House prices are weakening in Calgary, but it doesn’t look like the serious correction some expected at the beginning of the year. In fact, Calgary’s real estate market has moved from a sellers’ market in 2014 to a more balanced one now. And even some optimism looms, as the province has lived through boom and bust cycles before.
There’s a lag effect before prices can catch up to the drop in sales and buildup of inventory and that’s what’s happening now.
Job losses and further cuts in business investment in the oil patch are underway, but the Calgary Real Estate Board (CREB) forecasts benchmark home prices to decline by less than 1 percent for 2015.
CREB chief economist Ann-Marie Lurie spoke with Epoch Times and feels this downturn is different because the real estate market started from a position of strength as the price of oil began plummeting late last year.
“We’ve seen inventories go up, but they’re nowhere near the highs we’ve seen before that would warrant too much oversupply,” Lurie said. “We’ve just really moved into more balanced conditions.”
It might seem like ancient history, but Calgary used to be lumped in with Toronto and Vancouver as Canada’s three hot housing markets.
“If you think about what happened in January, it was more of a shock at the time. There was a lot more of ‘We don’t know what’s going to happen, we don’t know how bad this one’s going to be,’ what impact it will have,” Lurie recalls.
Back in January and February, home sales were declining at rates of close to 40 percent year-over-year with new listings increasing by over 30 percent. Inventory was basically doubling.
