What will the 2021 Economic Climate bring to the Calgary Housing Market?
The year 2020 was meant to be a hopeful one for the Alberta Real Estate market. After years of decreasing prices and high inventory levels, it seemed as if Calgary was on an upward trajectory. Then, struck by the global pandemic in Spring 2020, sales ground to a halt. However, it was short-lived, and the market made an impressive rebound as people realized how, and where, they lived mattered.
As we settled into life with Covid-19, our homes became extremely important to us. We often think of Faith Popcorn’s term “Cocooning” coined in 1981, to best describe what has transpired over the past year. This term seemed ahead of its time, but most accurately sums up our pandemic lifestyles and the need to protect oneself from the harsh, unpredictable realities of a chaotic world.
Whether you are Buying, Selling, Renovating, or Renting, here are the top real estate trends you need to know to guide you through 2021.
Real Estate Trend #1: Inventory Shortages
Yes, that is right, the Calgary market currently has a supply shortage with inventory down over 30% in January 2021 compared to last year. Low inventory means you need to be able to move quickly when looking at homes and desirable homes will move fast. Buyers need to make sure they are pre-approved for a mortgage ASAP. Sellers, you may find yourself in the driver’s seat and perhaps even fortunate enough to have multiple offers, potentially over list price.
Real Estate Trend #2: Home Prices will Rise
As COVID-19 vaccines roll out, and Alberta’s economy continues to diversify, we should see a boost in job creation and, in turn, a boost in the housing sector. Low inventory levels will naturally cause prices to rise as demand outstrips supply.
Real Estate Trend #3: Calgary Acreages and Small Towns will Surge in Popularity
The increase in people working from their homes during the pandemic will continue and many employees may not return to their offices. Instead of going downtown every single day, why not live further out in a more tranquil setting, enjoy a larger home and the benefits of a small town such as Cochrane or Bragg Creek?
Real Estate Trend #4: Millennials are Buying
Record low interest rates are pushing millennials off the sidelines who have been renting for years. They are approaching an age where they are starting families and trading their urban lifestyles for the suburbs. Many will be asking themselves, is 2021 a good time to buy real estate in Calgary? And of course the answer is yes, with record low interest rates and a push to continued working from home.
Real Estate Trend #5: Immigration to Canada will Increase
In October, the federal government announced its plan to add more than 1.2 million immigrants over three years, a significant jump from years in the past. Immigration is important to the Calgary housing market both indirectly, as it supports economic growth, as well as directly through increased demand for housing. Royal LePage research, shows that newcomers to Canada typically rent for three years before buying, after which they have a measurable impact on overall housing demand. An increase in immigration supports not only the resale market but investment demand for rental homes.
Real Estate Trend #6: Mortgage Interest Rates Continue to be Low
The Bank of Canada has pledged to keep interest rates low until 2023, a promise meant to keep borrowing cheap and help stimulate economic activity amid the coronavirus pandemic. It only makes sense if you are at all considering a purchase in 2021, contact a Mortgage Broker now and take advantage of record low interest rates. Most major banks will be more than happy to lock in a rate for up to 120 days!Posted by Kirby Cox on