It’s the age old question -- “What’s going to happen with the market,” that fills my inbox quite regularly these days. Everyone knows real estate pays off in the long haul, but a lot of people are afraid to jump in when prices are escalating at a more than healthy clip.
Is there really a way to monitor interest rates and prices to eliminate your risks? First let’s start with real estate prices.
Like any other product, real estate prices are driven by supply and demand. Frankly, this is one of the basic principles that helped sustain many real estate markets across the country through this latest recession. While metropolitan areas such as Calgary and Vancouver were growing their job bases through the 1990s, local jurisdictions were afraid of losing open space to houses -- so they passed laws to limit development.
I like what one developer said when arguments were flying high in defending the development of property for houses -- “Homes are where the jobs go at night.”
So what’s this market doing now? That’s always the first question folks have as they consider getting in to the fray of the ever changing landscape of Calgary’s Real Estate market. It’s painstakingly obvious things have changed since earlier this year. It’s hard to believe that early in 2006 there were hardly any homes for sale in the entire city when now there are almost 7000 listings trying to trade on the Calgary Real Estate Board MLS database. Seldom in this market are we seeing competing offers anymore unless a property is listed below perceived value. Couple that with “far below” sales statistics for recent months and it’s not hard to appreciate the challenge right now of getting your home sold.
Kevin Clark, president of the Calgary Real Estate Board had this to say about our current market conditions:
"With absorption inventories now exceeding three months supply we have, for the time being, left the booming market far behind. Sellers needing to sell in 2006 should consult carefully with their REALTOR® to price their property competitively for a successful sale. Buyers, on the other hand, would probably be wise not to become too cavalier about this temporary situation, because they may once again pay more next year."
He went on to add these comments:
"(Current market conditions) tells me there’s a fairly significant portion of the detached home marketplace that was pricing themselves out of the market”, said Kevin Clark, president of CREB. “If you were a seller today and you had to sell because you’re taking possession of a new house, you need to be very careful with your pricing to be successful".
But there is light on the selling horizon. Interest rates are expected to drop in the next few weeks and 40 yr amortized mortgages (insured) are now a reality in Calgary. Recent rumors also have it that 50 year amortization is on the way. This brings mortgage payments down significantly for buyers qualifying to buy a home. In other words, recent mortgage market trends are making house shopping, buying and owning cheaper for the Canadian consumer.
Are you entering the Calgary market? If so, it's crucial, now more than ever, that both you AND your agent completely understand the rules of supply and demand and its affect on Calgary's market. To help, we're providing answers to your questions here at CalgaryRegionHomeSales.com and we invite you to use this resource to its fullest advantage. From the numerous links on both sides of this home page feel free to order reports, an area sales overview, or register for a Calgary instant property search. There is no obligation to use this resource and you'll find it quite concise in its content.