What to expect in the Calgary real estate market in 2023 and how to make an informed decision.
When it comes to real estate markets, no one has a crystal ball. Real estate markets — like all markets — are inherently unpredictable.
While it’s difficult to forecast market behaviour with certainty, what we can do is make reasonable projections that help clients make informed decisions based on each buyer’s needs and circumstances.
So, what constitutes an informed decision?
We tell buyers and sellers to consider three essential things when weighing the pros and cons of potential real estate choices:
Let’s take a closer look.
- Consider any cautionary factors;
- Get up to date with current trends in the local market;
- Take into account your individual circumstances.
Cautionary Signs to Keep in Mind
While consumer confidence in the Calgary real estate market is strong, there are still mixed signals about where the market is headed in the next 12-18 months.
Much will depend on what happens with interest rates.
Interest rate hikes continue to stifle the appreciation of average home prices, with projected growth sitting reasonably flat or a +/- 2% price change in 2023. So even with strong consumer confidence, home values aren’t likely to appreciate much in the short term.
In addition, it is always important to remember that local real estate markets are tied to the global economy.
Even strong consumer confidence can wither quickly based on what happens in international markets, especially in the United States.
Prevailing Trends in Calgary
Despite these cautionary notes, we should be optimistic about many prevailing trends in the Calgary market.
Firstly, the city’s population growth is beginning to accelerate. More affordable housing, competitive tax rates, cheap start-up costs for new businesses, and a revived oil and gas industry are attracting newcomers from across Canada who want to purchase homes in the city.
Second, inventory is low, and supply/demand ratios in the resale market are the tightest they have been since February 2006. In the early months of 2023, we are seeing a more substantial pullback in new listings that may be tied to low inventory — i.e. homeowners may be tentative about listing a property when they know inventory is low and buyer competition is high.
In new home construction, sustained demand has prompted housing companies to hold on to higher prices to maximize their profit margins.
All of this means that Calgary home prices have fared reasonably well, particularly when compared to other major markets like Toronto and Vancouver.
What about you?
We tell clients the most important things to consider in any market are their individual needs and circumstances.
Right now, it’s a great time to buy — so long as you are comfortable holding onto the property for the next 5+ years and don’t overextend yourself.
Suppose you are a prospective buyer priced out of the Toronto or Vancouver markets. In that case, the Calgary market may be a viable option where you can capitalize on more affordable housing compared to the average income. That said, don’t let the fear of missing out compel you to purchase beyond your means.
Townhomes and condos are showing resilience in this market. So if you’re looking for a more affordable home, or downsizing or right-sizing, this might be a better option.
And it’s important to remember that with lower inventories, finding the right house that checks all of your boxes might take a little longer than expected. So, if you want to make a quick purchase, you may have to compromise on price.
Ultimately, doing this kind of due diligence will help you make an informed decision about whether or not a real estate move is right for you in 2023.
Need some additional help making an informed decision for 2023? Don’t hesitate to reach out.