Since the Oil and Gas sector has been in a tailspin, Calgary home buyers have been thinking it is only a matter of time before housing prices take a big dip. Buyers have been waiting patiently for this looming correction, some people have told me it is only “a matter of time”, “houses are priced at $100 oil and need to come down”. But why should they come down? Just because someone wishes them down does not make it so. Yes many people are hurting through this prolonged oil and gas recession but why haven’t prices declined?
I don’t think there is one reason but many reasons for the lack of a correction. For housing prices to decrease certain things have to happen, either demand has to dry up or the market has to be over supplied, if both conditions persisted you would have sellers competing for a very limited number of buyers and that is when you see big price reductions. Clearly less people are buying homes, in 2016 11,210 homes were sold, well below Calgary’s 10 year average and we have seen substantial population growth over the past 10 years so you know there are a lot less buyers. So why haven’t prices decreased?
We had a small decrease in home prices in 2015 and then a very flat 2016, and now we are 3 complete months into the 2017 calendar year. The Calgary detached housing market has seen some interesting changes. The total number of active listings has declined 25% or roughly 1000 fewer homes are for sale. While at the same time we have seen an increase of 20% in home sales YTD, and April has started out 32% stronger then April 2016. This looks like a classic under supply over demand situation, which will only result in prices going up not down.
So is this a good time to buy? Well that would depend on a number of personal factors that each buyer has to ask themselves, such as why are they buying a property, how long will they hold the property, what are they trying to accomplish, and what is their personal financial satiation. There could be many reasons why it is not a good time for you to buy, but for others this is proving to be a very good time to buy. Feel free to call us to discuss the Calgary market in more detail and determine if it is the right time for you.