Overall, another sound year for the real estate market in the Bow Valley. The growth in values that we witnessed in 2016 and 2017 has slowed to a more moderate level as the market shifted to a more balanced phase. The total volume of MLS sales was down 5.4% to 543 sales and the total volume of transactions was down 3.9% to $366,732,660. Inventory remained unchanged with 827 listings through the year. There were a number of developer sales that are not accounted for in these figures especially with the release of new projects in Spring Creek and Three Sisters.
An interesting shift this year has been the changing timing of the market; 2018 started off very slow followed by a record Q2, strong Q3 and slow Q4. Q2 and Q3 2018 accounted for 61% of all transactions, while that number is traditionally in the 52-55% range.
Finishing off 2018, December was the softest month for sales in four years with 21 transactions. The winter market has started early and has transitioned from a balanced market to buyer’s market. Year over year, Q4 sales fell 22.8% to 105 transactions. There are currently 190 active listings in Canmore, Harvie Heights, Deadman’s Flats, Lac Des Arcs and Exshaw up from 146 at the same time last year. Year over year, December sales fell 51% from 43 in 2017. The change to lending rules has also affected the entry level market due to our high values for first time properties.
The luxury market remains challenging in the Bow Valley with transactions above $2,000,000 falling by 50% this year. Some of this can be accounted for by the strong sales of detached single family lots in Silvertip; buyers are choosing to custom build rather than purchase in the resale market. Record prices are also being paid for redevelopment parcels in South Canmore and Lion’s Park as people prepare to custom build in the Valley bottom. As the supply of building lots become even more limited (until Silvertip and Three Sisters release a new phase) we may see a slight uptick in the sale of large homes in the area. There have been strong sales of luxury condominiums both apartments and townhouses as many buyers opt for a lock and leave lifestyle; these prices also currently top out at $1,500,000. Many of the buyers of larger homes continue to be Alberta based and with the challenges in the Alberta economy we do not foresee strong luxury sales until the broader Alberta economy recovers. Anecdotally, interest from both the US and UK markets has picked up this year; the weak Canadian dollar, affordable prices (compared globally), and enviable lifestyle the Bow Valley has to offer is attractive to foreign buyers. If you are considering a purchase of a significant home in Canmore, we are in a buyer’s market and there is a great selection of homes available.
Detached & Semi-Detached Homes
Average Sale Price $1,030,359 ↓6.2% yr. / yr. (2017 ↑17.7% yr. / yr.)
Median Sale Price $904,500 ↑0.38% yr./yr. (2017 ↑10.8% yr./yr.)
Total Sales 160↑5.96% yr./yr.
In a year where the market saw overall sales volumes decline, detached and semi-detached sales increased year over year in 2018. The median sale price increased by $3,500 while the average sale price decreased by $68,000. The reason for the decrease in average price, was that the luxury segment of single-family homes was much softer this past year. There were six sales of detached homes over $2,000,000 in 2018; down for twelve the previous year. Some portions of the detached and semi-detached market are well into buyer’s market territory, while some portions are hovering between balanced and a seller’s market. Prices in this segment overall are balancing out after a few years of significant growth.
Average Sale Price $671,853 ↑2.3% yr. / yr. (2017 ↑12% yr./yr.)
Median Sale Price $635,000 ↑4.9% yr./yr. (2017 ↑1% yr./yr.)
Total Sales 112 ↓30% yr./yr.
There was a significant drop in sales of townhouse properties this past year. This is a combination of three main factors. Firstly, with the changes to lending rules and rising prices, many of the traditional first-time buyers in entry level townhouse have been priced out of the market. Secondly, there were 9.4% fewer townhouse properties offered for sale this year. Thirdly, many of the larger new construction projects that launch in 2017 have sold the majority of their project and this new inventory has been absorbed by the market. Townhouse fourplex properties in South Canmore achieved strong price growth again this year as the proximity to downtown continues to achieve a premium.
Average Sale Price $489,914 ↑5.5% yr. / yr. (2017 ↑6.7% yr./yr.)
Median Sale Price $467,000 ↑8.7% yr./yr. (2017 ↑9.1% yr./yr.)
Total Sales 152 ↑1.3% yr./yr.
Apartment sales remained steady in 2018 with good growth in both average and median price. Much of the new construction currently in Canmore is for apartment style properties; Spring Creek Mountain Village and Stewart Creek have large projects underway. Entry level and smaller properties lead sales as some buyer who may have previously considered a townhouse choose to purchase an apartment.
Land and Lots
Average Sale Price $1,050,892 ↑52.4% yr. / yr. (2017 ↓2.5% yr./yr.)
Median Sale Price $787,500 ↑30.7% yr./yr. (2017 ↓4.6% yr./yr.)
Total Sales 14 ↑16.7% yr./yr.
A note of caution when looking at the above number for lots and land, the sample size is very small, and a few large sales can swing the numbers. Developable land continues to be scarce in the Bow Valley with very few new parcels coming to market. The majority of the sales this past year were for detached home lots in Silvertip and there are some significant custom homes being built. A large tract of land on the east side of Exshaw has recently sold and we expect to see single family and multi family dwelling sites coming to market. Only Silvertip and Three Sisters have any significant parcels of developable land left and it will be a while before any of this is released to the market.
Hotel Condos / Recreational
Average Sale Price $360,839 ↑8% yr. / yr. (2017 ↑16% yr./yr.)
Median Sale Price $385,000 ↑19.2% yr./yr. (2017 ↑10.9% yr./yr.)
Total Sales 105 ↑3.96% yr./yr.
The demand for short term rental properties remained very strong with a flurry of sales kicking off 2018. Hotel condo listings are few and far between with 2019 starting off with 15 active listings (there were 134 in July of 2011!!!) We have seen a slowing in the climb of prices of these properties as revenues are not always aligned with potential income and lenders become increasingly difficult to find.
Looking ahead to 2019, there are many provincial, national and global factors at play. A stabilizing Alberta economy will benefit both our tourism sector, second home buyers and commuter population. The low Canadian dollar will be positive to both the tourist sector and foreign second home owner. Market tensions and volatility may result in some choosing to move some capital into real estate assets. We expect more development in Stewart Creek and progress on the future Three Sisters area structure plans; this could lead to a release of more developable land. Spring Creek continues to drive forward as their vision comes to fruition.
Inventory will rise again starting in February / March as we move into the spring market. This coming year we don’t foresee the rising prices that have occurred in the past few years. The market will hover between a buyer’s and balanced market for the first few months of 2019. If all remains stable with global markets, the Canadian and US economies we expect to see steady sales again this coming year. The Bow Valley economy is somewhat insulated from the Alberta economy being primarily a tourist based economy. If we see oil prices rise significantly and the price differential decrease significantly, we may also see a slight return of the luxury market.