Calgary home sales and prices expected to keep falling

There’s been a surge in new real estate listings in Calgary over the last couple of months as panic sets in over fears of low oil prices, but even as home prices continue to drop it doesn’t appear anyone is buying.

Home sales in Calgary fell 39 per cent in January from last year, overall home prices are expected to fall by 15 per cent, all while new listings have surged 40 per cent.

David Madani of Capital Economics warned this could just be the beginning.

“The 15 per cent is really only as things stand now,” he told 660News. “If home sales were to continue to fall over the first half of this year, then that 15 per cent figure will go up.”

The rich are feeling the pinch too.

The Globe and Mail spoke to a realtor who was flooded with calls from oil executives, watching their company stocks plummet in the wake of plunging crude prices, looking to sell their multimillion-dollar homes ahead of the new year, hoping to cash in before the panic reached the city’s housing market.

But sales of homes above $1-million fell 43 per cent in January compared with a year earlier, and there were no sales above $1.75-million last month, compared to 10 sales last January, even though there were nearly 300 homes for sales in the price range.

All of last year more than 850 homes sold for above $1-million.

Madani said there are concerns that lower mortgage rates will just make the retail situation worse.

“If the unemployment rate begins to go up in Calgary low interest rates won’t matter because, generally speaking, to get a mortgage or any type of loan one has to have a job,” he said.

It could also fuel greater overvaluation, higher household debt and more overbuilding.