If you are in a competing bid situation, it is important for you to know your negotiating position. You need to know how many offers are coming in, what you can afford, and what risks you are willing to take. When it comes to submitting a competing bid, you must be aware of which conditions need to be in the offer for your specific situation and which ones you can risk not having on the contract. An experienced real estate professional will help assess and communicate the benefits and consequences of each variable   to help safeguard your interests.

In Vancouver and Toronto there were lots of subject-free competing offers, Calgary has seen fewer. I would only be comfortable presenting a subject-free offer if my client is a sophisticated buyer who fully understands the ramifications of that type of offer..

Whenever I have a client considering entering a competitive bid situation, I ask, “What price will you feel good about and not regret, regardless of which way it goes?” I want to ensure if they lose the bid, they won’t feel like they should have paid an additional $5,000, or if they win the bid, they don’t feel that they’ve paid $10 000 too much. To help the client make that decision, we provide our clients with research about what similar properties have sold for in the area. It is always the client’s decision.

Have a question you would like answered?

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It depends on why the new homeowner is buying. If they are buying because they see the long-term benefit of owning their own homes and they are ready to make the change from renting to home ownership, then buying may be a good choice because of the low interest rates. However, I would recommend they find a good real estate professional who can discuss their personal situation to determine if now is the right time for them or not. In June, we started seeing price reductions and homes coming off the market then coming back on, both are signs that the market conditions are changing.

If they are buying because they want to see a capital increase in a short period of time to make a quick buck, now is not the time to buy. It is likely that we have already seen peak prices. As inventory increases the prices will level off.

When the pandemic has passed and the balance between supply and demand results in prices levelling off, it will be a good time for new homeowners to start looking. In a more stable buying climate, they may not have to compete with others when writing an offer so they can take more time making the right decision for their families.

Have a question you would like answered?

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Alberta is still largely dependent on the oil and gas industry for its economy and the North American political leaders are taking an anti-oil policy stance, so recovery may be slow. The city is starting to attract sustainable energy companies.

However, it will take decades for sustainable energies to significantly increase jobs in the province due to this sector being relatively new. We have seen growth in the technology and health care sectors which bodes well for the economic future of our economy.

Have a question you would like answered?

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To judge where a market has been and where it is going, I analyze the absorption rate. Simply put, this rate measures how many properties sell in comparison to the number of properties for sale during the month. As I track this metric over time, I can see the balance between supply and demand.

Let’s look at the largest market segment driving Calgary’s real estate growth, detached homes. In March, the absorption rate was 77.46%, which means 77.46% of all homes for sale in the month of March were sold. In April, the rate dropped to 73.60%. In May, the rate dropped to 59.77% and in June the rate dropped even further to 55.78%. This signals a reduction in demand during normal times, however, in today’s environment this does not mean the demand is shrinking. The buyers are still there, they just have more to choose from as more properties have come onto the market. This is a normal occurrence after a super-heated market like March’s because people realize that they can get a good price for their home. This year it’s a bit different because along with the natural interest in getting the best dollar for a property, those sellers who would have sold in 2020 but were hesitant to list are now listing their homes because they feel safer due to Covid-19 safety protocols and vaccinations.

The next few months will be telling for the Calgary market. If the detached home absorption rate falls below 40%, we will see prices level off and potentially go down a bit.

Have a question you would like answered?

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The reason all the real estate markets in Canada went a bit crazy was because two events happened simultaneously. First, we had a pandemic. Many potential sellers chose not to sell their homes because they didn’t want people bringing the coronavirus into their environment which caused low inventory. The lowering of inventory occurred when interest rates were at their lowest ever levels making borrowing money cheaper, thus increasing the demand in the market.

When you have low supply and high demand, prices are pushed up as buyers compete for the limited number of properties.

Experts were a bit mystified about why Calgary’s real estate market was so strong. Other Canadian cities like Vancouver and Toronto have immigration and migration of citizens looking for jobs in diverse labour economies to support the demand for homes. Calgary’s current economic prospects are not as strong, so the reason for the run-on real estate was the low cost of borrowing, a desire to be isolating and working in a bigger home, and the housing market’s low inventory. As a result, Calgary didn’t see the increase in prices as early as the other cities and the market is cooling down sooner.

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Susanita

Real Estate is a constantly changing industry!

Keeping up with all of the rules, regulations & market updates are things that your professional REALTOR® is equipped to handle.

In fact, it’s part of our daily practice. We subscribe to several industry regulation bodies, local real estate boards, social media groups, etc. in order to keep up to date and collaborate with colleagues around the globe.

This blog category is dedicated to sharing answers to many common Real Estate questions we are asked.

We hope you find the information valuable and we welcome your questions any time!

Please feel free to send us a note on our Contact Coldwell Banker Complete Real Estate page and we’ll be happy to get back to you, and possibly post your Q&A for others to learn from.

Thanks for visiting! Click this link to read all of our: Calgary Real Estate Questions & Answers

Sincerely,

Susanita de Diego

Price growth slows as supply to demand balance improves

City of Calgary, August 2021

Welcome to the second edition of TRANSITIONS Magazine!

This publication is all about the family dog! We have articles and quizzes to test your knowledge and help you to determine which breed of dog is best for you and your family. Of course you will also find links to trending real estate news and our newest column – “Ask Susanita”!

Enjoy!

Click on some of the highlights we have linked below.

Featured Articles:

Choosing a Family Dog
Getting Ready for Puppy

Most Recent Real Estate Market Reports:

Market continues shift toward more balanced conditions after torrid start to the year – August 2021 Real Estate Statistics Report

Price growth slows as supply to demand balance improves – July 2021 Real Estate Statistics Report

Supply trends up but market still favours the seller – June 2021 Statistics Report

Inventory rises, but sellers’ market conditions persist – May 2021 Statistics Report

Demand for homes remains high with record sales in April – April 2021 Statistics Report

Ask Susanita!

Why did the Calgary Real Estate Market go crazy in 2020 and 2021?

Where will Calgary home prices go next?

Is now a good time for new buyers to get into the Real Estate Market?

Does Calgary’s economy support a sustained housing market increase?

What do you need to know if you are in a competing Real Estate bid situation?

Watch for our Fall/Winter edition to be released soon!

If you or someone you know has any real estate questions, we’d love to help!

Contact us here: https://www.cbcompleterealestate.com/contact

OR

Phone: 403-686-1455

Email: info@cbcalgary.ca

Thanks for reading!

Supply trends up but market still favours the seller

City of Calgary, July 2021

Calgary’s housing market is showing few signs of letting up, as sales reached 2,915 units in June – a record high for the month.

“It is taking time for supply to catch up with the demand in the market,” said CREB® chief economist Ann-Marie Lurie.

“Through the early spring market, many buyers did not have a lot of choice, but the recent improvements in supply are providing more options for those purchasers and supporting the strong sales we continue to see in June. At the same time, gains in inventory are taking some pressure off the market as it starts to trend towards more balanced conditions.”

New listings in June totaled 4,135, the second-highest level ever recorded for the month. This caused inventories to trend up to 6,918 units. While this is higher than longer-term averages, it was balanced by strong sales and the months of supply remained relatively tight at 2.4 months. However, this is still an improvement from earlier in the year when the months of supply was below two.

As the market moves toward more balanced conditions, we are also starting to see the pace of price growth slow. The benchmark home price continued to trend up in June, but the monthly gain slowed to less than one percent. While the pace of growth is slowing, as of June, the benchmark price was 11 percent higher than levels recorded last year.

 
View the full report here: June Statistics Report
 

Inventory rises, but sellers’ market conditions persist

City of Calgary, May 2021

With 2,989 sales, housing market activity hit a new May record.

Despite strong levels of sales, they did trend down relative to last month. Additionally, there were 4,562 new listings, causing seasonally adjusted inventory levels to increase over last month.

“The recent gains in prices have encouraged more homeowners to list their homes and take advantage of the current market situation,” said CREB® chief economist Ann-Marie Lurie.

“However, the inventory gains are still not enough to offset the demand growth and the market continues to favour the seller. Prices are rising, but they are still recovering in our market from previous highs in 2014. Only detached and semi-detached home prices in certain districts and communities have recovered to the level of previous monthly highs.” The months of supply did trend up slightly this month to just over two months, but it was not enough to halt the upward pressure on prices. The unadjusted benchmark price in May reached $455,200. This is one per cent higher than last month and nearly 11 per cent higher than prices recorded last year.

Sales have been rising across all product types, but homes priced above $600,000 represent a larger-than-usual share of all sales. The upper end of the market only reflected 16 per cent of city sales last May, compared with this year where it now reflects nearly 26 percent of all sales.

View the full report here: May 2021 Report