The housing market is buzzing with remarkable activity this year across North America. Record housing starts and soaring prices are reshaping the real estate scene, sending ripples through communities from Calgary to New York.
According to the Canada Mortgage and Housing Corporation (CMHC), Alberta is setting the pace, boasting a 54% increase in housing starts compared to last year. This trend marks the highest construction activity recorded for the first half of the year since 1990.
Calgary led the charge, with 11,178 housing starts, up 38%, and Edmonton followed with 8,448, exhibiting an even larger surge of 67%. Saheb Dullet from BILD Alberta highlighted, "We have over 21,000 housing starts across Alberta, marking it a record-breaking number for the first six months of our province's history."
If this momentum maintains, Alberta is poised to smash its all-time record set back in 2006 of just under 40,000 housing starts. The rise is particularly notable for purpose-built rental units, which now make up 33% of all housing starts, representing substantial growth compared to the preceding fifteen years.
Meanwhile, homebuyers across the United States are grappling with shifting market dynamics. Research from real estate brokerage Redfin indicates nearly 8.5% of U.S. homes are now valued at $1 million or more, marking the highest level ever observed.
This trend is driven by rising home prices, with the median sales price climbing by 4% year-on-year to $1.18 million for luxury properties. This significant jump reflects the overall competitive nature of the housing market, which remains pressured by scarcity.
Despite mortgage rates having more than doubled since early 2022, resulting in higher housing costs overall, competition remains fierce. The persistent housing shortage has meant prices have stayed elevated as demand continues to outstrip supply.
Across the broader region, home sales are witnessing declines, particularly after the post-pandemic surge. For example, the five-county region noticed 210 homes sold in July 2024, down from 237 during the same month last year.
Interestingly, amid these volume declines, average home prices are still elevationally setting records. The average price for homes sold has been consistently higher; Grand Traverse County saw its average sale price reach $554,907, just above last July's record price.
Even more impressively, Leelanau County's average sale price soared to $935,494, illustrating broad price increases. A lack of inventory has made these trends more pronounced as competition drives prices set new heights.
While some regions are experiencing sales volume declines, others highlight the contrasting narrative of record-setting prices, showing how intricately woven the housing market is across various landscapes. The situation begs the question, what will the second half of the year hold?
Experts are cautious but optimistic about the future. Many anticipate sustained growth, particularly if new constructions come online or economic conditions stabilize.
Over the next months, as housing starts continue climbing and prices push new records, one can’t help but wonder how these elements will influence consumer sentiment and purchasing power. The North American housing industry is undoubtedly on the frontline of economic shifts; every detail is worth keeping under close observation.
To summarize, the housing market is at a significant crossroads, marked by both opportunities and challenges. While prices surge, the supply side dynamics remain complex and tightly interlinked with wider economic trends.
