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CREB's Annual Forecast:

Have you ever wanted to sit in on the Calgary Real Estate Board annual Calgary housing market forecast? Here’s your chance. This is the Forecast presentation by Anne-Marie Lurie, CREB’s chief economist. The presentation is about 45 minutes long and I focused on every minute of it. You might like to investigate a couple of specifics and skip the rest so I’ve made it easy for you. Just peruse the caption overview below and turn into the time periods that are of most interest. If you prefer to skip through and catch her charts and high lights I’ve done a wrap-up overview at the end.

CREB's 2022 Forecast

Ann-Marie: So, um, 2021 was definitely far better than anyone had expected. Um, if we think about what happened, I mean, no one had forecasted that sale would hit record levels. Um, and, and not, you know, we had expected that sales activity would improve. We had expected that we would also see Calgary house prices rise last year, but just not to the extent. So we had a 71% year over year increase in sales. Um, and this is fairly surprising because we were still in a pandemic out what happened to cause demand to be so strong. Well, obviously one of those main drivers was those ultra low lending rates that we’ve seen. Um, but there was other factors. We knew that there would be some pent up demand in the Calgary housing market, but it was far more than anybody of us that had expected. Um, further to that. We also had thought that, you know, some of that improved savings, um, from people that weren’t as impacted through the pandemic would start to play out in the housing market.

Ann-Marie: Um, I think that happened much more than again, as we anticipated, um, other things that were better, um, the economy, despite having the pandemic, we saw better than expected job growth and a stronger than expected energy sector. All of this contributed to improve confidence in calgary housing market and some of the very strong sales we’ve seen now, when we look beyond that, though, one of the challenges were Calgary new listings, um, and inventory. Now we did see new listings in calgary improve. They increased by 34% over the previous year and were quite high, uh, relative what we’ve traditionally seen, but it just wasn’t enough to keep up with the sales in the calgary real estate market. And that caused further declines in inventory levels. And really what happened is that months of supply, which is that measure of balance. So that, that relationship between the supply and the demand and the housing market tighten into seller’s market conditions that persisted throughout most of the year, and that caused some very significant price gains.

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CREB's 2021 Forecast

Cole’s Notes:CREB Member’s Forecast meeting. Q4 20

1:30 We have more data now about Covid.
2:00 Jumped back from desperation to 200k Alberta jobs lost.
2:57 Alberta is impacted more than the rest of Canada
6:10 In Alberta Lethbridge and Medicine Hat are the best markets because they are not as dependent on energy sector jobs. 5:20 Analysts are saying markets could go down by as much as 20%.
6:45 We have not dropped as much as Ann Marie expected because supply has dropped off in balance to sales.
8:20 Activity is not as bad as what was expected.
8:50 If things don’t change the economic fundamentals will continue to weigh on our market.
9:15 August this year was similar to August of 2019 although last year was fairly down.
11:10 In some ways our supply/sales adjusted numbers are (at this point) better than pre-Covid.
11:55 We have a market that is temporarily better than what we expected. Prices are solidifying and in fact going up.
12:35 Most of the improvement is solely in the detached single-family sector.
13:05 The apartment condo market is off the charts.
13:25 Covid has caused the Calgary detached market to become balanced.
14:40 As commute times become less of a factor due to Covid satellite towns are seeing an upswing.
15:40 While we are seeing market stabilization it is dependent on which segment of the market you are talking about.
16:30 While the detached market has a long way to go to get back to the 2014 market we are beginning to see a trend reversal due to pent up demand of Covid-19.
18:10 Market trends are different depending on the sector or market zone you are in.
20:30 The lower end of the detached Calgary housing market forecast surprisingly has seen somewhat of an upswing during Covid -19 shut downs.
21:30 Upper price ranges ( $600k plus) are seeing price declines.
23:40 Other regions in Canada have seen record high real estate sales prices. Calgary is not experiencing that because our job losses are more focused in the energy sector.
25:45 The market pressure that we are seeing on the top end of our market will persist.
29:43 According to the Calgary housing market forecast Alberta’s economy is expected decline by 8.7%. Making it one of the worst recessions that we’ve seen.

31:37 Oil prices are expected to remain low with the optimistic projection of energy industry recovery being 2022.

33:32 Provincial migration numbers are not nearly as negative as the early 1980s recession. Migration is a determinant of real estate market buoyancy. If migration levels hold, we should not see as dire a housing market as we did then. This is yet to be seen.
37:00 Employment recovery is not anticipated until 2023.
38:40 If the current rate of unemployment is sustained over a long period, we could see percentage price adjustments similar to the early 1980s.
40:55 In 2020 many of the jobs that have been bolstering the numbers have been part time positions.
41:52 The economy was forecast to be worse off than it is. That has been primarily due to the significant amount of government support.
44:37 Low interest rates are helping to buoy up the market.
44:48 Considering the employment numbers there is a significant amount of downside risk.
46:15 Questions period