Are Canmore Real Estate Prices still increasing? Let’s take a look at the first Quarter of 2024!

There is a lot of uncertainty in the real estate market these days. Uncertainty is less than ideal for any market. On March 6th of this year, the Bank of Canada announced that their inflation target rate of 2% has not been met yet and they kept their rate at 5%. Now there is anticipation building up for a rate drop this June or July.

There are a lot of factors speaking for this. The core inflation eased to 3.5%. Unemployment rates in the country increased and many businesses are freezing hiring. Arrears are increasing. In 2024/2025 there will be over 2 million mortgage renewals coming up, adding stress to household budgets.

However, inflation in the U.S increased to 3.5% in March (from 3.2%), propelled by surging gas and mortgage prices, which could delay rate cuts in the US. And experts doubt that Canada would reduce its rates earlier than the US due to impacts that this would have on the exchange rate of the Canadian dollar against the US dollar. With a high contingent of goods imported from the US, a weaker Canadian dollar would increase prices in Canada and immediately funnel inflation again.

So it remains to be seen….

On the other hand, the federal government has just announced that first-time homebuyers purchasing newly built homes will be allowed 30-year amortization periods on insured mortgages. This will allow the mortgage to be increased in most cases by $10s of thousands of dollars helping first time buyers to hopefully qualify on their own.

And what kind of effect does all that have on our market here in Canmore? The market is active but not as hot as it is in Calgary. We do have buyers, but we don’t have inventory which brings down sales numbers. I do expect some easing this Spring with more properties coming to the market, but if rates do indeed decrease in June or July, I expect a very competitive sellers market this year.

And why don’t we have more listings? Well – many sellers will be thinking like me; they are anticipating a hot market, and they want to wait; homeowners in Canmore are on average well off and able to absorb higher interest rates – pressure to sell is relatively low. A property in Canmore is all about lifestyle and life quality. People with a property in Canmore are more devoted to their home and even under financial pressure they will hold on to it as long as they can – even if they must work two jobs.

In a nutshell,

Compared to the last quarter of 2023….

Sales Numbers are down

Prices are down

Listings are down

Days on market are up

Compared to the first quarter of 2023….

Sales Numbers are up

Prices are up

Listings are down

Days on market are up

Let’s take a look at the details:

Sales Numbers:

Coming from 2023 into the Spring of 2024, sales numbers in the first quarter decreased slightly from 115 to 111. The biggest decrease here were hotel condos (properties that do not allow fulltime living but instead can be rented short-term on Air B&B or similar). We saw the biggest increase for townhouses despite higher prices.

  

Compared to the first quarter of 2023, sales were still up by 26% with 111 sales in 2024 compared to only 88 sales in 2023.

Sales Prices:

Along with slightly lower sales numbers, we also saw a decrease in sale prices from the last quarter of 2023 to the first quarter of 2024. The average sale price decreased by about 9% from $1,156,000 at the end of 2023 to $1,055,000 at the beginning of 2024.  

All property types experienced this price softening except for hotel condos and townhouses which both experienced slightly higher prices.

Compared to March 2023 however, average sales prices in Canmore are still ca. 5 % higher. Exceptions are apartment properties, tourist homes and town houses.

For tourist homes I have been noticing more resentments from buyers on the whole since the town of Canmore announced that it might change zoning and taxation regulations around those properties (under discussion is to phase out the tourist home zoning; properties that are presently rented short-term will be grandfathered; going forward all tourist home properties would have to pay the higher short-term rental tax; owners can change the zoning into residential which would allow them to enjoy the lower residential tax but the option to do short-term rentals would be terminated by this move)

Listings:

Fewer listings are normal at the beginning of a year, but this lack of listings is remarkable. Starting at only 75 listings in January, we are only slowly coming up.

March had about 86 listings and right now we are at 93. We are seeing less listings than at the same period last year or at the end of last year.

The only time we had less listings was between the whopper years of 2021 and 2022.

Less listings and buyers sitting on the fence in anticipation of lower interest rates have increased days on market for the first quarter of 2024. Other economical factors as described above may also have had an influence on the general market activity in Canmore.

Summing up:

I think that this Summer a lot of buyers will bring themselves into position to purchase a property in Canmore as soon as interest rates start to come down. A higher demand could drive prices again which in return could entice potential sellers to list. We could see a very active market in the 2nd half of this year in Canmore.

Thomas Krause – CANMORETHOMAS | REALTOR RE/MAX Alpine Realty

Canmore Alberta, April 15th 2023

Data from Xposure, Canmore only