The Canmore market has seen some dramatic shifts in 2020.
The first Covid lockdown in February 2020 resulted in a sharp decline in sales and a 5% correct in prices. However, instead of a continued slowdown when things opened up again, we experienced the opposite, with greatly increased buyers demand and inventory to match.
Now in December 2020, in the midst of a 2nd Covid lockdown, we are looking toward 2021 to anticipate the likely market factors that will affect real estate in the new year.
It is expected that we will see a sharp rise in prices in 2021 and 2022 in Canmore. We are unlikely to see a major correction for many years to come.
This is due to several factors.
Covid created demand for 2nd homes in recreational areas for vacation homes. (Alberta’s don’t know when they can travel to United States and are not exactly welcome in BC. Canmore is pretty much the only recreational location in Alberta. It is close to Calgary and the closest town to the ski hills one can buy in. )
Covid created demand for 2nd homes in recreational areas for part-time work from home. (It seems some form of work-from-home is here to stay. There has been an influx of buyers buying property in Canmore to spend more time at, as they can spend half of the time here now working from home, instead of just visiting occasional weekends.)
Cost of lumber and other construction materials have increased about 4X the cost of a year ago. This is not expected to correct for at least a couple of years, and is adding significant costs of new construction in Canmore. As we have low inventory in resales at this time, new home construction is taking up the slack in sales, with expected increasing prices.
Though we had a very active market for most of 2020, it was a balanced market, with enough inventory to satisfy buyers. We are starting to see the inventory dry up, and buyers demand remains high. This will also lead to an increase in price.
Future retirees, who were the dominant driving buyers market prior to Covid, continue to purchase their future retirement homes. This market recognizes the increasing competition in the finite market of Canmore, and buying with more urgency now for their retirement in 3-7 years.
The current buyers are purchasing with genuine use in mind. In past markets, there have been international buyers and speculation investors purchasing for the purpose of buying to flip. We see almost no international buyers nowadays and very few that are buying with speculation in mind. Almost all buyers now intend to use the homes themselves as a full time home, 2nd home or future retirement home, giving genuine value to the homes and the prices paid.
Canmore has some new construction slated, but it is limited and there is a finite footprint to what can be built. There are only a handful of new phases that can be built in town before buildout.
Overall, almost all factors lead us to believe that the Canmore real estate market will continue to increase in buyers demand and appreciating price point.