Canmore Real Estate 2022 Recap and 2023 Market Outlook
Happy New Year and welcome to 2023. This past year for real estate in Canmore and the Bow Valley was a tale of two markets: and sub markets. This first half of the year was a frenzied seller’s market while the second half transitioned with rising interest rates, economic challenges, and general market fatigue.
2022 was still the third strongest year on record for the number of MLS transactions and the second highest for dollar volume of sales. There were 411 residential MLS sales and 295 short term rental use (visitor accommodation and tourist home) sales in Canmore, Exshaw, Harvie Height, Lac Des Arcs and Dead Man’s Flats last year. Year over year, residential sales fell 39.5% and short term rental use sales fell 29.6%. Remembering that 2021 was not the norm for real estate in the Bow Valley or the country, this is still a significant decline in sales by units. Overall sales declined year over year by 36% however the total dollar volume in sales only declined 27%. One additional factor that contributed to the decline in sales is there were 17% fewer residential listings and 19% fewer short term rental listings in 2022 vs 2021; even now, well priced in demand properties are going to multiple offers as there remains pent up demand. When looking at our last pre-COVID “normal” market of 2019, overall units sold are up 19% and the dollar volume of sales climbed 57% to $644,949,976.
Prices continued to climb in 2022 and even now in January 2023 most of the market remains in a seller’s market territory; apartment condominiums being the exception which are currently in a balanced market.
Detached & Semi-Detached Homes
2022 Sales down 39% yr/yr to 140 (five-year average 178)
2022 Inventory down 13.7% yr/yr to 208 (five-year average 262)
2022 Average Sale Price up 16% yr/yr to $1,606,877
2022 Median Sale Price up 15% yr/yr to $1,448,550
2022 Sales Volume down 29.8% yr/yr $223,355,905
Townhomes
2022 Sales down 40% yr/yr 135 (five-year average 157)
2022 Inventory down 12.8% yr/yr 177 (five-year average 204)
2022 Average Sale Price up 29% yr/yr $1,008,102
2022 Median Sale Price up 15% yr/yr $1,448,550
2022 Sales Volume down 23% yr/yr $135,085,609
Apartment Condominiums
2022 Sales down 40% yr/yr to 138 (five-year average 158)
2022 Inventory down 24.3% yr/yr to 162 (five-year average 207)
2022 Average Sale Price up 5.5% yr/yr to $655,381
2022 Median Sale Price up 4.7% yr/yr to $620,000
2022 Sales Volumes down 35% yr/yr $83,233,429
Short Term Rental Use
2022 Sales down 29.6% yr/yr to 295 (five-year average 231)
2022 Inventory down 19.4% yr/yr to 373 (five-year average 287)
2022 Average Sale Price up 12% yr/yr to $669,040
2022 Median Sale Price up 12.4% yr/yr to $666,750
2022 Sales Volume down 21.4% yr/yr $196,697,683
Short term rental use sales now account for 42% of total units sold on the MLS, climbing from 29% in 2020 and 38% in 2021. There have been a significant number of new construction developments of these types of properties which has increased the overall volume of sales. In addition, the flexibility and potential revenue generated through platforms such as AirBnB and VRBO has attracted significant investors.
Heading into the new year, our overall active properties for sales remains very low. Year over year, residential listings have increased to 74 properties on the market however this is still 35% below the five-year average for active listings in January. Short term rental use properties are at 18 active listings which is 44% below the five-year average. Typically, we start to see more active listings come to market in February and March with the return of the spring real estate market. December residential sales declined year over year from 28 in 2021 to 23 in 2022. Q4 residential sales declined year over year by 33%. The market has transitioned to a more typical seasonal market as we head into 2023.
Some segments of the market are seeing resale prices lower than the peak pricing of Q1 & Q2 this year. With our overall small sample sizes and small monthly number of sales, it is difficult to paint the entire market with one brush. Monthly average and median sale prices can vary widely depending on what types of properties sold that month. For example, in Q4 townhouses set a record for average price, while detached / semi-detached price declined. We are no longer at the peak pricing and demand of a year ago; both sellers and buyers should be prepared to negotiate on price, conditions and closing. We expect softer prices especially in the entry and midrange of the market over the next few months as these are the segments of the market most affected by the rising interest rates. Other segments of the market are more insulated to rising rates and it comes down to the property, pricing, views, and overall condition.
Our market outlook for 2023 remains optimistic. We will not see the market frenzy of mid 2020 to early 2022. However, many of the fundamentals for the area remain strong and we expect a more “normal” seasonal market.
Challenges:
- Higher interest rates – many buyers have simply been priced out of the market. Even with some declining prices the higher rates will keep some buyers to the sidelines. These rates may also affect the monthly cash flow and net income for short term rental buyers who are taking mortgages.
- Low inventory levels – Canmore is running out of land. Until the Three Sisters development is resolved, we are generally looking at infill construction for any new inventory. This will especially pose a challenge to any affordable housing solutions. Infills and the new Silvertip development are more conducive to luxury housing.
- Foreign buyer ban – we are still looking for some clarification on this and hope to have more answers soon. Each year, Canmore has several non-residents who purchase here for both personal use and investment purposes. While still a small percentage of the overall market there will be some impact.
Opportunities:
- Alberta’s positive net migration – people are moving to Alberta in significant numbers and some of those will chose to call Canmore and the Bow Valley home on a full or part-time basis.
- Alberta’s economy – strong economic forecast for both Alberta’s traditional energy sector and emerging sectors will result in more disposable income. This will result in Alberta based second homeowners or more work from home will making Canmore a primary residence.
- Tourism – Tourism spending in Alberta is expected to continue to recover to pre-pandemic levels. The Bow Valley sees millions of visitors a year and they have a significant impact on the local economies.
- Low inventory levels – this is a blessing and a curse. Our overall levels of low active listings will continue to hold prices steady while we see softening in other large National markets.
We are excited for a fantastic 2023! As your trusted real estate advisors, we look forward to connecting with you.
