Calgary Real Estate Market Review for October 2008

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October 2008  was a volatile month in many respects, all of which affected Calgary real estate.   From the rescinding of 0%/40 year mortgages mid-October to the tumultuous stock market, economic worries, fear of recession, job cuts, etc.  – all did nothing to foster a healthy real estate market, and the numbers show this.  (Where to begin?)

Inventory / Absorption Rate

Month-end inventory for Single Family Homes (SFH) was up from September to 5522 from 5387.    Condos remained virtually unchanged at 2640 units for sale.

With October sales, this gave us 6.7 months supply of SFH’s and 6.6 months supply for Condos for metro- Calgary.  The absorption rate is illustrated in CREB’s graph below:

Sales Volume

There were 820 SFH’s, and 399 condos sold in metro-Calgary in October.  This is a significant drop (especially for SFH’s) from September when 1152 SFH’s and 465 condos sold.

Yes, the market does slow in October (normal seasonal adjustments) but it has slowed considerably more this year than previously.  Take a look at the chart below  (again, the DOM isn’t really worth paying attention to, read why here)

Vacancy Levels & Speculators

Of the homes for sale in metro-Calgary,  29% of the SFH’s and 37% of condos were vacant/new construction at October’s month-end which shows the level of speculation that took the city by storm the past few years.   This percentage is actually conservative because there have been a number of homes that I’ve shown that were stated as “Seller Occupied” but were actually vacant upon viewing.  (For more info on Vacancy Levels, click here)  

There are also many condo projects that are slated to be completed in 2009 which will do nothing to ease the high level of inventory.  At the end of September, there were 9,303 condo units under construction in the Calgary Census Metropolitan Area (Source)


Year-over-year, Condos in Calgary have been hit the hardest.   October 2008’s month end median was $268,000 ($289k in 2007) and the average price was $289,148 ($331,617 in 2007)   Condo prices have retreated back to 2006 levels.  What’s different this time around is that we have much higher inventory and sales are down… 

For SFH’s, average price has remained steady at $449k ($452k in 2007) while the median has dropped $22.5K to $390,000.  Again, inventory levels remain high with low sales – not the right mix if you’re expecting prices to increase.

Expiring Listings

You might see the inventory levels drop  as we head deeper into November and December, but this is because many sellers take their homes off the market before the Holidays.     You can see in the chart below how Expired Listings peak sharply at the end of the year.

As always, feel free to post your thoughts and comments.

9 responses to “Calgary Real Estate Market Review for October 2008

  1. Pingback: Calgary crashing — Greater Fool - The Troubled Future of Real Estate

  2. One Of A Kind

    Well I say the numbers say it all for October , things are down. Its not panic however there is a slowdown for sure. I think as long as there no job loses Calgary will just stay flat. However things can change on a dime here in cowtown. Great post Mike !


  3. Thanks, Jerry.

    Quick tidbits: November 1-4, the month-to-date average price for SFH was $490,046. However, if we were to remove the $4.45M sale, the average would then be $432,655.

    Currently, the average pending price for SFH is $428,800 and $334,068 for Condos.

    The average LIST price for SFH’s is at $582k, and $335k for condos.

  4. Seems to me the average prices aren’t capturing the true extent of price declines.

    In Cochrane which is virtually identical to Calgary, there’s homes which I’m sure would have sold for $400,000 or a touch more at the peak and which can’t even fetch $330,000 today. Some sellers may simply withdraw from the market but I’m guessing a few houses I’ve been watching will drop to 300,000 before they possibly sell.

    That’s a lot lower than the averages noted above would suggest and Mike F makes a good point: one sale can distort the averages a lot.

  5. Thanks for your post, Glenn. In case you were wondering, here are some numbers for Cochrane:

    Single Family Homes (Oct 2008 / Oct 2007)
    Sales: 10 / 23
    Average Price: $482,889 / $515,100
    Median Price: $440,750 / $490,000
    Average Sq Ft: 1642 / 1587

    Year-to-date (Jan 1-Nov 4, 2008) there have been 214 SFH sales, with an average sale price of $465,397 and a median price of $425,000.

    Last year, up until Nov 4, 2007, there was 262 SFH sales, with an average sale price of $475,181 with a median price of $447,000.

  6. Great information Mike!

    This is the most balanced piece of analysis I have seen on the Calgary market.
    I particularly like the way you “corrected” CREB’s Absorption Rate chart by moving the words “Balanced Market” back into the shaded area where it belongs. Those folks have allowed these words to creep further and further up the chart in the last few months.

    You have shown true professionalism on your site. I’ll be calling you when it’s time to move house.

  7. Hello Marty – I appreciate your comments. You noticed the “Balanced Market” caption riding the chart wave too? 🙂

  8. Thanks Mike

    That sounds about right and I’m guessing the median will drop to around 400,000 pretty quickly.

    Nothing is selling right now though I’m only watching houses in my price range which is 300,000 to 350,000 and I’m basically waiting for that range to drop more before I get interested. Another $50,000 and the cost of a mortgage will start getting competitive with rent.


  9. Top Real Estates

    I have looked over your blog a few times and I love it.

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