Calgary homes similar in price to Dallas

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The grass may not necessarily be greener south of the border, but home prices are generally more affordable in many comparable cities in the United States than in Calgary and other major Canadian metropolises. A recent report from NerdWallet examined average prices in three major Canadian cities, including Calgary, versus comparable U.S. markets.

NerdWallet’s real estate expert Clay Jarvis, who produced the report, notes Calgary and Dallas were compared with one another, given their large oil and gas industry footprints and comparable size in population.

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“The median prices we were comparing in April were only about $30,000 in separation, whereas the other city comparisons had much wider price differences.”

The report shows that in April the median price of a home in Calgary was CDN $565,500 versus Dallas at CDN $533,188.

Edmonton’s median price was not included in the study, but Realtors Association of Edmonton data from April reveals that the median price for all homes was $418,000. For comparison, Houston — also an energy hub — had a median price of about $465,600 ($340,000 USD) in May.

Another comparable for both cities is Minneapolis where the median price was about CDN $505,000 in May.

Jarvis notes that Dallas, unlike Calgary, did not see as much of a downturn in pricing, if any, during the second half of the 2010s with the crash in oil and gas prices. “Dallas had something going for it that Calgary has only started to have,” he says. “That is a more diversified economy.”

The rough ride for Calgary’s and Edmonton’s housing markets and economies served to drive home the importance of economic diversification to smooth out the volatility of Alberta’s oil and gas economy that often follows a boom-and-bust cycle.

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“We’ve made some really good moves to diversify the economy in recent years,” says Ann-Marie Lurie, chief economist with the Calgary Real Estate Board.

“I don’t think we’re fully there yet, but we’ve made strides in attracting different industries.”

Lurie points to growth in the city’s tech sector and other areas like aviation as signs of a more diverse economy.

The NerdWallet report also compared two other Canadian cities — Vancouver and Toronto — with Denver and Chicago, respectively.

“These cities had much wider price differences,” Jarvis says.

In April, Vancouver’s median price was about $1.17 million versus in Denver where the price was CDN $350,000.

It further noted that other cities like Los Angeles and San Francisco have median prices more in line with Vancouver. (The study used population to determine comparable cities, and only used Vancouver proper, which has about 700,000 people, similar to Denver.)

The median price in Los Angeles is about CDN $1.23 million and, in San Francisco, the median cost is about CDN $1.57 million.

In Toronto, the median price of a home was about $905,000 in April versus Chicago where it was CDN $486,000. The report notes the populations are similar, and both cities are situated on the Great Lakes.

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Another comparable with Toronto is New York City — given both are their respective nations’ largest urban centres.

In New York City, the median cost is CDN $790,000 — though that includes eastern parts of New Jersey.

Jarvis suggests that the reason Canadian cities generally have higher housing prices than in the U.S. is likely because supply is much shorter in our cities than down south.

“Not only is there a shortage of places to live in our major cities, there are fewer cities that people can congregate in here,” he says, noting many newcomers move to Canada’s two largest cities.

“You can compare certain fundamentals like populations, economics and culture, but a big difference between nations is that the U.S. has many more big cities for people to move to.”

The upside for Canadian cities like Calgary is that population growth drives housing markets and economic diversification, Lurie says.

“Here, the population has been growing significantly, which ultimately leads to a more diverse economy,” she says.

“The more you grow, the more need you have for different industries to serve that bigger population.”

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