Buy­ers’ mar­ket of­fers plenty of prop­erty op­tions

Prices fall to 2014 lev­els due to ‘glut’ of re­sale list­ings, strug­gling econ­omy

Calgary Herald - - NEW HOMES - MARTY HOPE

Cal­gary’s re­sale hous­ing mar­ket con­tin­ues to be rat­tled by the sput­ter­ing eco­nomic engine, grow­ing sup­ply lev­els, de­clin­ing sales, mort­gage stress and sag­ging prices, ac­cord­ing to those in the in­dus­try.

From a price per­spec­tive, Gary Ma­cLean, a 32-year re­al­tor with ReMax Cen­tral, says prices at the end of Septem­ber were sit­ting at 2014 lev­els.

He says the me­dian price of a condo is cur­rently $30,000 be­low where it stood at the be­gin­ning of 2014, and the me­dian for sin­gle­fam­ily homes has not moved up nor down.

Ma­cLean says prices peaked in Fe­bru­ary of that year and oil crashed in June.

“That is not good news for home­own­ers, but great news for those buy­ing. I can think of nowhere you can buy a home in 2018 at 2014 prices,” he says.

His fig­ures show that at the end of Septem­ber there were more than 7,900 prop­er­ties listed for sale on the MLS sys­tem.

“And that fig­ure does not count all the homes be­ing built and thou­sands of con­dos un­der con­struc­tion,” he adds.

The sales-to-list­ings ra­tio for con­dos, ac­cord­ing to Ma­cLean, has one unit selling for ev­ery 7.7 on the mar­ket; the ra­tio for sin­gle­fam­ily homes is one sale for ev­ery 5.6 listed on MLS.

“This is not a time to be test­ing the mar­ket,” Ma­cLean adds. “With this glut of homes on the mar­ket, it is so im­por­tant that sell­ers price their home cor­rectly. It’s a buyer’s mar­ket and they have lots to choose from.”

For its part, the Cal­gary Real Es­tate Board says sales to­talled 1,272 in Septem­ber, down 13 per cent from the same month a year ago and “well be­low” long-term av­er­ages.

“Cal­gary’s econ­omy con­tin­ues to strug­gle with un­em­ploy­ment, which rose again last month to over eight per cent. Con­cerns in the em­ploy­ment mar­ket, higher lend­ing rates, and shaken con­fi­dence are weigh­ing on house de­mand,” says CREB chief econ­o­mist Ann-Marie Lurie.

“At the same time, sup­ply lev­els re­main high, re­sult­ing in per­sis­tent over-sup­ply and price de­clines.”

The board re­ports its in­ven­tory of homes is just over 7,900, push­ing the months of sup­ply to 6.25, and that con­tin­u­ing over-sup­ply is putting down­ward pres­sure on prices.

Lurie re­ports the un­ad­justed city­wide bench­mark price was at $428,700 at the end of Septem­ber, nearly one per cent be­low the pre­vi­ous month and three per cent be­low year-ago lev­els.

De­scrib­ing this as the “new nor­mal” for Cal­gary ’s real-es­tate mar­ket, CREB pres­i­dent Tom West­cott says some po­ten­tial buy­ers look­ing to move in the mar­ket­place may find their sales ex­pec­ta­tions might pre­vent them from pur­chas­ing.

“It has been four years and nine months since hous­ing prices peaked, and though they seem to be lev­el­ling off, I can­not pre­dict when they will rise again,” says Ma­cLean.

“So this is an op­por­tu­nity for buy­ers to pur­chase homes at prices that have not risen in years.”

The Cal­gary Real Es­tate Board re­ports that con­tin­u­ing over­sup­ply in the hous­ing mar­ket is putting down­ward pres­sure on prices. “This is not a time to be test­ing the mar­ket,” says re­al­tor Gary Ma­cLean.

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