Sellers’ market emerges as more homes purchased above list price in Calgary

Saturday, February 13, 2021   /   by Sergey Korostensky

Sellers’ market emerges as more homes purchased above list price in Calgary

Resale homes figures for Calgary from January were already pretty sensational, but it’s the last two weeks of the traditionally slowest month of the year that really stood out, according to a local realtor.

“Everything changed in those last two weeks,” says Tim Jones, realtor and broker/owner of Re/Max Prime. The first two weeks of the year were pretty typical for the season, he says. But after that, “it just went crazy.”

Following with the trend from the end of 2020, single-family home sales have driven the market. That was indeed the case for the last half of the month.

While sales grew about 42 per cent for the month, year over year, they increased 47 per cent in the last two weeks. All told 507, homes sold in the last two weeks out of the 732 single-family homes sales for the month.

What’s really striking, Jones adds, is so many sold close to or above listing price. Almost one in five sold for listing price or higher, and nearly a third sold within 1 per cent of listing price.

“That’s massive,” says Jones. “To sell at list price or higher, pretty much all of them would have had competing offers.”

He points to a shift from recent years, in which Calgary’s market favoured buyers.

Figures for the same span last year saw only 345 single-family homes sell, with about nine per cent purchased at list price or higher. In 2019, 337 sales occurred with about six per cent selling at listing or higher.

“Experienced realtors are all wondering what the heck is going on?” he says, adding the industry is cautiously optimistic.

Chief economist Ann-Marie Lurie with the Calgary Real Estate Board notes for all of January 104 sales occurred over list price, or about nine per cent of all sales, with most last taking place in the final two weeks.

“Traditionally, we do see those levels a lot lower, so there is definitely a lot more activity than normal,” she says.

She further notes much of the price appreciation is a result of vey low inventory levels. Months of supply was 2.3 for the single-family homes segment, down 53 per cent year over year.

“Anything under $500,000 is basically under two months of supply, which is really low.”

In fact, Lurie says tightness in the low-price ranges can actually slow sales, while pushing up prices.

For the last two weeks of the month, sales for the under $400,000 range grew 11 per cent over the same period in 2020, while sales in the $400,000 to $600,000 range grew by 52 per cent, and $600,000 to $800,000 jumped by 65 per cent, Jones says.

Sales even improved in the luxury market.

Overall, the benchmark price was up three per cent for single-family homes for the month, CREB figures show. Jones notes for the last two weeks the increase was more than seven per cent. But that figure is closer to five per cent when home sales over $1 million are excluded, which make up about five per cent of the market, he adds.

Still, realtors recognize many homeowners might remain reluctant to sell because their home values may still be below original purchase price.

“But prices have come up a bit so we might see more inventory,” Jones says.