I know, the real estate expression is supposed to be “location, location, location.” But this is Calgary (or just about anywhere in Alberta) and it’s 2019.
CMHC is reporting the highest number of unabsorbed inventory ever recorded. Translation: there are more brand new homes available to purchase in Alberta today than ever before (well, they mean since they started measuring and recording this data). Edmonton has 56% of these homes! Calgary’s numbers are a little better; Calgary has 1986 completed new homes waiting for purchase. When you dig into the Calgary numbers, that’s a 1.6% decrease since Feb of 2018, and a 0.2% increase since January. In my opinion, that suggests things are basically unchanged over the past year in Calgary (at least it’s not worse, right?!). And remember, these stats only talk about the brand new build homes—it doesn’t include any of the mature homes on the market.
So what?! The news has been full of these stories for a long time now.
Well, high inventory = high supply. We know demand hasn’t moved yet. So the only possibility is for prices to decrease. Calgary home-builders are now referring to this as a “dismal downward trend” in their latest press release. And in fact, sale prices are down 6.2% from February of 2018 through February of 2019. So if you’re a homeowner who needs to sell, this is tough news. And many Albertans are reaching the end of their emergency fund, their savings, and even their credit. Selling a home can really help some Albertans today.
So what?! You ask again? Well if you’re an investor, your product is on sale!! This is all part of the natural cycle in any market, and especially in a real estate market. As investors we have not caused these problems, and there isn’t any need to “take advantage of desperate sellers.” Even buying houses at TODAY’S market value, means getting a good deal. Basic math tells us that when we buy houses for less, and charge even the same rent as a year ago—we improve our ROI. Our invested dollars are already leveraged, and now they’re working even harder to earn more dollars.
When it was 2014, and houses were selling faster than the lawyers and bankers could process them—how many investors “wished” they had bought homes back in 2008, 2009? Now investors literally have their choice of the best products that fit their investing style.
To summarize: investors have time, choice, negotiating power, low interest rates and price on their side. I hear opportunity knocking! Or will it be 2024, and will you be one of those investors “wishing it was 2019 again?” To receive updates on property deals, connect with us at https://mountainsedgedevelopments.com or on Facebook @MtnEdgeDevelops.
