Have you seen it? The doom and gloom in the media about Calgary’s housing supply? And yes, if you need to sell your house in the next 6 months, it will be tough! However, the opportunities for real estate investors to acquire long-term buy-and-hold properties are nearing the ideal point in the real estate cycle.
First, what are the facts? Based on the June, 2018 CREB Report, here’s the latest stats:
- Sales are down 11% below last year (this is a measure of volume of sales). And overall, sales are 12% below the long-term average for Calgary
- New listings are up to 3869, a 3% rise since last year at this time. However, the total listings are up to 8820, a rise of 32% since last year at this time
- The average Days on Market (DOM) is now 46 days, up almost 20% since last year.
- The above stats mean that the overall housing supply is now at 4.7 months of inventory—this is up an astonishing 49% since last year!
- The city-wide benchmark price in June was $436,500. Suprisingly this is only 1.13% below last year’s prices.
Supply and demand is currently suggesting a very strong buyer’s market. Every day we hear more stories of investors buying homes well below their current appraised values. We even saw an MLS listing today advertising a home for $55,000 below the city-assessed value (list price $450,000). That’s before negotiations even begin!
How often does real estate actually go on sale?
Calgary is moving through the real estate cycle, nearing the end of a slump. The economy, the jobs, the rental vacancies are all improving slowly but steadily. The economic recovery won’t be felt in the real estate market immediately. The Real Estate Investment Network’s research suggests it takes an average of 18 months after GDP growth, before home prices start to rise. We think home prices may fall further in the next 6 months.
What this means to you? Calgary is near to an optimal time to acquire long-term Buy-and-Hold properties. Next week we’ll be talking about how to get started on your real estate investing journey.
