With the latest sales numbers showing no signs of improvement in Calgary’s housing market, one real estate analyst says he expects prices to fall even faster in the months to come.
Don R. Campbell, senior analyst with Real Estate Investment Network, said there is always a lag effect that keeps the real estate market from feeling the full impact of an economic downturn early on.
“It’s not until 18 months after GDP starts to drop that the economy really starts to hit the housing market,” Campbell said. “We’re now at that 18-month mark where reality and actual economics start to kick in.”
According to the Calgary Real Estate Board, March home sales in the city totalled 1,588 units — 11 per cent below the same time last year and 28 per cent lower than long-term averages for the month.
The supply of homes on the market, meanwhile, continued to rise, with 6,084 active listings in March — up 6.7 per cent and the highest level in at least two years. Calgary’s benchmark price was $442,800 in March, a 0.5 per cent decline from February and 3.5 per cent lower than levels recorded last year.
In the condo sector, benchmark prices have been trending down since late 2014. In March, benchmark condo prices totalled $281,300, seven per cent lower than levels recorded prior to the slide and 4.93 per cent lower than levels recorded last year.
After the first quarter of the year, condo sales totalled 554 units, a 17 per cent decline from the same 2015 period.
Campbell said it is almost “textbook” how the market is performing.
“There’s no timing a top or a bottom — you can’t do it in the stock market and you can’t do it in real estate,” Campbell said. “But this is a bit of an inflection point, where you are going to start to see increasingly more deals available in the condo market for those who are wanting to buy.”
Cliff Stevenson, president of the Calgary Real Estate Board, said there are no surprises in the March numbers.
“We were definitely anticipating another down month. There were no economic indicators that we would be seeing any kind of improvement,” he said.
Stevenson said it’s impossible to predict if sale price declines will accelerate from here on in, but added that prospective homebuyers seem to be taking their time, waiting to see how it will all play out.
“We are still dealing with buyers who are trying to time the bottom. They’re taking that wait and see approach and expecting further declines,” he said.