It's no surprise that a bunch of industries are getting hit hard by the pandemic. The real estate market has also taken a tumble recently. According to a report released by the Calgary Real Estate Board (CREB) on Friday, May 1, the market is losing a massive amount of sales and the prices are set to drop even further.
Narcity spoke to Anne-Marie Lurie, the chief economist at CREB, who told us that the market is seeing some truly dark times in Calgary at the moment.
According to the report, sales in all types of real estate have hit lows in the past month.
Altogether, sales went down by approximately 60% for the month of April.
But Lurie tells us that this isn't necessarily new for Calgary. The market has been struggling since 2014, but the pandemic has undeniably worsened the downward trend.
"While sales are down, so are the new listings," she revealed.
She said this doesn't really come as a surprise because most people want to stay put right now due to the social distancing measures put in place by the government.
People don't want to buy right now but people also don't want to sell right now.
At the end of the day, supply and demand is the name of the game when it comes to real estate, much like any other aspect of the economy.
Does this mean that slower activity is bringing the prices down? Lurie says yes.
"Supply levels have come off but they haven't necessarily come off enough, and we're seeing downward pressure on pricing," she revealed.
She said that we're yet to see the full impact on prices but according to the board's projections, the average prices of real estate will drop by about 3% this year alone.
Of course, these are average prices. So a dip of about 3% doesn't speak for every single property that's on the market right now.
The home sales that are taking place right now mostly belong to properties in the lower-end range.
Whereas properties over $600,000 are experiencing a steep drop in sales.
It seems that people don't want to purchase the more expensive homes unless there is more certainty about the current situation at hand.
So that pushes down the average price even more.
However, a drop of 3% over the course of a single year is still fairly significant, Lurie said.
Lurie revealed that when the board sat down at the end of last year and calculated the prices, they figured that real estate was down by 11% in the last five years.
We're headed to a 3% decrease in just this year alone.
She also stated that if the supply of homes gets higher, then prices will come down even faster.
Lurie wants us to know that it's not just the COVID-19 pandemic that's directly been bringing the prices down.
The crisis has also impacted oil prices, which, as any Albertan would know, hasn't been the easiest on the province's state of employment and economy.
"It's the energy sector," Lurie shared. "The current situation there and how it influences employment does remain a concern for the market."
However, just because prices are set to come down and houses might become cheaper in the near future doesn't mean that it's the best time to splash your cash on a new luxury property.
Alberta has some real gems when it comes to jaw-dropping mansions but Lurie wants the public to be cautious if they're looking to dip their toes in the market soon.
We asked her if the lowering prices mean that it's now a good time for Calgarians to buy properties.
"It comes down to the property type they're looking for," she said. It depends a lot on whether they're looking in the upper or lower range in the market.
Prices may be heading downwards but that doesn't necessarily mean that it's going to be a walk in the park buying houses this year.
Especially at the lower end of the market — that's where the competition really ramps up.
At the end of the day, Lurie says it's about our "long-term vision" that should decide when is a good time to buy.