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Jacqueline Peterson at her rental home in Brooks, Alta., on Feb. 25.TODD KOROL/The Globe and Mail

Last year, encouraged by low interest rates and additional savings, millennial first-time buyers drove the recovery of Alberta’s long-depressed housing market. But this year is different. In 2022, fear-of-missing-out and out-of-province buyers are fueling an already hot housing market in Calgary, generating record-low inventories and boosting prices across most segments.

“Last spring we noticed there was a lot more activity on our website from people from Toronto, [the] GTA and Vancouver,” says Jared Chamberlain, realtor and owner of Chamberlain Real Estate Group in Calgary. “Come into this new year, there’s been a flood of people buying properties here from those areas.”

And this influx of buyers is now evident. In February, Calgary’s detached market was the tightest it’s been in 15 years, the Calgary Real Estate Board reported on March 1. Compared to the same month last year, the median resale price of all homes in the Calgary area (which includes Calgary, Airdrie and Rocky View County) is 16-per-cent higher, yet new listings are moving quickly.

As inventories tighten in Calgary proper, the average number of days in the market has dropped dramatically from 45 in February, 2021, to only 25 this year. “It’s been record sales again this month,” says Ann-Marie Lurie, chief economist at CREB. “Part of that has to do with the fact that sales have been somewhat limited by the lack of listings coming on the market.”

But that’s not because there are no new listings coming online. Despite a record number of new listings in February, 4,652 in total, this was not enough to meet demand. “We’re still seeing really tight conditions in the market, and it’s causing some steep price gains,” Ms. Lurie says, noting that in February alone prices rose by 6 per cent – a significant increase driven primarily by the detached segment.

While it can be difficult to pinpoint a single driver of this spike in demand (the combination of pent-up demand, low interest rates, interprovincial migration and the recovery of Calgary’s economy, all contribute to the tight market conditions) some realtors suggest this could be evidence of increased investor activity in the Calgary market. For out-of-province buyers Calgary remains a relatively affordable market – especially for those who may have cashed in on the sale of their Toronto or Vancouver property.

In January, the Bank of Canada reported that in the second quarter of 2021, roughly 22 per cent of all mortgaged home purchases in Calgary were made by investors – that is, buyers who own more homes besides their primary residence. To be sure, however, additional evidence of increased investor activity remain anecdotal, including rumours about Alberta brokers holding seminars in the Toronto and Vancouver areas to lure out-of-province investors.

According to Mr. Chamberlain, investor activity is more likely to become apparent in the new-build segment, as Toronto investors tend to buy directly from developers, he explains. “That has never been a normal way to invest in Calgary that I’ve ever seen in our 20 years of doing real estate.”

In the second half of 2021 the absorption rate of new-builds skyrocketed in Calgary, according to CMHC data, and the rate surpassed 80 per cent across segments – something not seen since 2015.

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Jacqueline Peterson recently bought a house in Calgary.TODD KOROL/The Globe and Mail

Through her brokerage, Royal LePage Benchmark, Calgary broker Corinne Lyall has observed some investor activity. “Anecdotally, in the last few months a number of our realtors are starting to work with investor-type clients that are not looking to buy just one property,” she says. “They’re looking to buy multiple properties for syndicates.”

And the increased competition is leading some first-time buyers in Calgary to make hefty compromises, whether it’s on location, price, or even conditions.

“Multiple offers have been occurring for the last year, but it’s definitely been more heightened since the beginning of [2022] because of the lack of inventory,” Ms. Lyall says, noting that while low inventories are normal for January, this year’s demand isn’t. “Now you have lots of demand and very little inventory because people don’t want to put their houses on the market until they find someplace [else] to go.”

Last summer, after a six-year stint of renting in Brooks, Alta., Jacqueline Peterson and her family decided they would relocate to Calgary in 2022, as her job in a clean tech company would require her to live in the city. To accommodate a family of four, the Petersons were looking for a three-bedroom detached home in the inner city and she felt confident that having a $600,000 mortgage pre-approval would help make the buying experience smoother.

But as 2021 came to a close and the market continued to tighten, Ms. Peterson realized that waiting even a single day to inquiry about a property was already too late. “That really drove home to me that there’s not really much time to visit a lot of homes,” she says. And when asking prices in the neighbourhoods she was looking at, such as Ramsay and Inglewood, rose by over $100,000 in January, she knew she had to act fast.

In early January, Ms. Peterson placed her first conditional bid on a 1950s bungalow in Ramsey, just five hours after her dad had toured the house on her behalf. But the deal fell through when the property didn’t meet her minimum requirements during the inspection. A week later, a two-bedroom detached home built in the nineties in Windsor Park piqued her interest and after doing a virtual tour, she was ready to make a move.

Knowing there would be multiple bidders (there were five), she offered $607,000, or 10 per cent over-asking, for a $550,000 home. “We still had the condition of the house inspection,” Ms. Peterson says. “But we didn’t have any other conditions.” In addition, following the advice of her realtor, she wrote a personal note to the seller – and it worked. “There was one other offer that was very similar to ours,” she says. “But with no conditions at all. [The seller] said they chose ours because of our note, and our connection to the community.”

Even though Peterson believes she got a fair deal, for a first-time buyer, her experience is far from ordinary. According to Corinne Lyall, a Calgary broker and owner of Royal LePage Benchmark, “somebody that’s ready to buy will usually buy within a month or two, depending on what kind of inventory there is.” And in a balanced market, she says, most buyers would usually look at between 12 and 14 properties before making a move – rather than two, like Ms. Peterson did.

“We’ve been pretty lucky in that the two offers that we did put in, we theoretically got both of them,” Ms. Peterson says. “But we acted fast and we made strong offers.”

In such a hot market, however, “there’s probably more of an opportunity for syndicate groups if they’re going to purchase more than one property.” Ms. Lyall says. “And if they’re coming from a place like Vancouver or Toronto, where they do have excess cash, being able to compete in buying houses and put in a large down payment would give them immediate cashflow.”

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Jacqueline Peterson believes she got a fair deal, for a first-time buyer, but her experience is far from ordinary.TODD KOROL/The Globe and Mail

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