CREB® published its Q1 2023 Calgary and Region Quarterly Update on April 27, 2023. It compares the first three months of the year with an all-time record quarter in 2022.
Calgary quarterly benchmark price
Key findings
- Sales fell 43% from the record first quarter of 2022, when buyers rushed in ahead of rate increases. Activity is still well above pre-pandemic levels.
- New listings fell 40%, more than CREB expected.
- Inventory averaged 2,814 homes, 21% lower than a year ago and over 42% below long-term trends.
- The sales-to-new-listings ratio was 71%, with under two months of supply.
- The quarterly benchmark price rose nearly 2% from Q4 2022 to $531,200, below the Q2 2022 high of $544,733.
“Price growth to date has been stronger than expected,” said CREB Chief Economist Ann-Marie Lurie. With limited supply, she said spring could bring stronger gains and possibly a modest increase for 2023 as a whole. In January, CREB had forecast a small decline.
Our take: migration and jobs are keeping demand steady. Until listings recover, expect sellers to keep the upper hand.
Why sales fell so much
CREB says the steep decline in first-quarter sales was expected. In early 2022, buyers rushed to enter the market ahead of expected rate increases, which produced an all-time record quarter. Lurie said no further rate increases have happened so far this year, but higher lending rates and limited supply are both contributing to the pullback. Sales remain well above pre-pandemic levels, thanks to migration and a stronger employment market.
Supply is the main challenge
CREB expected new listings to ease because higher rates make it harder for move-up buyers. What surprised was the pace: new listings fell 40%, which prevented any significant improvement in supply given the relatively strong sales. Inventory averaged 2,814 homes in the first quarter, 21% lower than last year and over 42% below long-term trends. With a 71% sales-to-new-listings ratio and under two months of supply, conditions continue to favour sellers.
Prices: the decline has stopped
Prices rose sharply in the spring of 2022 and peaked at $544,733 in the second quarter. They trended down in the third and fourth quarters, partly adjusting for the rapid rise. In the first quarter of 2023, tighter conditions stopped that downward trend: the quarterly benchmark rose nearly 2% from the fourth quarter to $531,200, but it is still below the second-quarter high.
A change in tone from January
In its January forecast, CREB expected 25,921 sales in 2023 and an annual price decline of less than 1%. Lurie now says price growth has been stronger than expected and that, with limited supply, spring could bring stronger gains and “potentially” a modest annual increase in 2023. That is a notable shift for a forecast that is only three months old.
Practical takeaways
- Buyers: waiting for prices to fall has not worked so far this year; decide based on your own budget and timing.
- Sellers: low supply supports prices, but buyers are sensitive to rates, so overpricing can still cost you time.
- Everyone: CREB’s mid-year update will show whether the forecast changes officially.
What the quarter looked like month by month
January started slowly, with new listings at their lowest since the late 1990s and the benchmark ending a seven-month slide. February brought the lowest February inventory since 2006 and a 73% sales-to-new-listings ratio. In March, inventory was again the lowest for the month since 2006, and the detached benchmark reached a record $649,800 while row homes also set a new high. Each month the story was the same: buyers kept coming, but sellers did not list enough homes to give them real choice.
