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Fort McMurray's fall: A housing bust hits Canada’s energy boomtown

PART TWO OF BNN'S WEEK LONG SPECIAL COVERAGE: CANADA'S NEW ENERGY
 

“Business as usual” is how Marian Barry describes the real estate activity in Canada’s oil sands boomtown.

The former president of the Fort McMurray Real Estate Board acknowledges there has been a change in what was once among Canada’s hottest housing markets as a result of the crash in crude oil prices and the tens of thousands of layoffs that have followed over the last year. She nonetheless remains optimistic.

“You work around [the downturns], you accept them, you work a little differently perhaps, back in the mid-80s was when we saw a similar situation - and in ’07 and ’08 as well we had a little bit of a downturn, too - so it is business as usual for the most part,” Barry said in an interview inside the Board’s modest headquarters just off Franklin Avenue; Fort McMurray’s main drag.

“It might be a longer period of time that we’re going through this change, but all we need is for the price of oil to go up and we will see things start to change again.”

It is hardly business as usual, however, for those who have no choice but to sell in what has quickly become a buyer’s market.

“It is emotional,” said Nicole Scott.

Trained as a music teacher and originally from Saskatchewan, the 31-year-old came to Fort McMurray in July 2011 to join her now-husband Charles (also 31) who was working in the oil sands at the time as a chemical engineer. He purchased a townhome in one of the city’s more established suburbs one year earlier, in April 2010, as a way of avoiding what at the time were skyrocketing rents.

Charles has since taken a new job in forestry, which means the young couple (along with their two-year-old Bernese mountain dog Kato) have to move across the Rockies to Prince George, B.C. Despite tens of thousands of dollars spent on upgrades and a cut to their asking price, their home sat on the market for more than five months without attracting a single offer.

The Scotts ended up taking their home off the market in mid-October after managing to find a tenant willing to rent it for a six-month term; no small feat in a market where roughly one in five rental units is sitting vacant.

The hope, according to Charles, is to relist in the spring when the market has improved. Or, rather, if the market can improve that soon.

Experts say the oil price rebound the Real Estate Board is counting on to stem sliding home prices will take years, not months. And even then, Barry expects the strongest possible recovery the market can count on will be annual price growth in the 2-3 percent range; hardly the 10-15 percent growth that the market enjoyed in the first half of this decade.

While slower price growth certainly would be more sustainable, the prospect of having to wait several years for home values to begin growing at all (after having lost an average of more than $100,000 in the past year alone) only extends the Scotts’ struggle to sell.

“Without the investment in oil,” Charles said, “there is no confidence in the housing market.”

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