A senior Canadian economist says fear has obviously gripped Calgary’s housing market as MLS sales dipped by more than 34 per cent in February compared with a year ago and average sale prices were off by more than four per cent.
“Oil prices have fallen and that has a lot of people worried . . . When the market turns, either for the good or bad, then it’s really hard to call the top or the bottom,” said Robin Wiebe, senior economist with the Conference Board of Canada. “Fortunes have been made and lost on bets like that.
“Once fear grips a market, as it obviously has in Calgary, calling a market bottom is difficult.”
Where the market goes from here really depends on oil prices, added Wiebe.
Mike Fotiou, associate broker with First Place Realty, said February MLS sales were the slowest for the month since 2009. Sales were 25 per cent off the five-year average and 33 per cent off the 10-year average.
February marked the first month since March 2011 in which average and median MLS sale prices were both down year-over-year.
Meanwhile, the inventory of homes for sale is more than double 2014’s numbers, and the highest level since 2009.
“This is playing out exactly like a textbook would describe a market in theory,” said Don Campbell, senior analyst with the Real Estate Investment Network. “The high listings, lack of buyers in January, reflecting in lower transactions and continued increase in listings in February. As oil confusion continues, so will this trend.
“Builders beginning to slow down, will decrease average sale price into the spring, which will then awaken a few of the more aggressive buyers.”
There were 1,217 MLS sales in February, down 34.2 per cent from February 2014, according to the Calgary Real Estate Board — the second consecutive month in which sales plunged by more than 30 per cent.
The median price was down 1.2 per cent to $420,000, while the average sale price was down 4.2 per cent to $462,294.
But CREB said the benchmark price – what it terms a typical home sold – was up 5.77 per cent from last year to $456,300.
“Everyone has different reasons for making a move and so it’s difficult to predict how buyers will react to this market,” said CREB president Corinne Lyall in a statement.
New listings rose by 8.8 per cent to 2,950 and active listings at the end of the month were up by 109.2 per cent to 5,524.
Fotiou said new listings were only two per cent above the five-year average and 3.6 per cent below the 10-year average.
“We continue to see a low level of sales activity in February,” said Ann-Marie Lurie, CREB’s chief economist. “But one thing we have started to see shift is some of that level of listings growth has eased.
“If you look at last month, year-over-year growth was 37 per cent and it’s moved down closer to nine per cent. So even though we’ve seen that those inventory levels have risen to … levels we haven’t seen for some time, we still remain below the record highs that we saw in 2008.
“With that being said, because there is just generally more supply in the market that has put downward pressure on pricing.”
Lurie said there could be many reasons behind the slowdown in listings, including people waiting to see what will happen in the city’s real estate market.
She said expectations about the impact that lower oil prices will have on the housing market vary based on assumptions on how long the cycle will last and the resulting impact on employment and net migration.
“These differences in expectations will likely persist until there is some firm data to support assumptions about Calgary’s employment levels,” added Lurie in a statement.
Fotiou added that 27 homes in Calgary sold for $1 million or more during the month, compared with 66 last February – down 59 per cent.
Mario Toneguzzi, Calgary Herald
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