City’s sales tank as prices hold out

by Olivia D'Orazio03 Mar 2015
Calgary-area sales for the month of February dropped by more than a third year-over-year, according to a report by the Calgary Real Estate Board, as residents aim to cash in on the weakened market.
More people put their homes up for sale in February, driving listings up 8.82 per cent year-over-year, but only 1,217 properties were sold during the month, a 34.22 per cent drop from February 2014. Median price, meanwhile, dipped just 1.15 per cent to $420,000.
“The prices are what they always have been,” says Duane Ritter, a sales rep in Calgary. “[Residents] are saying, ‘If I can sell it I’ll sell it’. But they’re not going to be the lowest guy on the block. There’s a steady market.”
In areas less hard-hit by slumping oil values, homeowners are aiming to take advantage of low interest rates. They’re listing their homes for sale with the intention of moving up the property ladder once home prices begin to loosen. Agents on the ground have noted tempered sales, particularly in the high-end price ranges and among first-time buyers.
“There are some people questioning if they should buy today, but the only people questioning that are the first-time buyers,” said George Bamber, a broker and owner in Calgary. “But for the people who already own property, the low- to mid-market is fine.”
Indeed, CREB reported an increase in year-to-date sales for properties lower than $300,000 and for those between $400,000 and $600,000.In the higher-end ranges, YTD 2015 sales were slightly lower than YTD 2014 sales, but were at par or slightly higher than those sales levels in 2012 and 2013.
Still, oil remains the greatest impact on the market. Large-scale layoffs have been reported from the regions most reliant on oil production, though many agents have reported good business despite the economic uncertainty.
“The world is not ending out here, but it is correcting itself and, depending on how long the prices stay where they are and how low they go, there will be a ripple,” Ritter says. “We just don’t know how big the ripple is going to be.”
The latest StatsCan employment survey – albeit, ending in December – reported an increase in employment in the province, apparently supporting agents’ claims that business, while maybe not great, is still buoyant.
“Expectations vary significantly when talking about the impact that lower oil prices will have on the housing market,” said Ann-Marie Lurie, CREB’s chief economist. “This wide range in forecasts is often related to assumptions about how long the cycle will last and the resulting impact to employment and net migration. These differences in expectations will likely persist until there is some firm data to support assumptions about Calgary’s employment levels.”

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