The Calgary Market Shifts Towards Buyers
OCTOBER IS HERE ALREADY AND WHILE THE WEATHER IN CALGARY HAS BEEN QUITE MILD the real estate market is cooling off and quite quickly.
Usually at this time of year we are speaking about the ‘seasonal slowdown’ where sales and listings both drop and the market stays about as tight as it was earlier in the year, just with less overall activity. That was the case in 2023, but 2024 is a whole different ballgame for a few key reasons, all of which have the last quarter of the year positioned as the best conditions buyers have seen in several years.
FINALLY A BALANCED MARKET
The major news is that in September Calgary came in at 2.53 Months of Supply – right on the nose of balanced conditions between buyers and sellers, with all signs pointing towards well-defined Buyers’ Market conditions arriving this winter. Calgary began this shift in June, right at the start of the summer, and has been steadily softening since then. With Months of Supply increasing from less than one month’s supply to over two and a half, the strong sellers’ market conditions have been effectively erased in just five months’ time.
This trend is in stark contrast to what we observed throughout all of 2023, when we had less than two months of supply all year long. In fact, if you were to look at September of 2023 you’d see we were well into sellers’ market
territory even as we entered
our seasonal slowdown, a much different condition than we have today.
THE PRICING PICTURE
Looking at pricing, we can see more evidence of cooling conditions in Cowtown. For the third consecutive month we’ve seen prices decrease, to the point where they now nearly match what they were back in March at the height of the spring market, when we had less than one month’s worth of inventory for buyers to choose from. In September, prices dipped below $600,000 to an average price of $596,900, while sales continued their decline to 2,003 units exchanged over the past month.
Looking at the graph
(below), you can see the difference between last year’s slowdown and what we are seeing now. 2023’s prices stayed pretty close to $570,000 all through the latter half of the year, despite low inventory conditions, which is in contrast to the declining prices and easing of pressure that we are seeing here in 2024.
WHAT’S BEHIND THIS SLOWDOWN?
Why is this happening, and do Calgary homeowners have to worry about anything? Well, there are a couple of things going on that are driving these conditions right now. The first is that we have had very strong seller’s market conditions for several years now and buyers are simply fatigued. In fact, you would need to go back three full years, to September 2021, when we last had balanced conditions in Calgary. Buyers are a bit fed up with bidding wars, writing offers with no conditions and having very little inventory to choose from. And, as a result, they just aren’t jumping on properties with the same gusto as we’ve been accustomed to seeing recently. 
Buyers aren’t jumping on properties with the same gusto as we’ve been accustomed to seeing.
Making matters worse is that such strong sellers’ market conditions have also emboldened many sellers to take an aspirational approach to pricing their listings, more or less looking at the last comparable sale and asking for just a bit more money for no reason other than “the market is super hot”. This has led to buyer apathy and low-quality, high-priced listings languishing and dragging down the sales statistics.
But this is not a systemic issue that is likely to continue. The economic fundamentals underpinning our recent growth market are just too strong for Alberta – and, by extension, Calgary – and so it’s unlikely that these conditions will persist much past this winter. Alberta’s population is set to increase considerably in the years to come, mostly from interprovincial net migration, and so demand is sure to return, but perhaps at more modest levels than we’ve seen recently.
AN EXCELLENT TIME FOR BUYERS
Other factors that will draw buyers back in are the recent reductions
in interest rates and the general expectation that they will be reduced even further over the winter months, which is causing some buyers to pause as they wait for the bottom
of the key lending rate changes to arrive. The federal government also made some changes to mortgage qualification criteria, most notably increasing the limit of insured
mortgages from $1M to $1.5M, lengthening the available amortizations from 25 years to 30, and also removing the application of the ‘stress test’ to mortgage renewals.
So, with softening market conditions and easier mortgage financing terms, this does represent an excellent time for buyers to make their move and get into the market.
AND IN LOCAL NEWS...
The Green Line LRT is facing cancellation, with Mayor Jyoti Gondek citing an inability for our city to afford the project after the province pulled its $1.53 billion share of the funding. Transportation and Economic Corridors Minister Devin Dreeshen called the city’s revised Green Line LRT plan “unacceptable,” saying the province would not support it. In late July, to address rising costs, council voted 10-5 to cut six stations from the initial phase of the Green Line and to increase its budget by $700 million to over $6.2 billion. It’s possible we may see the province take control of the project, which may be the way to go seeing as how the West Calgary Ring Road was completed on time and on budget and carried a similar hefty price tag.
And, as always, if you’d like some help with your own real estate purchase or sale, please don’t hesitate to reach out.
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