Are dark clouds ahead for the Calgary real estate market?
Stories like this one in the Calgary Herald certainly give that impression. They imply a full-fledged buyers market is already at hand and that, due to a lag effect, sellers can expect to feel the full impact of negative economic factors over the next few months.
When stories get more aggressive during a time of uncertainty, a broader perspective is often helpful for those navigating today’s market. Here are some key points to consider:
Four things to consider
1. Similarities with recent history. Every situation presents new challenges, but it’s worth keeping in mind we saw a very similar market scenario evolve starting back in 2009-2010. We saw people losing jobs. Oil going under $30. Global factors causing problems for our resource-based economy. The lag effect of all of this on the market was felt primarily in 2010. That situation feels similar to where we are today. It was a challenging time for a while. But it didn’t last forever. At the first opportunity for a rise in consumer confidence, the trend shifted in a hurry in the opposite direction.
2. Putting more context to listings numbers. The number of homes on the market has risen to over 6,000, as indicated by the article. But rather than being unusually high, this number is actually within the average range. To constitute a full-fledged buyers market, the number of listings would need to go into the 7,000s. Maybe that will happen – time will tell. But the key factor at the moment is not as much about a high number of listings as it is about a current reduction in buyer activity. A lot of this can be attributed to the greater patience and lack of urgency buyers are showing as they wait for stronger signals on market direction.
3. Looking at the current shift. Neither of these points take away from the thrust of the article, which is correct – there is likely to be a further supply and demand shift, with more product and less demand. But potential change is always right around the corner. The moment oil starts shifting up again the trend can change overnight, just like it did in 2010-2011.
4. Today’s opportunity. Buyer patience can be a good thing. But in a situation like the current one there is also a danger in waiting too long (See my recent post on this topic). For buyers who find an opportunity today that is a good fit, we already know the timing is very positive to make a move.
Will more ‘deals’ be available in a few months compared to today? Perhaps. But I find that for many buyers the priority is finding the specific property that is the best place for them, and grabbing it when they find it, rather than trying to predict and capture the absolute best timing for the best deal. Calgary and its real estate market have long rewarded people who make sound decisions based on what they want and can afford – that hasn’t changed today. For buyers ready to find that next family home or investment option, there is a lot of great opportunity right now.