling within the first 24 hours.”
Not only are homes selling quickly, but both realtors point out they’re often selling for thousands more and in some cases tens of thousands of dollars more.
“It’s changing every week,” Prokopchuk said. “We’ve even seen a new sale go up for $100K over list price.”
Buyers caught in the middle
Meanwhile, some Calgary home buyers are praying for a bit of a slowdown so they can get back into to the market.
Celsey Peel presold her home six months ago. She’s been looking for a new home since then, but hasn’t had any luck.
“It’s just been really hard just to get in to see homes,” she said. “So we’re just here to see it and we hope there won’t be tons of offers or a high sale price at the end. Or lots of bidding wars.”
She checked out the home in New Brighton but was undecided when she left.
“We need a house by March 15”, she told Global News. “So we are on the hunt and aggressively getting in there to do showings.”
Seitz told Global News he did 53 showings of the home, with some 30 groups going through and the sellers received nine offers.
The final sale has not yet been negotiated.