Calgary Real Estate Blog

As Alberta’s economy continues to sputter, with unemployment hitting levels we haven’t seen since the early eighties, one would expect our once heated real estate market to be cooling off big time. Listings are way up over last year as people look to downsize, leading to an abundance of selection from which buyers can choose. A surface reading would suggest prices should be dropping.

But they’re not. Calgary’s average prices for July and August were actually up year over year, with only a 15 percent increase in the average number of days properties are listed on the market.

So why would that be? Late last month the CBC ran an excellent article exploring this very issue. Based on information from the Department of Finance, the conclusion the article reaches is that much of the unemployment our province is experiencing has hit itinerant workers – meaning those who came from other provinces to fill jobs in Alberta – who weren’t homeowners here, and have since returned to their home provinces. This has the effect of limiting downward pressure on Alberta’s housing markets (while spiking the rental vacancy rates). Read the article for more in depth analysis.

If the economic downturn continues, of course, its impact on the real estate market could be more pronounced. For the moment, however, housing sales remain a relatively stable component of Alberta’s economy.

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While we’ve definitely transitioned to a balanced market, as lower oil prices have cooled Calgary’s economy somewhat, it remains a great time to sell your home, especially if it’s valued at less than $500,000. The luxury market is taking a hit right now – if you’re looking for something in the $1 million-plus range, I can get you a great deal – but low interest rates are driving strong demand for detached, single family residences priced between $400,000 and $500,000, with many selling within a couple of weeks of listing for very close to asking price. The number of properties on the market in May 2015 was down by more than a quarter from previous years, and that means the best priced properties available will be snapped up quickly – average resale prices are down only 1.5 percent year-over-year.

Things are certainly looking more positive than they were a couple of months ago, and make me rather optimistic for how things will play out in the next six months. Yet more proof that our properly managed real estate market, backed by a reliable banking system, has warded off any hint of a housing bubble; the growth we’ve seen, while impressive, is both reasonable and sustainable.

To talk about your options in listing your own property, please contact me today!

Here we are starting off a new year and, as is often the case in Alberta where unpredictable resource revenues can drive the economy like a 14 year-old with his learner’s permit, markets and fortunes are highly unpredictable. Unpredictability can lead to fear, and fear can lead to bad choices.

So, I encourage you, as much as is possible, to take a breath and not get too wrapped up in the apocalyptic talk of bargain basement oil prices and an exodus of producers from our province.

Yes, the global oil market is somewhat flooded right now, and that’s not good in the immediate term for companies operating in this province, especially smaller operations with thin margins and little cushion. Businesses will inevitably pull out or cut back, and that means lost jobs, and that’s always tragic.

However, some economists are looking at the worldwide picture and Alberta’s history, and are taking an optimistic view. Three were asked by Maclean’s magazine to give an outlook on 2015 all suggested oil prices would be back up to the $75-$80 per barrel range by year’s end.

This isn’t a blog about oil, though; it’s about real estate. Calgary’s market no doubt had the best year in the country, and while things are inevitably going to slow down a bit, there’s nothing to suggest we won’t lead the pack again in 2015. From April 2013 to April 2014, nearly 40,000 people moved to our fair city, and they gotta live somewhere. Our red hot economy might experience a bit of a cool down, but I expect Calgary will continue to offer bountiful employment in a variety of industries, keeping the real estate market healthy. Interest rates aren’t expected to spike any time soon, and inventories should remain stable; you’re probably not going to see your property value go up 15 percent next year, but it will probably go up at least a bit.

My dad and I can count 2014 as a banner year for us, as we were steadily busy throughout, with periods of extreme activity keeping things interesting. A heartfelt thank you to all of my clients, both buyers and sellers, along with my trusted vendors, and of course my family who put up with an unpredictable schedule and obnoxious hours. I truly love what I do, but it wouldn’t be possible without the support of these people.

All the best to you and your family in 2015 – it’s going to be an exciting ride!

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