Over halfway through 2016, the Calgary Real Estate Board has issued its forecast for the balance of the year and it looks like we’re in for more of the same.
According to analysts, prices will continue to descend at insidiously slow rates while demand for homes throughout Calgary continues to soften, CREB® has predicted. Not a surprise considering Alberta’s economic climate. It’s like people are looking under rocks to find any small sign of recovery. Every time the price of oil climbs even a fraction of a percent, Twitter lights up with optimistic comments and Calgarians want to dance in the street.
Is it a good time to sell.. or not?
However, there’s been no significant indicators that the economy will soon improve and people can get back to work. In fact, many Calgarians may be holding off on putting their properties on the market as the stats show the number of new listings showing up on the market has eased off. Because the demand has gone soft this year, inventory is still at historic levels despite potential sellers holding off on listing.
Benchmark prices in 2016 have slowly decreased with more drops predicted for the balance of the year. Since the economic started to crater, benchmark prices have dropped by almost 5% and CREB’s prediction is a further 3.8% contraction this year. While there have been decreases across all market segments, with not all property types responding in the same manner, the hardest hit has been the apartment condo sector.
CREB® president Cliff Stevenson, quoted in the forecast report, indicates that the biggest price drops seen so far this year have been in Calgary neighbourhoods with the largest numbers of properties for sale. That includes re-sale homes and new construction. Everyone is adjusting expectations, often on a daily basis.
In sales volume, Stevenson and the CREB® analysist predict overall numbers to drop by 8% in 2016. This is following last year’s decline in overall sales of 26%. Ann-Marie Lurie, who is the chief economist at CREB® less-than-cheerfully admits that the scope of Alberta’s downtown was worse than everyone initially thought. There have more job losses and more folks leaving Calgary than originally expected making any sort of growth in Calgary’s real estate industry nearly impossible. Of course, any prior forecasts issued by CREB® have been tossed out the window.
Doing business in the “new normal”
When it comes to buying and selling homes in Calgary, it has to be business as usual, even though the economic story will likely stay the same for the rest of the year. People still need to see and there are those who still need or want to buy despite what’s going on with the price of oil. The challenge for Calgary REALTORS® is to keep abreast of reactions in the marketplace, continue to advise clients on how best to proceeds, stay educated about activity within their areas and communities of expertise and make strong decisions in the face of a not-so-strong economy.