Q1 Market Update – an unfortunate turn of events

If your inbox is anything like mine, it’s been flooded with Covid-related emails the past couple of weeks. We have purposely held off on sending a Covid policy email so as not to add to the clutter.

We have been in touch with our active clients to discuss health & safety procedures during this time and if you have any questions about Covid as it relates to real estate, we are happy to speak personally to you.

In the meantime, we want to continue to offer market and industry updates.

The year started off with predictions for a stronger market in Calgary with flat prices, a welcome change from the last few years of price drops.

Then March happened. After seeing an average of 42 properties sell per day in February and 46 per day for the first week of March, there were just 27 per day for the last week of March.

As dismal as this drop looks, 27 is still not zero. Real estate has been listed as an essential service, along with hundreds of other business types, by the Alberta Government. The industry does continue to operate, as there are people that need a place to move to in all kinds of circumstances.

However, let there be no mistake: prices will drop in Calgary this year. Not only will there be a massive slow-down in number of sales in the short term, there will be price drops later in the year as Calgarians’ finances are strained by layoffs and another recession.

The amount of price declines is yet to be seen and we will update you with any updated forecast released by the Calgary Real Estate Board.

This means that sellers need to adjust their expectations (again). However, the buyers that remain in the market now are serious buyers and are going to benefit from very low mortgage interest rates, so some are still ready to make a decision.

The number of sales recorded in March was down 11% year-over-year but down 37% from long-term averages. Real estate doesn’t see huge price swing in short time periods like the stock market, so the impact of the lower number of sales hasn’t been seen yet – detached home prices were down just 0.15% year-over-year and apartments down 2.4%.

On a lighter note, two features I think we are going to see become increasingly popular as a result of Covid are home offices and home gyms 😉

So many friends and clients lately have been either thankful for having those spaces in their home or wishing they had them! So if you are thinking about a home renovation projects while you are spending more time at home, maybe look to add one of these!

Take care everyone!

-Amie