‘Common sense’ protects Calgary prices

by Olivia D'Orazio04 May 2015
A drop in supply helped protect Calgary home prices in April despite the continuing challenges of the oil market.
 
The average sales price of a home last month was $470,254 – down less than 2 per cent from the same month last year. The decline is modest compared to the 22 per cent year-over-year fall in actual sales. Only 1,957 properties traded hands, representing a 15 per cent drop from the long-term average for April
 
New sellers appeared to take their cue from the slowdown, with the number of new listings easing 18 per cent from April 2014’s numbers.
 
“Sellers have been either adjusting their expectations on price or delaying their plans about when to list their home,” said Corinne Lyall, the president of the Calgary Real Estate Board (CREB).
 
That orderly slowdown has helped guard against a flood of inventory on the market and a dwindling number of buyers unable to absorb it. That kind of oversupply usually precipitates dramatic price declines – something Calgary has sidestepped.
 
“Sales are pretty good, but you do hear that some people are holding off,” says George Bamber, a broker in Calgary, also suggesting that much of the decline is happening in the higher price ranges. “There are still sales going on, mostly in the low- to mid- (price range). You’re seeing pressure in the upper (range) but low- to mid- is not bad.”
 
Agents catering to that luxury market may struggle for some time to come as the oil sector bleeds jobs.
 
“Higher priced properties in the detached sector saw a noticeable decline in absorption levels city-wide, indicating there is less demand relative to supply levels,” said CREB’s chief economist Ann-Marie Lurie. “This does not come as a surprise as many of the job losses in recent months have occurred in the higher paying sectors.”
 
The oil shock, of course, is behind much of market’s current movement. Prices have recovered slightly, sitting around $60 a barrel. Still, as Bamber notes, thousands of Albertans, many with their home base in Calgary, have already been laid off. Fear of future cuts remains.
 

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