Over supply plagues once previously-booming markets such as Alberta.
Across Alberta, lower sales were accompanied by declining new listings in July 2016. This typically prevents further inventory gains and minimizes the downward pressure on benchmark prices.
By August 1st, the residential benchmark price was $440K similar to June, but still 4.2% lowers that July 2015 figures. While detached prices seem to be leveling, this is not the case for all property types. With over a 6 month supply of inventory in the apartment sector, over supply continues to create steep price declines.
According to the Calgary Real Estate Board’s annual forecast, released in mid-August 2016: benchmark prices are still expected to fall another 3.8% this year. While the market as a whole continues to be challenging for home sellers, the highest price declines are typically in the neighbourhoods and sectors where the largest amount of supply has built up, either from the resale market or the competing new home market.
In this kind of market, both buyers and sellers continue to be forced to adjust their expectations. July marked the 20th consecutive month of year-over-year Alberta sales declines. Prices in the detached property type segment of the market continue to be the most level while prices in the apartment property type continue to decline due to oversupply.
The best bet is to continue to sell the lifestyle that people are looking for. Not everyone is a pessimist about the damage done to the real estate market by low oil prices. What goes down usually eventually comes right back up – and this perhaps is the best way to simplify matters, and bring in more investors into currently depressed markets such as Calgary.
Thank you for reading the Real Estate Leads dot CA blog.
