Happy New Year!
In 2018, the Calgary Real Estate Market faced a decline with total sales dipping by approx. 15% and inventory levels increasing by an all-time high of 23%. This has been attributed to the loss of jobs in the energy sector, a high unemployment rate and strict lending rules.
Comments below were lightly edited for length…
Properly: What was the biggest real estate trend in Calgary in 2018?
Kate: In 2018, we saw many niche markets arise and the market was really divided by location and inventory style. For example, suburban and condominium markets were more heavily and negatively impacted. We also saw a lot of folks choose to renovate over purchase as they no longer qualified for their “dream home.”
Jared: According to the stats that we post on our website, the number of active listings rose disproportionately to the sales. With that increase, tied with the number of sales down, it made 2018 a tough year for most of Calgary.
Properly: What were the largest challenges for home sellers in 2018?
Kate: Buyer financing as a whole — the stress tests eliminating a large population of buyers from our market and tighter qualification restrictions — coupled with a challenging economy.
Jared: The biggest challenge for a seller in 2018 was understanding what the market (prices) was doing, specifically in their neighbourhood and home type. Staying ahead of the market sometimes meant taking different risks and using different selling tactics, which is not what sellers were typically used to in the past.
Properly: What are the real estate trends to watch for in 2019?
Kate: With a provincial election around the corner, I think there will still be a lot of “fence sitting” until people have more certainty in this Province. A change in government could lead to more capital investment, which in turn may lead to more consumer confidence and net migration back into the province.
Jared: We forecast that 2019 will be very similar to 2018 in many ways, and possibly harder in others. With the pending elections and pipelines, Calgary is in a tough spot, and real estate sales, prices and momentum are directly affected by these pending items.
Properly: What are you most concerned about in the 2019 real estate market?
Kate: Impending interest rate hikes and the continuation of stress tests coupled with continuing economic challenges. If we see major rate hikes we could see a lot of folks facing hard times.
Jared: The biggest concern is always the unknown. So instead of focusing on what we don’t know, we need to be proactive on what we can control. For sellers, this is the preparation and pricing of their home and having a solid marketing strategy for when they need to sell.
Properly: What advice would you give to someone looking to buy their dream home in 2019?
Kate: Stay patient, and find a Realtor who is able to educate you as to market conditions and trends. Also, make sure you have your ducks in a row with respect to financing. Gone are the days of a pre-approval being a sure fire ticket.
Jared: Best advice: if you are planning on buying and living in this home for 5-7+ years then go for it. Negotiate like crazy and watch for motivated sellers. However, if you are thinking of buying a home and there’s a chance you may need to sell it in the next 2-3 years then it actually may be better for you to rent because the market has so many unknowns right now.