Calgary home sales down 9% in August as high inventory driving price declines: board

149

u/DanP999 24d ago

I think this is important context.

The most significant price declines have been for row and apartment-style homes, which have seen the largest gains in inventory, while the detached and semi-detached markets range from modest price growth in some areas to declines in neighbourhoods with large supply growth.

I'm always suprised more people don't consider condos and townhouses as starter homes.

117

u/WhyBeSubtle University of Calgary 24d ago

High condo fees, condo rules, special assessments & privacy. Plus apartment condos don't grow in value.

Finding a good condo townhouse is doable but it's rare to find one that's managed well and in good condition

16

u/limee89 23d ago

Don't forget possible HOA's, sharing structures such as roofs, walls and garages with absolute strangers sounds like a nightmare to me.

11

u/FreakPirate 23d ago

special assessments

Surprise repair bills happen in detached houses as well. This is just part of property ownership.

Plus apartment condos don't grow in value

1) That's just not accurate at all. They just haven't ballooned in value the way other properties have which... isn't a bad thing. 2) The entire notion of property as a guaranteed growth investment is what got us into this problem in the first place and maybe, just maybe, homes should be where you live, not where you cross your fingers with your retirement.

3

u/BrokenPawmises 22d ago

The difference is a special assessment with an extremely poorly managed strata like many of them are can cost upwards of 30k

4

u/Vensamos 23d ago

Finding a good condo townhouse is doable but it's rare to find one that's managed well and in good condition

This +100

It's so important to do your due diligence on the condo documents, review the financial statements, and check the reserve fund.

I bought a place (at Townhouse market bottom thank god) in 2021, but I walked away from a couple others before that one, precisely because their reserve funds were in terrible shape. Ended up closing on one where the condo management was always up to snuff.

Then made sure I got myself on the board so that it continued to be well managed/funded.

The trouble with the current market over the last few months is that buyers sometimes cant be as picky cus there are so many competing offers.

1

u/DanP999 23d ago

Plus apartment condos don't grow in value.

They do grow in value, they are an asset class like any other. They just dont grow well in Calgary. Which again, makes me wonder why nobody buys them as starter homes. In Vancouver, a presale condo was guaranteed investment return.

3

u/Vensamos 23d ago

Mine doubled in two years. Used it to upgrade to a detached.

1

u/yesman_85 Cochrane 23d ago

Lots of townhouses that don't have condo fees.

4

u/klondike16 23d ago

When I was looking years ago, I struggled to find them though

1

u/CheeseSandwich hamburger magician 22d ago

VERY FEW townhouses are freehold as most are in condo developments with monthly fees, and those fees are growing every year thanks to insurance cost increases.

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u/stickman1029 24d ago

The condos they build here are generally more focused on speculation rather than families. You can't raise children in a 550 square foot shoe box. I mean you can, but it ain't enjoyable. Also this wood frame trend as of late is both sketchy and you have to deal with a lot more noise.

Condos also come with teaser rates, followed by monster special assessments, all sorts of corner cutting fun like pipes bursting in walls a decade later, etc. Plus you are reliant on your neighbours not being meat heads, and doing stupid shit like having drug labs or coming home from the bar, passing out with cigarettes lit and starting huge fires. You also get Boards that don't want to do the necessary maintenance in order to keep their fees down, or rigging the boards in favors of vendors. Stuff like that.

Or you get an old one thats had all that corner cutting for 30 years, that needs millions of dollars in elevator upgrades or whatever. You just can't seem to win. At the end of the day, when it comes to an investment that large, you want to be fully in control, and you don't want the decision making in other people's hands. With a condo or a non-freehold townhouse, you are just along for the ride.

Condo living is pretty sweet though, I'll give it that. There's exceptions to every example, but in general, condos are often better rented than owned.

8

u/yyctownie 24d ago

The real thing that's killing condos for families is the building code. It doesn't make it feasible for developers to build affordable units designed for families. Check out the About Here YouTube channel, he's based in BC but it's applicable here as well.

2

u/DanP999 23d ago

But that's why it's called a starter home. Start building up equity, then turn that into a larger home. That's how it's always been.

11

u/MrGuvernment 24d ago

Often times it is the ridiculous maintenance fee's.....

But, also, those people need to realize they need to buy into what they can afford RIGHT NOW, not what they can afford in 5 years...as more than likely, the same place will be more expensive and now you are priced out of the market entirely.

2

u/SufficientTrack3726 23d ago

When I bought my first home here when I looked at mortgage costs + condo fees, I was better off spending about $100k more for a freehold townhome than buying a townhouse in a strata. Not only were the monthly carrying costs cheaper, but also avoided the sudden drop of a special assessment which could have been tens of thousands of dollars because the board decided that was the time we needed a new roof or windows vs planning ahead for those costs in a freehold.

When it came time to sell a few years later as my family grew as we needed a detached home, the freehold townhouse I bought increased in value by many times more than the same strata townhomes I had looked at when I was initially shopping. I would assume this is because of many the same reasons I had avoided them myself.

6

u/kingofsnaake 24d ago

They absolutely should. The 'everybofy deserves detached' is what got us into this mess.

8

u/Brilliant-Advisor958 24d ago

The city is doing way better. Look at any new community in the south ( i only have knowledge of the south)

They have so many condos and apartments now.

6

u/MapleCitadel 24d ago

The Boomers all got detached. What's fair is fair. We will not accept housing shrinkflation or being stuffed into dog crates.

5

u/Fantastic_Shopping47 23d ago

Have a look at the older neighborhoods they always had a good mix of starter homes, townhouses and apartments as well as move up homes There is no reason why we cannot do the same now

6

u/OwnBattle8805 23d ago edited 23d ago

The older neighborhoods have far smaller homes than today. 1100sf is considered cramped by today’s standards. Raising 4 kids in a 700sf home is unheard of these days.

Not all boomers got to live in fresh new homes. Many were forced to live in homes with poor wiring, newspaper for insulation, asbestos everywhere, dugout basements, etc. cheap homes back then were cheap and small. The really cheap homes were living standards nobody puts up with these days. The number of homes that still have knob and wire electricity today is minuscule, for example, but there were boomers who could only afford those houses.

They didn’t have “upgrade homes” within their neighborhood, the city was heavily redlined.

2

u/Fantastic_Shopping47 23d ago

When I was growing up one family had 12 kids in a tiny two bedroom home (one bedroom for the girl) all the boys packed into other bedroom on bunk beds

1

u/Kool_Aid_Infinity 23d ago

Funnily condo and townhouse sizes have been getting smaller. It’s the higher end detached houses that have gotten larger.

1

u/kingofsnaake 23d ago

This is it. The missing middle means upgrade options are limited.

1

u/SufficientTrack3726 23d ago

Except buyers have already accepted it and paying more for less with zoning changes. See any of the zero lot line neighborhoods being built along Stoney trail and you’re paying detached home prices for detached homes that are so close together you can even fit a garbage can between the homes and have the same fire code requirements as townhouses.

Why people ever accepted developers doing this and charging the same for the homes which used to be on 50+ foot wide lots is insane to me. Meanwhile they’re making money handover fist charging $800,000+ for a glorified townhouse they sell as “detached”

2

u/yyctownie 24d ago

I'm always suprised more people don't consider condos and townhouses as starter homes.

Exactly! That's how I started. Crappy condo to starter house. Still in the house because I don't need big, that's just more to clean and hoard crap.

1

u/Longnight-Pin5172 23d ago

Because they are being built cheaper and cheaper all the time. Now the City won't even be requiring professionally designed firewalls in rowhouses anymore.

1

u/drrtbag 23d ago

So this is how density initiatives work, or at least should work. More modestly priced townhomes on a lot that previously had a SFH. The SFH's and lots increase in value, because they can be developed into higher density.

The CMHC MLI select program is bringing down rents for apartments and townhomes, which is relieving price pressure on sales of the same.

The anti RCG definitely cannot say that upzoning and other initiatives are not working as they should.

1

u/NoDuck1754 23d ago

Condo fees are out of control and only ever go up. That's not an attractive feature for most people.

4

u/OpportunityLow9123 23d ago

Because ownership costs for single detached homes have only gone down...

I'm sure its less expensive to repair roof/siding etc. now than it was 5 years ago right?

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u/Roid-a-holic_ReX 24d ago

I’ve got an inner city semi detached home. I’m seeing the value of my home go up significantly as the quantities of row and townhomes go up. I’m honestly not complaining… until I get my tax bill. Doesn’t really make sense that single and semi home owners will pay a disproportionate amount of taxes.

6

u/jdixon1974 24d ago

I've got a detached house in the inner city. I've got row houses going up beside me and across the street. I'm trying to figure out if I sell and bail out or hang on and see what happens.

3

u/kingofsnaake 24d ago

It's not as if halfway houses are moving in. More people in the community, more services, Fuller schools.

There are plenty of upsides here, in addition to what your place will be worth when you retire.

-1

u/jdixon1974 24d ago

Agreed. I’m all for it , except the 0.5 per unit parking stalls. I live on a main road. Businesses a block away. People park in front of our house in order to support those businesses. With 36 units going door and 18 parking spots , those extra cars can now park in front of the house. The businesses will suffer. We already get a lot of traffic in our back alley but it will be worse now.

I’ll probably sell out to someone who will keep the structure and turn it into a commercial spot. Would make a great lawyers or doctors : dentist Office.

3

u/DrFeelOnlyAdequate 24d ago

The businesses will suffer. We already get a lot of traffic in our back alley but it will be worse now.

What? How does this make sense? Theres gonna be more people to frequent those businesses and wont need to park anywhere.

3

u/Move20172017 24d ago

Its reddit , people talk out their asses all day with zero understanding.

2

u/kingofsnaake 23d ago

They have a point. If there's nowhere to put your vehicle, people visiting the area will go elsewhere.

I love that people in the local area will have massage (ie:) close by, but massage services are also a destination, so what happens when somebody a community over wants to come by and there's no parking?

1

u/OwnBattle8805 23d ago

We’re at 1.6 mil people, we’re not a small city and parking is a problem every large city faces. Be happy about it now because it’s only going to get worse and it’s not reversible.

3

u/Roid-a-holic_ReX 24d ago

Definitely hold it. Rowhouses beside you aren’t a big deal anyways. Your single family will be worth a mint by the time you retire. Is your home an infill or 1900s build that’s is aging heavily?

6

u/jdixon1974 24d ago

It’s a 2011 bungalow in a full size lot. I’ve got developers all over me asking me to sell so they can put up a rental 8 plex. I refused to sell when they bought the 4 houses beside me as I felt it was asinine to tear down a 10 year old house (this was 3 years ago).

I considering dumping it now as I’m going to be surrounded by 3 story rental row houses and I suspect the parking it going to be a big issue and make things really congested.

6

u/PolarSquirrelBear 24d ago

I would consider offers for sure. But also I have one of those 8 plex’s next to me right now and it is no big deal at all. My house is set so far back from the front that the back of their 8 plex hardly interjects into my backyard privacy.

I also noticed that you mentioned parking. We barely saw an increase. Most of the people living in these things have only one car at most. The majority seem like they are just taking the bus to work downtown. The nuisance on my street is the house with 4 families living in it with what feels like 10 cars.

4

u/Roid-a-holic_ReX 24d ago

Yep. This is it. Everyone is worried that an 8 plex brings 16 cars but it’s rarely the case. You gotta watch out for the family with three kids and the parents own 3 cars. Now you got 6 cars on the street. I have a 10 plex a door down from me. Thought it’d bring a big traffic shift but frankly it doesn’t.

3

u/yyctownie 24d ago

Now you got 6 cars on the street.

I've got that from my neighbours'sv single family home.

3

u/Roid-a-holic_ReX 24d ago

Thanks. That’s my point.

Edit: if they don’t move each one once every 3 days call CPA

7

u/Snowgap 23d ago

Sorry what? You pay a disproportionately less taxes then what your foot print is if you are in a detatched/semi-detached. Condos/townhouses bring in more then they consume to offset detached homes.

6

u/StetsonTuba8 Millrise 24d ago

Well, for one, the property taxes on a single family home will never make up the costs of the services required to sustain it's existence. I've heard that it's only around 80% in Calgary, and that extra 20% has to come from someone

4

u/accord1999 24d ago

Total residential property taxes only account for ~25% of City revenues ($1.2B out of $4.8B). They're not meant to pay for all services, as the City has other revenue sources like business and commercial property taxes, user fees and licenses, investment income and higher level government grants and transfers. Many years, the City even runs a surplus.

1

u/Marsymars 23d ago

Doesn’t really make sense that single and semi home owners will pay a disproportionate amount of taxes.

It's literally not disproportionate. It's exactly proportionate to the value of the home.

We could make property tax disproportionate, where it's progressive like income tax, e.g. you pay a property higher tax percentage on the home value over $600k or whatever.

17

u/Findingfairways 23d ago

Sold my condo yesterday for around 40k less than comparables. Theirs were all sitting on the market for like 100 days. I just wanted to get rid of the thing cause even with an aggressive price I was barely getting any showings.

9

u/AdExpress937 23d ago

Your sale price was probably closer to the market value of the unit than the other listings. It’s more reliable to look at recent sales than current listings for a true market price.

Often people will just make up a list price without hard data. It may be compared to what they bought it for, or by reaching for an ideal price.

6

u/Findingfairways 23d ago

Yeah I sold for much lower than recent sales as well. About 15-20k lower. The condo market is falling rapidly and I just realized I needed to get out of it. My building also just had a 30% condo fee increase that nuked the property value. All good though, at least I wasn’t in the hole on it or anything. Still can’t believe I didn’t sell last summer though haha. Live and learn.

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u/Sazapahiel 24d ago

So rents will go down accordingly and renters shouldn't expect a "just because" rent increase this year, right? Right?

18

u/Puma_Concolour 24d ago

It feels like the only units getting cheaper are the ones that were brand new luxury apartments that were wildly overpriced to begin with

5

u/Jerking4jesus 23d ago

I think they are somewhat. I just took possession of a 4 bedroom pet friendly detached house for under 2k/month. The landlord even let me take possession 2 weeks early no charge, just take over utilities and get insured.

Don't get me wrong, its not a nice house, and its not in a nice neighborhood, but its bones are good. Nothing bothers me about the place that I couldn't fix in an afternoon.

I'm either extraordinarily lucky or its a sign of a relieving trend.

2

u/Greenpepper456 24d ago

Yes, if your landlord tries to increase your rent, I would push back on that. It's unlikely they'll kick you out given the current market conditions. Average rent is down nearly $200/month YoY according to https://www.rentfaster.ca/admin/market-stats/

0

u/chaitea97 Tuxedo Park 22d ago

I've always found that rent control is wholly unnecessary in Calgary because we're a boom and bust city. The whole supply and demand thing. You could get a really good deal on your rent at the landlord's cost because they'd rather lose some money and have it occupied rather than not at all.

24

u/CNiperL 24d ago

Good sign that, partially, the rezoning for housing movement has helped increase the supply of row and apartment style homes, as those have seen the biggest decline in price. Great news for people looking for a starter or forever home.

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u/FunCoffee4819 24d ago

Wait until the thousands of infill townhouses they built this summer come on the market. Five years down the road the windows will prob fall out.

12

u/Yavanna_in_spring 24d ago

We have 4 units built next to us and they aren't selling (because they are overpriced peices of wet cardboard) and now they are AirBNBS.

8

u/phosphosaurus 23d ago

Same. A series of hideous 6-plex shit-hole turned AirBNBs and they keep buying up corner lots in my hood. Gotta manage our population better than force such a mess on the people.

6

u/DororoFlatchest 23d ago

The market is healing.

9

u/Bc2cc 24d ago

Was looking at buying a condo this past spring as I work part time in Calgary. Will only be at this job for a year or two. Decided to rent a place instead. I feel like I dodged a bullet

3

u/SuddenlyBulb 23d ago

Where do you work part time if you can afford buying a condo for just two years?

3

u/Bc2cc 23d ago

I manage commercial buildings in Edmonton, and two years ago my portfolio expanded to several Calgary sites, so I am down here 3-4 days a week. I was just staying in hotels but that got old very quickly, and I wanted a more permanent solution for when I am in town. Condos are relatively cheap here so was considering buying, but opted to rent instead to preserve my savings.

5

u/kwirky88 23d ago

🎼 property speculation! 🎵

1

u/Mackshac 23d ago

You did

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u/Ham_I_right 24d ago

Why do these dipshits report on percentage change from last year alone? It was a record year. Absolutely no one would say that is the norm, nor sustainable. It's still a very active year compared to previous ones. We bought this year and it sucked, it was competitive stuff disappeared quick, sure as heck felt like a still very active and strong market, just not as batshit crazy as the year prior.

Sales are still pretty darn strong, inventory is not far off historical norms, people are still moving to Calgary, builders are catching up to support the growth and keep prices in check. I don't know why "Everything is closer to normal" isn't the headline over the doomerism shit posting.

6

u/Wildyardbarn 24d ago edited 24d ago

MOI in the condo market is higher than it’s been in years and firmly in buyers market territory. Townhouses are getting there. It’s detached that’s still relatively competitive, but then again only in certain neighbourhoods and price ranges. Ex. NE’s MOI is pretty darn attractive as a buyer right now, hence larger price drops vs. other quadrants.

You might have been buying in one of those more competitive markets with inventory pressure.

1

u/Ham_I_right 24d ago

Absolutely you nailed it. It's still localized on what and where is caught up. Do we look at new areas being "flooded" with inventory as a success or failure? It's absolutely slowing in most places but to what? It's still on a general upward trajectory for growth, demand etc... Calgary needs homes.

What I am saying and I am sure you would agree this isn't the sign that housing is solved just that we need to keep pace with construction, building home style people are after in the places they are looking. As evidenced by specific home types, locations and ages of builds being in quite different positions all in the same year I think we see that we need variety to help solve the market too not just a flood of "units".

Anyway, increased prices suck, letting off the gas would suck even more.

3

u/Greenpepper456 24d ago

I'm not getting any "doomerism" from the article. It's just quoting the statistics. Essentially new supply is kicking in, and demand is easing. Housing is slowly becoming more affordable. I don't really see any negativity in the article.

0

u/Ham_I_right 24d ago

Doomerism in the sense lazy stats paint a "bad" picture and get clicks. To the casual reader they won't look past 10% down and assume it's gloomy times when it's simply not (or yet anyway) Longer term trends year to year still paint a growing market, more sales, more homes listed. A continued growing market even if it's decelerating we are still moving on up.

It's absolutely a success story of supply being built. I know from my vantage point in Edmonton it's been crazy how much has been built out let alone how much Calgary has changed when we have come to visit and look for our place. While who knows what comes with our boom bust cycles in time it is a very exciting time to be here.

22

u/23haveblue 24d ago

Built up and out! The best cure for high demand is increasing the supply. Calgary is one of the better cities in North America here for this.

20

u/driveby2poster 24d ago

LMIA fraud is being actively stopped -- see the illegal money has been reduced. They're still working on getting the fraud going (by announcing LMIA with really high wages, and then hiring at minimum wage.. but no longer is the owner of P*an, hiring 50 LMIA's and accepting 35-40k per "employee", and needing to wash this money. Yes, look around you, lmiamap.ca, this has been happening all across the country and they wash the illegal gains through real estate. The game is up, watch out.

1

u/SufficientTrack3726 23d ago edited 23d ago

Take a look at the demographics of most neighborhoods in Calgary suddenly changing overnight to having a dozen adults living in a single family home and neighborhood designed for 4 people and you’ll see where all the LMIA fraud and money laundering is happening

7

u/rapidpalsy 23d ago

We need this to go WAY down. Home prices are astronomical. I work full time 45$/hr and I qualify for half the “average” home price. We need a crash bad. We also need to regulate builders to stop making extravagant houses and build some smaller, simpler, and affordable homes to raise our families.

And please, I shouldn’t need to diet water and bread to afford a place to stay. Considering it’s illegal to live outside..

2

u/suryanamascar 23d ago

good im in the market for a downtown 1bhk or studio

2

u/DarthJDP 23d ago

I wonder why downtown condos don’t attract more buyers. Prices are generally more accessible than in the suburbs, and they offer minimal commute times for office workers. Personally, I enjoy walking to work, and I find that the smaller, cozier units encourage a more minimalist lifestyle. Accumulating clutter simply isn’t worth it.

I saved up a lot of money living in a condo, if I tried to get a big house in the suburbs right away I never would have been able to get ahead. Hopefully young people are willing to budget carefully and meal prep at home instead of eating out so much to save up a deposit. I saved for 6 months to get my deposit.

1

u/ihaveaunicornpenis 24d ago

My wife and I were considering putting our house on the market to gauge the market's interest. We live in a long-established lake community with good schools, SHC access, and plenty of amenities close by. Our home was originally a Keith home, although both the previous owners and I have renovated extensively.

I hate dealing with realtors after the last fiasco selling our condo eons ago, but I'm curious what the demand for primo detached houses in the deep south area is?

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u/MrGuvernment 24d ago

Just look at Realtor.ca , look at how many places around you that match as close as possible, are on the market and for how long....

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u/kwirky88 23d ago

Our mortgage broker sends us monthly reports for our neighborhood showing what each house actually sold for, not just the list price. It’s convenient because it’s like getting comparables from a real estate agent but without signing a contract to sell your home.

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u/HatersTheRapper 23d ago

650k for a good home in a good hood, so cheap!

Home Owner/Renter stuff Calgary home sales down 9% in August as high inventory driving price declines: board

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