Calgary Real Estate Review- Summer 2016

The gloomy media reports about today’s economy are unavoidable. By now you have certainly heard about drastic unemployment levels, low oil prices and perhaps you have been impacted directly. These same economic forces have indeed penetrated Calgary real estate market. Commercial vacancies are extraordinarily high and rumors of oce owners oering lease rates as low as operating costs just to avoid inevitable losses. The residential sales pace has been dramatically impacted as well. Though the number of sales decreased by only 7% compared to the same time last year, it is a rather alarming accumulation when you consider last year experienced a drop in sales of up to 35% from the previous year. Inventory is almost 17% higher than 2015 compounding the gloom in today’s real estate. In recent months we have seen inventory around the 6000 unit level where as a balanced market at this time of year is usually around the 4-5000 unit mark. CMHC also reports that the number of new home starts are down almost 40% in a reaction from developers recognizing the dicult sales environment. Though these eects have had a moderate impact on single family home sales, the apartment style properties have experienced the most signicant challenges. The rst half of 2016 have produced a denitive advantage for buyers. Simple laws of supply and demand prevail with downward pressure of property values. Given all the dramatic statistics indicating a signicantly depressed real estate market, it’s tempting consumers to expect equally signicant price reductions of perhaps 10-20%. Indeed there are many instances where sellers have dropped over $100,000 o asking price, especially in the higher price ranges over $900,000. But the reality is quite dierent, as property values have exhibited much resiliency. Actual average property values have decreased by only 3.4%. If you’re waiting for the bottom to fall out in the market, it’s not going to. When (if ) the barrel of oil climbs back to $65 you’re too late for bargain hunting.  Despite all the gloomy circumstances there are hints of optimism and opportunity. June’s statistics indicate an actual increase in average values for detached homes. The Conference Board of Can and a forecasts an increase in values up to 12% across Canada; especially Vancouver and Toronto. Local inventories have begun to moderate as well. It feels like we experience a surge of activity when the price of oil climbs to the $50/ barrel mark. I believe this is a time of opportunity, especially for the shrewd buyer. Although we haven’t experienced widespread price drops, with some patient investigation you can nd that real bargain. Today I am seeing many, many properties that have been on the market, trying to sell for over 100 days; average days on market is usually around 45 days. There are individuals who have been heavily impacted by conditions today and must sell and have become terribly motivated and negotiable. Sellers today are also impacted by the typical lull in the summer season. This is a great time to go bargain hunting and take advantage. Unfortunately, sellers must be patient, aggressive in the price and prepare your property to show at it’s best. Please contact me today! I’m happy to give you advice specic to your situation!