Written by Alan Kelly, Bōde’s Chief Economist
To understand what’s happening in the real estate market you have to look at supply and demand.
The best proxies for supply and demand are:
Supply
- New supply: New Listings (i.e. the number of homes recently listed for sale)
- Total supply: Inventory (i.e. the total number of homes listed for sale)
Demand
- Sales (i.e. the number of homes recently sold)
Supply & Demand
- Months of Supply (i.e. the number of months it would take to sell all current inventory at the current rate of sale)
These metrics are the best indicators of the health of the real estate market. Let’s look at what they show us.
Edmonton continues to see demand outpace new supply in the aftermath of the COVID-19 outbreak.
New listings in February were up 5% while sales were up an incredible 53% vs. the previous 3 years. Sales continued the strong trend they’ve been on since June 2020. We expect sales to continue to stay higher than usual for all of Spring 2021.
This is the 9th consecutive month of exceptionally strong demand in Edmonton.
As a result of sales outpacing the number of new listings, the total number of homes for sale is down 21% compared to the average of the previous 3 years.
The combination of less supply and more demand has sent ‘months of supply’ even lower to just 3.5 months which is down 48% vs the previous 3 years.
Fewer months of supply generally makes conditions more favourable for sellers, while higher months of supply is more favourable for buyers.
Overall, Edmonton prices have been slowly increasing since December 2019, however they have levelled off in recent months.
What does this mean for sellers?
Right now supply is low relative to previous years, and demand is high which means it is a good time to sell your home. Sellers who price their home well will be able to sell quickly. However, your specific property value will be determined by market forces both within your community and against similar active listings. To find out what supply and demand look like for your community, click here.
What does this mean for buyers?
There are currently fewer homes for sale than there have been in previous years. This means active buyers need to move fast to beat other buyers to available listings. One way you can move faster is by booking viewings directly through Bōde, so you don’t have to wait for a realtor to schedule your viewings.
Market conditions vary substantially by property type, community and price range
Above, we’ve looked at the overall markets for Calgary, but different segments are performing very differently. Let’s look at a few examples.
Sales for detached homes were up 64% in February vs. previous years, while new listings were down 2%.
Detached homes have generally been the best performing property type since the start of the COVID pandemic.
Detached prices have been slowly increasing for the past year, although they have been flattening in recent months.
Apartments:
New listings and sales of apartments were both up 18% in February compared the average of the previous 3 years.
However, apartment prices continued the downward trend they’ve been on since 2015.
New listings of attached homes were up 11% while sales were up an amazing 74% in February (compared to previous years).
However prices for attached homes have remained relatively flat in recent years.
In general, you’re in a much better position if you’re selling a detached or attached home right now compared to an apartment, due to less supply and greater demand.
However, what really matters is what’s happening in your specific local property market. There are some communities and price bands where detached homes are performing better/worse, and the same goes for apartments.
It’s critical to understand the dynamics in your local property market
To understand your local property market, you need to look at your local data. Head over to Bōde’s Market Data dashboard, the only place where you can see all the data yourself, including being able to filter on community, property type, and price range to see exactly what’s happening where you live.
You can also see the sold price of any home that has sold in the last 10 years using Bōde’s Sold Data Page.
