Veteran fears issues plaguing market may be long-term

by Justin da Rosa14 Mar 2016
A veteran agent in one of Canada’s struggling markets: “I’m not … optimistic that this is going to be short-term.”

It’s a sobering stance from a man who has seen a number of economic downturns and argues this one is different.

“The problem is right now Alberta is flat in terms of prices; if anything we’re having a correction downward,” Duane Ritter, an Alberta-based agent with RE/MAX, told REP. “I’m old enough to remember the other corrections but this one is different; people reacted to the last couple times but they aren’t this time.”

According to Ritter, there is a glut of listings and sellers are refusing to lower their asking prices.

“I don’t know if they’re hoping it’ll bounce back,” he said. You look at some of the listings and some of those have been up for 178 days.”

Albertans have obviously been impacted by oil price declines, with unemployment rates – increasing by 100,000 since oil prices starting dropping, according to Ritter -- and debt delinquency on the rise.

Equifax Canada reported last week that delinquencies for consumer credit increased by 25%. Further, Albertans have the highest debt load in Canada, with an average of $27,000.

And that will have an impact on the housing market, according to Ritter.

“There is no place else to get cash,” Ritter said, noting many in the province have had to rely on sales from unnecessary items such as cars, boats, and recreational vehicles. Once everything else has been sold, the homes could be next on the chopping block.

“If they aren’t making any income it’s going to impact the housing market,” Ritter said.
As for the future of the province, Ritter isn’t entirely optimistic.

“I think people are hoping it will bounce back and they will get jobs,” he said. “The world as changed and the oil sands are not what they used to be.

“I’m not … optimistic that this is going to be short-term.”

COMMENTS

  • by Byron McDonald 3/14/2016 11:49:10 AM

    Well, there certainly is one thing that is not the same as before; interest rates are at historic lows. The unwinding / deleveraging will take longer as a result.

  • by Scott Simmons 3/14/2016 12:16:47 PM

    Our market went into a long slump after the 2008 economic crash and I know being a Realtor in a downward trending market is very challenging. The sellers will go through 5 steps while selling in a soft market; Denial, Anger, Bargaining, Depression and the final step of Acceptance. One does not really want to be the first one to get the listing. It's probably best to be the 3 or 4th Realtor to list it. One can always tell the anger part and you really do not want to have the listing then.

    The best thing organized real estate can do is to give accurate market stats. In a soft market listings stagnate and the sellers want to re list to freshen up a listing. The AB boards should adopt aggregate days on the market. The DOM should be a running total of all the days on the market and take away the ability to re list. Re listing is the curse of a downward market. It will mask the true story of how bad it is. Unless the public and Realtors are willing to face the real numbers the market will languish longer than need be.

    The market will change, it just takes time, even on our sleepy little island that had been so slow for long is now seeing multi offers. The good news is so many agent will quit that when the market does come back those that make it will be in a good position. Good Luck to all in AB it's going to get ugly but hang in there.

    Cheers Scott Simmons
    Salt Spring Island BC

  • by Dealmaker Toronto Canada 3/14/2016 4:56:14 PM

    I think the 5 Steps you posted Simon are the steps you go through when you have incurable cancer.

    No one feels any sympathy for people in Alberta.

    They made alot of money over the past 15 years and if they didnt save any of it, that is their fault.

    Even people working at Tim Hortons were making money above the average in Canada.

    Suck it up Albertan's. This is the real world.

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