Calgary real estate market forecast and my two cents.
According to Calgary Real Estate Board the year ended with Calgary real estate market continuing its downward slide with total sales in December down by 15% from the 10-year average. There were 1,100 real estate transactions recorded in December 2016.
Calgary Real Estate Board says the total number of MLS sales for 2016 was 17,809 which was 5.5% fewer sales than 2015. The benchmark price in Calgary dropped 3.8% year-to-year to $440,650.
The number of sales in 2015 actually dropped more dramatically than they did in 2016 – down 26% over 2014 figures. The last time sales numbers fell like this was in 2010 according.
Looking back to January 2016, Calgary real estate market had an optimistic forecast for the year but sales ended up being weaker than it was predicted due to unexpected unemployment growth. Statistics Canada reports that in January 2016 the unemployment rate in our city was 7.4%, already a concerning number. By November that figure rose to an alarming 10.3%, highest since 1993.
Benchmark prices for single-family homes dropped an average of 3.2% over 2016 to $502,242. It was not a good year for condo sales as the benchmark fell by 6%.
According to Calgary Real Estate Board one of the reasons that helped offset the downward trend was tight inventory. The number of new listings contracted in 2016 by 4.7%.
Predictions for the Year Ahead
On January 11, Calgary Real Estate Board held its annual forecast conference and announced its 2017 predictions before members, economists, investors and media. Here are some of the highlights:
Market Trends: With declines in total number of sales the past years, the forecast is for the Calgary market to slightly rebound in 2017. Number of sales in every quadrant and market segment is predicted to rise approximately by 3%. A gain over last year but still 12% below the 10-year average.
Price Trends: Despite the 2016 benchmark price drop Calgary real estate market is expected to rebound in 2017 with a price growth of 0.3%. The Calgary Real Estate Board believes this will be achieved due to growth in the single-family market with 0.8% price growth and 0.3% in the attached market. Losses are predicted to continue in the apartment market with a drop in prices of 2% which is better than the 6% decline experienced in 2016.
Oil Prices: The price of oil is something that can’t be disregarded when predicting economic conditions in Calgary. The price in January 2016 was around $29.01 US and then climbed during the year to $40 or $50 per barrel depending on the day. CREB says that oil prices should stabilize in 2017 and should stay over the $50 a barrel mark, rising no higher than $55.
Unemployment: It’s important to factor in Calgary’s job loss rate as this has a direct impact on housing in the city. CREB believes that after the alarming 10-plus % unemployment rate in 2016 that it will come back down to 7.8%. This should add some stability in terms of demand.
Net Migration: In 2016, Calgary lost 6,527 people but CREB predicts 2017 will be a year of recovery with 1,600 moving to Calgary.
Adding my two cents
Calgarians have been though economic ups and downs many times before, therefore there is that general optimistic feeling that economy in Alberta will begin to improve.
Current real estate market is a stable one, where buyers get their time to research and sellers and their agents spend their time on making their property stand out.
My advice for sellers is to ensure they hire a Realtor who will understand current market and have knowledge and skills to help them prepare their property for sale. Real estate market in Calgary is saturated, so a property needs to be presented professionally to outshine competitors.
Buyers have a great advantage of having time to consider various options and have their Realtor do due diligence on the home of their choice, without risking loosing the deal to competitors. My advise to buyers is to look for a home that has all the items from their wish list or even exceeds it or compromise it only for a superior location.