Calgary real estate prices keep sinking

Calgary’s real estate market will continue its swoon this year and remain, at least until spring, a place where buyers continue to have the upper hand, says the incoming president of the Calgary Real Estate Board.

Bonnie Wegerich, who took the reins from outgoing president Ed Jensen today, said that in 2009, the price of single-family homes will continue sinking, decreasing by 2% to an average price of $451,120.

Condominium prices, she said at the organization’s annual conference, are expected to drop by 5% this year to an average price of $287,300.

Last year, prices for single-family homes and condominiums fell by 2.5% and 4.4%, respectively.

MLS listings, which peaked in May 2008 and have been slowly declining since then, will rise again this spring, Wegerich said, leading to “plenty of choice in most neighbourhoods.”

The pace of sales, made more swift by a return of consumer confidence, will turn the market around in the second half of this year, Wegerich predicted, and lead to an overall 5% rise in sales, led by a 10% sales increase of single-family home.

Jensen’s tenure, meanwhile, fell into a year that saw a dramatic slowdown in Alberta’s economy that also tapped the brakes of the Calgary real estate market, whose frenzied activity was second only to Vancouver.

But despite significantly lower sales — sales of single family homes fell by 27% last year — Jensen called 2008 a “reasonable year.”  Like Wegerich, he said Calgary’s economy remains fundamentally sound with Canada’s lowest level of employment.

Nonetheless, the gap between supply and demand that had already widened in 2007, grew even wider in 2008, as an ever-increasing number of homes hit the market for which there were no buyers.

“Consumers are sitting tight at the moment, and watching their dollars and the media at the same time.”  Underlying the woes of the province’s economy, Jensen said, is a lack of consumer confidence that late last year has probed depths not seen since two decades.  Consequently, potential buyers have adopted a “wait-and-see attitude,” he said.

Source: Calgary Sun

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