Are we seeing signs of our real estate market stabilizing?
This is a very difficult answer to provide with accuracy. I do see signs of our market stabilizing - I also see signs of this trend continuing.
The reason I write to this topic is because of an article in the most recent issue of the Calgary Real Estate News (issue 43 Oct 24, 2008 Pg. A2). The title is "MLS listings down a cross the country indicating a stabilizing market".
Quoting the article "The balance between sales and new listings has stabilized in many major resale housing markets in recent months. The trend stands out most in Edmonton and Calgary, where a sharp drop in new listings and rising sales activity has firmed up the resale housing market considerably since the beginning of the year".
Ouch. This is a prime example of media not looking at our market properly (in my opinion). Let’s look at why I feel this article is not factually accurate.
For starters, our 3rd quarter market results are never a ‘true’ outlook into our market. The reason is through July and August and the first half of September listings are always down - sales as well - more specifically listings. This article makes several references to the 3rd quarter stats showing this stabilization.
If you look at Calgary’s list to sell ratio in the later half of September through October, you will see our list to sell ratio below 45%. Much below a ‘stable’ market. In fact, our list to sell ratio has been closer to 30% on several occasions. The reported list to sell ratio for this past weekend was 37%.
As always, when you read media - take it with a grain of salt.
Where I do see some market stabilization is in the starter or first time home buyer market - this to me is a possible sign of our entire market stabilizing....possible sign. For homes priced $400,000 and up, the market is extremely difficult. Sales of single family homes priced between $300,000 and $350,000 is quite strong providing it is in a good community. Way more home buyers are able to afford a $350,000 home than a $400,000.
I will post the stats in a few days so you can see the price range ratios - the vast majority of home sales will be in a range of $325,000 and $375,000 - the starter home market.
My suggestion is we are going to continue to see the same market as we have today through into January/February - past that - difficult to say. I will take a wild shot into the spring - we will see much stronger signs of stabilization by May 2009.