Alberta’s Floundering Housing Market

Most people can see that every market has taken some financial hits, even the real estate market. Calgary has a 24% lower sales average than the past five-year average. This is on top of having a drop in energy prices. Despite a promising start in March, sales in the real estate market dropped in Alberta by 9% and new listings declined by 15%. The chief economist of AREA, Ann-Marie Lurie admits that these are unprecedented times with lots of uncertainty. There is no surprise that so many are concerned with the local housing market.
 
Unfortunately, the problem will likely continue through the next quarters. Even before the pandemic, Calgary had a sluggish housing market with sales and prices continuing to drop since 2017. Despite this, the nearly 10% decline in March sales this past year doesn't seem too bad. However, what it means is that home sales are 24% below the five-year average. New listings in and around Calgary have dropped by nearly 19%, which might take some pressure off the huge overstocked market.
 
What has contributed to the failing housing market in Calgary is the fact that they were already having problems due to oversupply and price declines, in addition to the oil price crash. The reduced demand for supply may help to prevent further price declines.
 
In Edmonton, sales didn’t take such a steep hit. Sales only dropped by less than 2% to 1,304. However, this is where the housing market for Edmonton had just a year ago. Tom Shearer, a Royal LePage broker said that the beginning of last year was the hardest year of real estate that he had ever experienced.
 
AREA canceled open houses two weeks after the WHO (World Health Organization) declared a pandemic. It doesn’t make sense to show a home when self-isolation and the virus itself make sellers and buyers wary.
 
Consider that there is a new normal for most markets and the housing market is no different. May agents are resorting to digital technology to sell homes. Although people want to walk around and see things in person, this just doesn’t seem possible. However, if they are willing to view it online then they can find realtors who have posted his or her listings online. They are typically able to see the interiors and exteriors of the home that they are interested in.
 
The region that was hit the hardest was Fort McMurray. Sales in this region dropped by 30% in March of 2019. This was the lowest since 2016. Current sales are tracking at 21% lower than the previous five years.
 
Grand Prairie also took a significant hit. It is the oil-and-gas community in northwestern Alberta where sales have dropped by 19% over the last year. Reports indicate that they are continuing to drop without a real end in sight. The new COVID-19 pandemic has taken a toll on practically every industry and every market in Canada.