In 2008 our real estate market experienced over-building and a large supply of homes combined with negative migration to our province (low demand for home buyers). This caused steep price declines. During the current oil industry crisis we have been lucky to have started with a low supply of homes. Todd Hirsch of ATB reports today this might be changing, especially in Edmonton. Migration could turn negative very soon yet builders are still building on spec. I could go on with in-depth analysis using graphs and charts but really it simply means prices will drop more rapidly than they currently are. Expect this in 2016. Todd’s report click here.
Calgary real estate market, calm but definite in its trend downward. Single (detached) home prices have slowly decreased to a near 5% drop compared to this time last year. Good news, there isn’t an Armageddon or mass rush to the exits we witnessed in October 2008. Prices can be expected to continue this downward trend as inventory increases and sales continue to decrease. Sales in October 2015 were down whopping 34% from October 2014.
Do you own an apartment condo and looking to sell? It won’t be pretty. There is nearly 6 months worth of active listings you are competing with. Prices have had a rough year (seen in the chart below). With new buildings being completed this winter, inventory and prices will continue to enjoy an inverse relationship.
What’s next? Migration is nearing negative numbers. As major oil companies continue with layoffs and major investment into our province evaporates, people will stop moving to Alberta. Once our migration numbers show negative numbers, real estate is negatively effected in the months following. Since builders haven’t over-built and the market has already been easing over the past 10 months, the landing should be soft, but, negative non-the-less.