How is COVID-19 Affecting the Real Estate Market?

Calgary Real Estate Podcast with Eric Mortimer

If there is anything our team can do to serve or support you, please reach out to us. Licensed real estate agents have been deemed an essential service and brokerages are encouraged to remain open. Homes are still selling and our closings are still going smoothly. We have had four in about the last week and there were no hitches or delays or issues with the banks, lawyers or land titles or anything. Real estate can be bought or sold safely. We have implemented new protocols, systems, and strategies for listings, buyers, virtual meetings and showings. Read COVID-19 Information for Real Estate Consumers here. General Eric Shinseki said: “If you don’t like change, you’re going to like irrelevance even less.” Take your current situation; play it forward 6 months then plan today for that tomorrow. The worst thing you can do is freeze up. Fear and doubt have killed more plans than failure ever has. If there is anything our team can do to serve or support you, please reach out to us. It doesn’t need to be real estate related. We are very well connected with people from all walks of life. Also, remember to go to 5kdraw.ca for weekly and monthly drawings, and of course the grand prize draw of $5,000. What’s happening in the market? March sales activity started strong, but quickly changed with social distancing, business closures, layoffs and the dramatic shift in the energy sector. Overall real estate sales in the Calgary Area are down 11 % from last year. This is the lowest sales number in 25 years. New listings dropped by 19% this month. This decline in new listings compared to sales caused supply levels to ease and helped prevent a larger increase in oversupply. Overall, the months of supply remain just below five months, similar to levels recorded last year. Prices were already forecasted to ease this year due to oversupply in our market. In March, the citywide benchmark price was $417,400. This is nearly 1% lower than last year’s levels. The reduction in both sales and new listings should help prevent significant price declines in our market. However, price declines will likely be higher than originally expected due to the combined impact of the pandemic and energy sector crisis. HOUSING MARKET FACTS Detached Detached sales eased by 15% this month, driven by pullbacks in all districts except the North, which remained flat compared to last year. The decline in sales was met with a larger decline in new listings, causing inventories to fall by 17% and keeping the months of supply slightly lower than last year’s levels. Detached benchmark prices have remained relatively unchanged compared to last year at $480,800. Price declines this month continue to be the highest for the City Centre, North, East, and West districts. Apartment With 217 citywide apartment sales in March, this was the only category to record a year-over-year gain. Much of the gain was due to improving sales in the South, South, East, and Northwest districts. New listings this month did ease, helping support a small decline in inventory levels. Persistent oversupply has resulted in continued downward pressure on prices. In March, the citywide benchmark price eased by more than 2% compared to last year for a total of $243,700. Attached Both semi-detached and row sales declined this month compared to last year. Like the other property types, there was also a significant reduction in new listings. The decline in new listings helped push down inventory levels for both property types, but it was not enough to prevent a rise in the months of supply. However, this segment was oversupplied before the recent changes, impacting prices. As of March, prices remained nearly 1% lower than last year’s levels for both semi-detached and row properties. REGIONAL MARKET FACTS Airdrie Like many other areas, Airdrie saw a decline in sales activity, along with a reduction in new listings and inventory. The reductions in supply and demand helped prevent any significant changes to the months of supply. While the full impact of the COVID-19 crisis has not yet played out in the housing market, March prices remained comparable to last year’s levels. Cochrane Both sales and new listings fell this month compared to last year, causing inventories to fall to the lowest levels in five years. Like many other markets, Cochrane remains oversupplied, with easing prices. The March benchmark price was $398,700. This is nearly 2% lower than the previous year. Okotoks Trends changed this month, with flat sales and a decline in new listings. The decline in new listings was enough to cause a significant reduction in supply levels and the months of supply fell below five months. Prices are trending down monthly, but remain comparable to last year’s levels, with a March benchmark price of $405,000. REAL ESTATE The government of Alberta has deemed real estate agent services, and services that provide access to credit, stocks or other forms of liquidity or finance to individuals, groups or businesses to be essential. This exempts licensed real estate and mortgage professionals from restrictions during the COVID-19 outbreak, as long as they follow all public health guidelines, including physical distancing measures. This means brokerages will not need to shut down operations at this time. Albertans rely on these professional services, and brokerages are encouraged to remain open. If you have any questions, give me a call at [phone]. I’m here to help.