Here come the Dog Days of Summer and the Calgary Real Estate market is still acting odd, kind of like a big black dog in the hot sun, not doing much of anything except trying to stay cool.

Basically, the year started off well with prices holding and moving up somewhat. Then by May (usually the best month of the year for number of homes sold) things started cooling off … a lot. We are all left wondering, why the major shift in buyer attitude? It has not necessarily become a buyer’s market, but more a market devoid of any buyers. Collective thinking has many wondering if buyers are confused or just plain put off by the banks’ and government’s new mortgage rules and the tightening of lending practices.

In reality, very little has changed in the way banks are lending to home purchasers. All a new or past-qualified home buyer needs for a deposit to purchase a home is 5% of the purchase price. That hasn’t changed for the better part of 10 years. The news is even better for anyone looking for a second or vacation home, as you only need 10% down, as opposed to up to 50% down some 10 years ago.

So what gives? It’s simply that many folks are sidelined and holding back to see if prices will soften much more. I personally don’t think we’ll see much better pricing vs. selection than we have right now. Many potential buyers are simply taking a wait-and-see attitude. Meanwhile most folks trying to sell their homes are becoming frustrated and somewhat disillusioned. And who can blame them? As of right now only about 30% of homes are selling. Will that figure go up? Yes, once inventories come down about 20%, and when buyers begin to realize homes prices have settled.

Thus it is important for sellers to make every showing count, as the 30% of homes that are selling are usually those in the best condition at the best price. It is a highly competitive market right now, and if sellers are in a position where they need to sell, they will need to be aggressive. So until the market picks up (my best guess is somewhere around late September or early October) we are in for a long summer lull, as the Dog Days of Real Estate are upon us.

 If you have read the Calgary Herald, or any number of articles on the current Real Estate market in Calgary, you probably already know that the resale and new home market is slow for homes under $600k. So, why are the bigger homes selling and the more affordable homes sitting around on the market?

It seems that some people have discovered the hidden truth in a slower market. If the market has adjusted downward somewhat the time to buy is on the pull back. Slower markets never last for long, just as fast markets always peak.

For those who do not hesitate to act when the market slows, they will get the best home at the best price. The “low hanging fruit”, so to speak, the best homes at the best price will always be the first to go, and they sell fast. Only about 20% of the homes on the market currently represent outstanding value. That is, they have come off peak prices in March of this year and are adjusted to sell in the slower market, and are in great condition with a good location.

If you are a buyer and you are waiting to see what will happen – read: waiting for further price adjustments down - I can almost guarantee that you will wait too long, and the really goods homes will sell under your feet. Nobody likes to be in the position of finding that right home and than losing it because they hesitated to act.

Conversely, when looking to sell your home in this market you need to ensure it is the “low hanging fruit”, the best home at the best possible price. The market, not the Realtor, dictates prices. Nobody can change it, so it is always best to adapt. We have some clients that are even more aggressive than we are in terms of pricing their homes to sell in such a market!

So as we all get used to the Real Estate market returning to normal, this may be the best time to purchase and/or move up for a while to come.

 I have to admit that the market this year has been puzzling, a bit like the weather. The year started off well, with listings selling relatively quickly, but pricing staying within the established ranges set late in 2009. The market has returned to a more normal rhythm in terms of listing vs. sales.

We are definitely back into a market where homes are selling but buyers are taking their time. One thing that did not materialize, which many in the industry, including myself, expected, was a rush to secure the purchase of a new home due to the increase in interest rates. I fully expected a bump in the number of resale homes in May, and that simply did not occur.

Almost the opposite happened, with a large number of new listings coming onto the market and resale homes sales slowing.  It is normal this time of year to see a large number of listings on the market relative to sales. Normally, this time of year the velocity of sales increases as new listings come on. This is due to folks waiting for the right house to come along, then they’ll pounce on it.

I do expect the market to pick up in terms of overall sales activity. Currently there is a three to four month supply of homes available, and that will no doubt increase as we head into summer. Some are starting to say it’s a buyer’s market, but it’s not. It is simply a normal real estate market with supply and demand factors keeping pricing in check. Folks in Calgary have not experienced a normal Real Estate market since 2004 and its going to take some getting used to for all of us.

From this point until mid August the market will remain somewhat buoyant, but only about 60% of the current listings will sell. This is a simple fact of the normal supply and demand equation that all sellers and buyers face in the reality of today’s competitive market place. Not all houses are created equal and when the market levels out like it is now, buyers will only move on the homes that represent the best overall value, that being:  location of home, condition of the property, size of home, layout, style of property, upgrades, and, of course, the big one - price.

So it’s back to normal for residential Real Estate, and its going to be a great time to find a new home for the rest of this year.

Team Hayden was proud to sponsor the Calgary BowView Ringette provincial tournament, by providing a selection of auction prizes, a cash donation, and jewelry gift bags for the winning team of coaches!