Real estate correction fears overshadowing facts

by Jennifer Paterson15 Apr 2015
Figures released earlier this month showed average home prices in Calgary declined in the first quarter of 2015, but experts say this drop-off is really just a sign of a normalized housing market.
 
“The figures showed a normal market,” says Susanita de Diega, an agent with Coldwell Banker in Calgary. “They are comparing this year to last year.
 
“Last year was a boom year; there was no way we were going to compete with those numbers because you can’t sustain it two years in a row. We were headed for a natural correction anyway.”
 
The Calgary Real Estate Board’s March figures showed that the first three months of 2015 saw low sales and elevated inventory levels, causing unadjusted benchmark prices to ease by 0.44 per cent, relative to the previous month, for a total average price of $454,300.
 
But de Diega says the absorption rates in March for detached properties was more than 22 per cent, almost equivalent to the rate for March 2011, and in some cases have increased compared to the February figures.
 
Veteran agents who built their businesses before the market suddenly skyrocketed on high oil values will likely continue being successful. Newer sales reps, however, will need to adapt to a slower market than they’re used to.
 
This demonstrates a return to a normal market, de Diega added, rather than a harbinger of a market decline due to sagging crude oil prices.
 
“There are quite a few reasons to buy an investment property in Calgary,” said de Deiga.
 
Elsewhere in the province, the facts point towards a silver lining amid the doom and gloom.
 
For instance, Stats Can showed better-than-expected employment levels in Edmonton, while CMHC’s housing starts increased to 1,727 in March, almost 1,000 higher than a year earlier.
 
MLS figures for Red Deer signaled a positive spring head, with 154 house sales in March 2015, nearly equivalent to the 159 sales in March 2014.
 

COMMENTS

Poll

Is a Toronto foreign sales tax a good idea?