Many people thought that the Real Estate market in Calgary would rebound nicely in 2018,but we’re not there yet and we still have some obstacles to overcome.
Stricter lending criteria, higher rates and a slow economic recovery weighed on housing demand over the first half of 2018. This is causing sales to ease more than originally anticipated.
Overall, prices are expected to ease by over one per cent across the city, with expected declines ranging from 2.5 per cent in the apartment sector to nearly one per cent in the detached sector.
“Prices were not expected to improve this year. However, supply has not adjusted fast enough to weaker than expected demand. This is causing us to make a downward revision from earlier estimates” said CREB® chief economist Ann-Marie Lurie.
Economic recovery is expected to gain further traction in the latter half of 2018. This is expected to help limit the pullback in demand, but it is unlikely it will be enough to offset declines that occurred in the first portion of the year.
Why is the housing market struggling to recover?
- Higher lending rates and stricter qualifications are preventing some first-time buyers from transitioning to the ownership market. This is also impacting the ability of some existing homeowners to consider moving up to a higher price point.
- While the economy is improving, this remains a story of recovery, as the economy has not yet reached the levels of pre-recession activity.
- The type of job growth has shifted, as employment gains have not occurred in our traditional sectors.
- Consumer confidence continues to be impacted by concerns about Alberta’s prospects and how much more this could impact housing prices, particularly now with elevated inventories.
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