Half way through 2021 and our Real Estate has been on a rocket ship – in this report we will find out how we finished off the first half of the year!
THE SALES SUMMARY
As we release this update Calgary is just coming off of an incredible heat wave that found us breaking some 125 year old temperature records…So I guess it's only fitting that we’d continue this talk about record breaking here in our July Market Report.
We are here to report that June 2021 broke all prior June sales records in the Calgary Area. Our Calgary sales “broken record” keeps spinning as it has almost the entire first half of 2021!
We had 2915 sales in the month of June, eclipsing the next best June, back in 2006 by about 200 sales (or in other words, by over 7%). We didn’t just break it - we smashed it! This is only a slow down of 74 sales from our incredible month of May.
Here you can see the graph bringing us back the last 15 years. The “red line” shows just how strong of a month we had. Again - impressive to say the least!
In this graph you’ll see how we performed versus 2020. The red line is this year, the blue is last year.
As you’ll notice - This is the part of last year when sales were picking up nicely as we were rebounding out of the bottom of the pandemic slow down.
And then again here shows this in a slightly different way. I would expect as we continue past our peak months of the 2021 the sales per day figures may start to match those of 2020 as our “spring annual sales cycle” was pushed back.
All things “sales” considered; we have just put a cap on the most impressive sales quarter of Calgary’s history.
Ever since April 3rd we’ve been seeing an average sales per day pace of over 90 homes a day - this is a blistering and historic pace.
I do expect this to start to adjust seasonally as it does each year and we should expect a steady weekly decline all the way from now till end of the year.
THE INVENTORY STORY
We started the month of June with 6783 total homes on the market.
This was about 13% more total inventory than we had a year the prior year.
We now finish off June 2021 with 6921
Only a slight increase of 150 homes active on the market. And now only with a 7% increase over last year.
This is again due to 2021 following the typical seasonality of the real estate market, and 2020 was just starting to play catch up.
Here is the CREB graph showing how our total inventory stacks up against the last 15 years as well. This gives us a lot of perspective of how things are in relation to what we historically expect them to be.
Looking closely at the graph you’ll see there were only 4 months of June in the last 15 years that had more inventory than we do today.
This again echo’s the message we’ve been sharing to everybody while the market has been “headline filled with hot hot hot” messages that we are not in a low inventory situation. It's this that has saved us from being over inflated like so much of North America.
This graph shows the “listings per day” figures as we complete June.
What you will notice is the “seasonality” trend we’ve been referring to very clearly here. The “peak” new inventory months are now behind us.
As long as sales per day progress gradually down from our peak selling month, we will continue to see less & less total inventory on the market.
Here again we’ve shown this, however starting back from Jan 1st of this year.
This shows you that we have had sustained high new inventory for quite some time now...and we are only now starting to see the listing per day figures drop to levels we say back in February of this year.
This is exactly as we’d expect - and exactly what we want to see to maintain a healthy market.
THE PRICING PICTURE
First, the average benchmark sale price in the month of June was $458,300
This is an increase year over year of 11.43%
This is a month over month increase of just under 1%.
As we mentioned last month - we basically rolled back the clock on our overall benchmark sales price - erasing all losses we had occurred from our prior peak in 2014.
And with this recent month over month increase we inch towards all-time peak benchmark sales figures. The recovery is near fully executed! But here is the key...
We’ve done it in a sustainable and healthy way - we’ve done it with actual fundamentals and without feeling like there is some “bubble bursting” that you’ve likely heard so much talk about.
That is not here. Our supply & our demand has risen naturally upwards, our sales to list price ratios remained healthy and our pricing is appropriate - not reaching.
We are very confident in the place the market has risen to as somebody that studies our hyper local market as often as we do.
So feel confident Calgary - We do!
Here is the graph that shows how this has changed across the various districts in the city.
On top of pure pricing, the average sales price to list price ratio in the city was 98.4% .
This again shows the health of our market - and that these increases are natural and warranted, not made-out-of thin air.
Okay, at this point we’ve covered the sales summary, the inventory story and the pricing picture. But we wanted to touch on one more thing again as we always do, the pace of our market as we trend into the back half of the year.
1. Sales to New Listing Ratio
The higher the ratio, the faster and stronger the market is.
On June 1st we had a sales to new listing ratio of 76% (really strong). On June 30th - we finished with 80%. Even stronger.
You might be wondering – I thought you said sales were starting to decline, so shouldn’t this be lower…
Well yes, sales are starting to decline...but so are listings per day remember. Right now the buyer demand is continuing at a stronger pace than the new listings coming to market pace is right now.
When this happens, the market gets tighter even though sales may still be dropping.
This keeps pricing in check - and helps our market to keep up it's house values, rather than the versus where they could start to adjust downward.
This has been consistent across the board for all property types as well.
2. Months of Supply
And the second thing about pace, is the Months of Supply. In this case, the lower the number - the faster the number.
As you see June started with 2.3 months of supply - we ended June at 2.5.
The month of supply takes into account the total inventory we have on the market and we divide that by the current number of sales.
We as we hit “peak” inventory levels as discussed - and we are about 2 months past peak sales figures.
So with sales starting to slow - we will see our months of supply remain higher as we cascade slowly into the less busy seasons of our year.
It's natural - nothing to concern yourself with.
Our current “days on market” average has resulted in the Days’ on market reducing now all the way to 34 Days on market, up just 2 days from May. This is a 38% reduction from this same time in 2020.
As a final summary for you all today…
Take a look at this buyer demand graph below…
Buyer Showings precedes sales showing up. So as expected - Calgary is rolling into it's Summer. Our Stage 3 re-opening plan is coming into effect and our local world is going to start enjoying life & thinking less and less about it's real estate as a result.
If you are buying....you will start to feel like the pressure is off a bit and the market pace will be slower for you to make a great buying decision. And remember there is lots on the market to look at - only 4 months in our history to date have had more inventory to look at in this point in the year as you do now.
Sellers, well - this is not the peak anymore - and your pricing strategy will be more important than at any point of the year. Be sure you have a realtor that understands this and couples it with a kick ass marketing plan to get you the right price for your home.
If you need a recommendation, we would be happy to help and if you have any specific questions please don’t hesitate to reach out.