Are Calgary House Prices Dropping? A Realtor®'s Perspective

As a Realtor® in Calgary, I often get asked about the state of the real estate market and whether house prices are dropping. It's a common concern for both buyers and sellers, as the housing market plays a significant role in our financial well-being. In this blog post, I will provide you with an in-depth analysis of the Calgary housing market, the factors influencing house prices, and the outlook for the future.

The Current State of the Calgary Housing Market

To understand whether Calgary house prices are dropping, it's essential to examine the current state of the market. In August 2023, Calgary experienced a significant increase in sales activity, with 2,729 sales recorded, setting an activity record for the month. This surge in sales can be attributed to a lack of supply, which continues to push benchmark prices higher. However, it's important to note that while benchmark prices are rising, average and median prices are trending lower due to affordability concerns.

The Calgary housing market has seen its fair share of ups and downs in recent years. According to a report by CREB, after two years of steady increases, house prices in Calgary are expected to stabilize in 2023. However, it's important to note that this stabilization doesn't necessarily mean a decline in prices. It signifies a shift towards a more balanced market, with prices leveling off after a period of growth.

One of the key factors contributing to the stabilization of house prices is the lack of supply. There is a shortage of available homes in Calgary, which has been driving up prices. This imbalance between supply and demand creates a seller's market, where sellers have the advantage in negotiations.

Market Status: Seller's Market

Based on the sales-to-new-listings ratio, the market status in Calgary is currently a seller's market, with a ratio of 87%. This indicates that there is high demand relative to the number of new listings. As a result, sellers have more negotiating power, and prices are generally higher. However, it's worth noting that the average home price in Calgary for August 2023 was $522,548, which is 3.1% lower than the previous month but 7.7% higher than the average price in August 2022.

Factors Influencing Calgary House Prices

Several factors influence house prices in Calgary, and understanding these factors can provide insights into whether prices are likely to drop or continue to rise in the future.

1. Economic Conditions

The state of the local economy plays a significant role in determining house prices. Calgary has a diverse economy, with industries such as oil and gas, agriculture, manufacturing, technology, and finance contributing to its overall stability. Fluctuations in these industries can impact job growth, migration patterns, and, subsequently, the housing market.

2. Interest Rates

Mortgage interest rates have a direct impact on housing affordability. When interest rates are low, buyers can afford larger mortgages, which can drive up demand and push prices higher. Conversely, when interest rates rise, buyers' purchasing power decreases, which can lead to a decrease in demand and potentially lower prices.

3. Supply and Demand

The fundamental principle of supply and demand also applies to the housing market. When there is high demand and limited supply, prices tend to rise. Conversely, when supply exceeds demand, prices may stabilize or even decline. The balance between supply and demand is crucial in determining the direction of house prices.

4. Government Policies

Government policies, such as regulations and taxes, can have a significant impact on the housing market. For example, changes in mortgage rules or regulations can affect buyers' ability to qualify for loans, which can influence demand and prices. Additionally, policies aimed at increasing housing supply or addressing affordability can also impact the market dynamics.

5. Population Growth

Population growth is an important driver of housing demand. Calgary has experienced steady population growth over the years, attracting individuals and families seeking employment opportunities and a high quality of life. Increased demand for housing can put upward pressure on prices, especially in areas with limited supply.

Calgary Home Prices in 2023 and Outlook for 2024

In August 2023, the average sold price for all property types in Calgary was $522,548, with detached homes averaging $707,337, semi-detached homes averaging $583,549, townhouses averaging $418,939, and condo apartments averaging $309,958, according to data from WOWA.ca.

Looking ahead to 2024, it's important to note that housing market predictions are inherently uncertain. Various factors can influence the direction of house prices, and it is challenging to make definitive forecasts. However, based on current trends and market conditions, it is reasonable to expect that house prices in Calgary will continue to stabilize in 2024.

While the rate of price growth may slow down compared to previous years, it is unlikely that we will see a significant decline in prices. The shortage of supply, strong demand, and the overall stability of the Calgary economy are factors that support this outlook.

It's important for both buyers and sellers to approach the market with realistic expectations. Buyers should be prepared for a competitive market, where multiple offers and bidding wars are common. On the other hand, sellers should be mindful of setting reasonable listing prices to attract potential buyers.

How to Navigate the Calgary Housing Market

Whether you're a buyer or seller in the Calgary housing market, it's essential to approach the market with a strategic mindset. Here are a few tips to help you navigate the market:

• Work with a Knowledgeable Realtor®: A professional realtor with a deep understanding of the local market can provide you with valuable insights and guidance throughout the buying or selling process.
• Get Pre-Approved for a Mortgage: Before starting your home search, it's important to get pre-approved for a mortgage. This will give you a clear understanding of your budget and help you make competitive offers in a fast-paced market.
• Consider Different Property Types: If affordability is a concern, consider exploring different property types such as townhouses or condo apartments. These options may offer more affordable entry points into the market.
• Stay Informed: Keep up with the latest market trends, economic indicators, and industry news. This will help you make informed decisions and adapt to changing market conditions.

Conclusion

In conclusion, the Calgary housing market is expected to stabilize in 2023, with house prices leveling off after a period of growth. While a decline in prices is not anticipated, the rate of price growth may slow down. Factors such as economic conditions, interest rates, supply and demand dynamics, and government policies all play a role in shaping the direction of house prices.

As a Realtor®, it's my goal to provide you with the most accurate and up-to-date information to help you make informed decisions in the Calgary real estate market. Whether you're buying or selling, it's essential to work with a knowledgeable professional who can guide you through the process and help you achieve your real estate goals.

If you have any questions or would like to discuss the Calgary housing market further, feel free to reach out to me. I'm here to help you navigate the ever-changing real estate landscape with confidence. To do so, check out our Contact Us page, fill out our contact form below, or visit our website AllCalgaryListings for more information. To browse active listings in Calgary right now, or use our free mortgage calculator tool, or get a free online home valuation, head on over to our website. You can also reach out to me directly at +1 (403) 774-7447, and I will get back to you shortly!

Want to see more helpful information like this? Want to always stay up to date on everything Calgary real estate? Check out our blog page for more, like The City of Calgary Council’s New Housing Strategy!