GLASS HALF FULL?
If you’re stampeding this week, that glass isn’t full for long! Especially at these glorious temperatures. We hope everyone is enjoying some patio or deck time this weekend! In between festivities, we’re taking a look at recent stats and their implications for real estate investors. Which side are you on? Glass half empty or glass half full?
We’ll start with everyone’s favourite home sales update. Calgary just had it’s best 6 months EVER for sales. Glass half full! June sales decreased from May by 7% and from June of 2021 by 2.4%. Glass half empty. But row houses and condo’s saw their sales surge year over year by 35%. Glass half full again! Home prices overall are down slightly from May, but year over year prices are up 8-19%, depending on where in the city a property lives. Hmmm, both empty and full?
This could probably become a drinking game, that could last an hour or more. My point is simply to look at the BIG picture, not just any one statistic (or headline). Yes, rising interest rates appear to be cooling the market, with specific decreased demand in the detached market. Yes, buyers can now take their time again. And yes, it appears that Calgary had a very early spring market, before the feds did their thing (just saying!).
And now, let’s look at the job news. Alberta’s June unemployment rate is down to 4.9% (from 5.3% in May). Wait for it … that’s our lowest unemployment rate since 2015 AND we’re the same as the national average? Glass half full! Canada lost 43,000 jobs, but Alberta added 2000 jobs (down from 16,000 jobs added in AB in May). Hmm, more empty than full? Depends on your address? Calgary’s unemployment rate was down to 5.5% in June, from 6.6% in May. Edmonton’s unemployment rate was also down to 5.9% in June, from 6.2% in May. Yahoo!! Sorry, official Stampede lingo snuck in there. Average hourly wage growth nation-wide was about 3.9% in May, and up to 5.2% in June. This little stat is part of what leads economists towards recession fears and thoughts (together with inflation, and all their other beautiful charts and graphs). Uh oh, half full, maybe less.
Is your head spinning yet? Us too!
Bottom line for real estate investors in Calgary and Alberta? A LOT of people are employed, if they went looking for work. Big improvement over, let’s say 2016-2018? A LOT of good news with home sales and pricing, but no more double-digit multiple offers. We think some sellers will become impatient, and some buyers will get amazing deals. We think there is an abundance of employed tenants for rental properties. Many people throw around the Calgary vacancy stat of less than 1% vacancy, but I can’t find that figure proven anywhere. Let’s just say that Rental Housing Providers can take a minute to do some diligence.
We continue to be optimistic in our corner of the world, but it sure does take discipline to shut down the noise from other markets, provinces and national stories/stats. Personally, we like a slightly slower market to give us time to choose wisely. And these days, we still believe hard assets, like real estate, are a great investment in inflationary times.
Happy Stampeding to all our local friends and family! Hope your glass has something tasty! And refills?
We love having choices for our real estate partners! Follow us @MtnEdgeDevelps for updates on local news and events – as they apply to real estate investors.
