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Calgary’s real estate market is nearing a critical junction more than six months after oil’s dramatic decline first started threatening what had largely been seen as the strongest housing market in the country.
So far this month, total sales are down 36 percent while new listings are rising nine percent. Median prices are down half a percent, while the average home price is down 3.4 percent, according to the Calgary Real Estate Association.
Clearly, it’s a bad time to sell your home in Calgary, yet those looking to sell are still clinging to hopes that oil will rebound and revive the dismal economic prospects in Canada’s energy centres.
Sherry Cooper, the former chief economist at BMO, now at Dominion Lending Centres, says sellers in Calgary’s real estate market will be in for a rude awakening if they sit on the bench. She says 10 and even 20 percent price declines are on their way, but those deep cuts need to be contrasted against Calgary’s juggernaut gains on the back of oil above $100 a barrel.
“Declines from what level? Declines from levels that were already inflated. The average price of a house in Calgary had increased dramatically. In fact, it was the strongest housing market in the country from that perspective,” said Cooper.
Condos have been the hardest hit in February; average prices are down eight percent to $304,000. Detached houses fell 3.3 percent to $534,000, and attached homes fell 2.2 percent to $417,000.
The Conference Board of Canada's latest provincial outlook says Alberta will fall into recession and stay there until at least 2016.