Today upon examining the mls database, as of 1400MST we are sitting at 5042 homes for sale. Simply incredible.
As we can clearly see right now, the number of home seller’s is definitely surpassing the number of home buyers.
This is an interesting topic not being discussed by the media. When you research the Canadian real estate markets, many talk about the boom out west - especially in Alberta - mainly here in Calgary. The Calgary Herald reported on September 20th an article called “Housing Affordability Slips as Prices Climb” - in this article they are quoted by Derek Holt of RBC Financial Group “As new listings are simply unable to keep pace with sales, there is little near-term relief ahead for prospective buyers...” This not currently the case. Since the middle of August, if one were watching the list to sell ratio’s on the Calgary MLS system, you would have seen a complete reversal of market conditions compared to the first and second quarters of 2006.
When you examine the market closely, you will also see a large number of empty homes being sold - or trying to sell. When you have a surge of new listings in a market with plenty of homes currently pushing 60 days on the market - which are now vacant - you will see a relaxation in pricing. The June house prices simply are unable to sustain themselves.
Many homes listed in July and August are still for sale. A large number of these home sellers have purchased new homes and either have taken possession of or rolling up to possession dates - they still need to sell their original home. They have lots of competition. The only way their home is going to sell is to drop that price.
The headlines in today’s paper should be “POP GOES THE MARKET”
Sit back and watch prices slip backwards. How much though is debatable. Ask me in December and I will have a stronger idea of pricing for the first quarters of 2007.
Does this worry you? Are you a home owner who now feels you “overpaid” for a home?
Unless you are going to sell right away, I would not be concerned at all. Real Estate is a long term investment. The market goes up and down constantly with an overall average increase. In 10 years from now we will look back at a $400,000 average home price and think - wow was that ever cheap!!! This providing our world economy continues as is.
A comment from yesterdays note is “Is Calgary's bubble bursting? I certainly think it is time for a deflation....?”
What do you think? I certainly think so. Continuing from this comment “...What is the price of oil today?” Reality is, our real estate market is very dependant on oil prices.
What do you think is going to happen to the Alberta economy when world crude prices come down to earth? History shows these prices will fall.