Detached sales under $600,000 halve as Calgary’s entry-level supply dries up

One number in CREB®’s July 2024 report explains a lot about Calgary’s detached market. Sales of detached homes priced below $600,000 fell 50% from last July.

Calgary detached sales, July 2024 vs July 2023

Why sales fell

• Inventories and new listings continue to fall for lower-priced detached homes, so there is simply less to buy.
• Sales above $600,000 rose 15%, which was not enough to offset the decline, so total detached sales fell 8%.
• Year-to-date detached sales are down just over 1%.

The wider picture

Detached inventory rose to 1,950 homes and supply to nearly two months, which helped keep the benchmark price at $767,800, similar to June and 11% higher than last July. But almost all the extra supply is at higher prices.

A year ago, CREB reported that 24% of detached inventory was priced below $600,000. With the benchmark now near $770,000, homes at that level are increasingly rare.

What it means: for a detached home under $600,000, look at older homes needing work, the city’s more affordable districts, or nearby towns. Otherwise, a semi-detached or row home may be the realistic next step.

How the shortage built up this year

The 50% drop did not come out of nowhere. CREB’s monthly reports traced the squeeze all spring. In April, new detached listings priced below $600,000 were down 34% from a year earlier, even though detached listings overall were up 10%. By May, homes priced below $600,000 made up only 13% of detached inventory. In June, the decline in sales reached higher: sales of detached homes below $700,000 fell, while those above that level rose. July’s figures show the result of months of shrinking supply at the low end.

Prices have moved the goalposts

Calgary detached benchmark price, February to July 2024

The detached benchmark price rose from $721,300 in February to $767,800 in July. Each month of gains pushed more homes past the $600,000 mark. July was the first month this year when the benchmark was essentially flat, as supply in higher price ranges improved and months of supply reached nearly two. That stability helps buyers above $600,000, but it does little for buyers below it.

The alternatives

Buyers with a budget below $600,000 are turning to other property types. The semi-detached benchmark was $687,900 in July, so most semi-detached homes are also above that budget, but row homes, at $464,200, and apartments, at $346,300, are well within it. Nearby towns are another option: in May, the detached benchmark was $651,000 in Airdrie and $667,700 in Cochrane, still above $600,000 but closer to it than Calgary’s level. Within the city, the East district, the most affordable, had the tightest detached supply in June at one month, so competition there is strongest.

Practical takeaways

If you need a detached home under $600,000, be ready for older homes, smaller lots or homes that need updating, and act quickly when one appears. Set up instant listing alerts and get a full pre-approval before you start. If you can be flexible on the type of home, a row home or a larger condo may give you more space for the money and less competition. Owners of lower-priced detached homes who are thinking of selling are in a strong position, because there are many more buyers than homes in this range.

Why the total still looks healthy

Total detached sales fell only 8% in July, and year-to-date they are down just over 1%, because sales above $600,000 rose 15%. That can hide what is happening at the entry level. Detached inventory overall rose to 1,950 homes and supply to nearly two months, which sounds like a more balanced market. For buyers with a larger budget, it is. For first-time buyers hoping for a detached house, the July report shows a market that has become even harder, not easier.