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Last month, I talked about the importance of understanding the overall market conditions. This month, I’ll continue with that theme, but focussing in on a very specific market segment:
I chose this segment because most Calgarians are familiar with it. Generally speaking, these are the “skinny” side-by-side inner-city attached houses, built on a “standard” 50-ft lot, formerly occupied by a single 1950’s or 1960’s bungalow.
For the purpose of my analysis, I’ll be specific about the criteria I am using:
- 2-Story Semi-detached (duplex) Single-family (non-condo)
- Price range $750,000-$1,000,000
- All inner city communities
Following are some specific facts for this market segment
The target buyer is a young professional couple, probably working downtown, and probably in the oil and gas sector – not the greatest target market for any seller to have, currently. This will seem obvious to most Calgarians, and it is proven out by the fact that there have only been 76 recorded sales so far this year.
Currently there are 171 active listings on the market. Builders continue to add to the supply, seemingly oblivious to the current saturated market condition.
BALANCED MARKET – NOT
I consider a balanced market to be approximately three months supply. In this segment, given the listings/sales ratio, there is currently almost a full YEAR of inventory. That’s bad. But, let’s break it down a bit further, by looking at some other factors.
The vast majority of successful sales were for brand new houses. Only 35% of the sales were built prior to 2017, while 60% of the unsold inventory was built prior to 2017. Therefore, if you’re attempting to re-sell your older infill in this market, you’ve got a real problem; you have almost 19 months of inventory to compete with.
The most popular communities for sales in the SW quadrant were Altadore, Killarney, South Calgary, and Richmond. In fact, there was only ONE sale outside these four popular communities in the SW. If you’re trying to sell in any other SW community, you’ve got a problem.
Yes, size is important. Only two of the successful sales were under 1700 sq. ft., compared to 24 of the active listings. Those listings represent five YEARS of inventory. But truthfully, I have looked at those 24 listings, and I’m just going to say it; NONE of them will sell any time soon.
The indicators are just a few simplified examples of some of the factors I will consider when I’m evaluating your home, and obviously I am using a market segment with some shocking stats, to make my point really clear.
I should also say that just because conditions appear onerous, this does not necessarily mean you can’t do well. For example, earlier this year I recorded the highest sale price ever recorded for an attached infill in Killarney. On another of my Killarney listings, I recorded one of the highest prices per square foot ever recorded. And that infill was five years old.
But those exceptions do not mean you don’t need to pay attention to the statistics. Those two examples were isolated exceptions and each home had its own special story.
The point here is you need to pay attention to ALL market factors, and you need a skilled and experienced REALTOR® to help you interpret those factors. Some stats are much more important than others, depending on the situation, and EVERY situation is different!
If you are curious to understand where you stand in the current market, please never hesitate to give me a call.
Until next month…