Wow what a great summer
It reminds me of the summers when I was a kid only it seems to be a bit shorter the older you get. As we turn our sites on the Fall Real Estate market what can we expect. Well the sad truth of the matter is that the Calgary Real Estate market has not changed much in the last few years; it’s still stuck in what I have termed a Real Estate Recession but nowhere near what the US is experiencing.
While the energy sector is running flat out again, and has been for over a year, the follow on pick up in residential real estate has not yet occurred. What I find of interest is that the commercial Real Estate market is doing far better in terms of leasing and office occupancy rates. In fact Calgary office space is getting close to the high water mark set in 2006 and 2007, even with over a million sq. ft. of new space available.
So one would think that sooner or later the residential market will pick up. Yes it will but I am not at all convinced that prices are going to go up. What we will see is a gradual return to a higher overall number of homes sold but prices will most likely remain stable over a very long period of time. Even if oil were to go to $200 a barrel it is not going to drive more projects and more people here than already are coming, all that higher oil prices would do is ensure that those in the oil industry have very long term job security and projects ramp up faster.
What I do expect is that we are on the long haul back to a traditional residential real estate market, where prices are stable and people buy houses to live in, not as some speculative venture in flipping homes to make a fast buck. As a matter of fact I believe the primary reason we are still in a housing recession is that speculation caused a topping effect of home prices in 2006/07, and these overpriced homes have to work their way through the system, this while builders are putting up new homes at much lower prices than in 2006 or 2007.
So I expect a very similar Fall Real Estate Market to what we saw last year with no real increase in the overall number of homes sold, and no price increases until perhaps the Spring market, and even then it’s only going to be a small bump of 2 or 3 percentage points. Just keep in mind it’s a great time to build new or look a moving up.