Browsing real estate statistics for the last month of 2020 an observer cannot help but identify some major shifts have taken place. First of all, inventory is a lot lower and sales are up. This puts a floor in pricing and perhaps upward pressure. Forget seasonality of pre Christmas delisting, buyer preference changing, and pandemic delays in spring, a 40% year over year increase in sales is a big headline.
It is way too early in the year for a raspberry market update, but is this a blip or is 2021 a totally new market? Now that the government has created an economy where interest rate increases are basically impossible, a lot of money could flow in the direction of class A property. This makes the detached sector a winner, and in the infill market, there isn’t enough good shovel ready land. There isn’t enough places where detached homes can be built and the cost of entry in the r1 communities is really high. Anytime an existing home with some value is demolished and a new larger home is built, the net supply change is zero. If anything it shifts the housing stock drastically upmarket because the new home is built on land worth over $1/2m, and an end of life home, often a suited rental (i.e cheap housing) is demolished.
This market data is really worth watching as we burn through winter (January to March) and get into the prime real estate season (April to June) In calgary. I’ve started 3 new detached homes and have a couple planned for starting later in the year. A little optimism to start the year!