It’s a question that has been asked around the city since the dawn of time. Okay, maybe not quite that long – but the topic of real estate prices in Calgary attracts significant attention and conversation. So, exactly how is the market?
In Calgary right now, it’s hard to ignore that the stats are very much in favour of buyers. It is a buyer’s market and has been now for a number of months. The number of listings is more than 10% higher than it was last year at this time – and the number of sales last month (November 2018) were down more than 15% from last November’s numbers; overall, there is about 6 months of inventory available. Quite simply, supply is outpacing demand.
But those are just the stats. The most important question isn't how's the market but rather what do those market conditions mean to buyers and sellers today?
For buyers it means there are some good deals out there. Prices have come down some and there is a lot of inventory to choose from. But it doesn’t mean that buyers, when they see a place they like that is well-priced, should assume they hold all the cards in negotiations with a seller. Even in this buyer’s market, well-priced homes that show well and have been taken care of, are selling. And for a seller who believes their property is well-priced based on recent comparable sales, who isn’t in a hurry to move, they’re going to wait for a buyer who sees the value in their home rather than someone who is simply looking for a fire sale. That seller may not be willing to seemingly give their property away simply because it’s a buyer’s market.
On the other hand, what does the current market mean for sellers? Well, for sellers it means they need to be realistic about their price expectations. Now is not the time to test the market by listing high to see what happens. A new listing that is priced in line with comparable sold properties generates more excitement, more viewings, and will generally net a higher price than an older, stale listing. Prime marketing time for a listing is during its first few weeks on the market. Don’t waste that time by listing high with your fingers crossed hoping a buyer is getting bad advice from their real estate agent.
Remember that while as a seller you set the listing price of your home, the market will dictate its value. Just because you paid $500,000 in 2014, does not mean someone is going to pay that for your home now, even if you’ve made improvements to the property since then. The market value of your home is what a buyer is willing to pay for it, not what you paid for it plus the cost of the upgrades you made.
My advice to both buyers and sellers in this market is to remain reasonable.
Buyers, when you see a place you like that is well-priced and meets your needs – write an offer. At least begin the negotiations with that seller. Don’t wait believing that sellers are going to give their property away simply because of the buyer’s market headlines.
Sellers, be reasonable and remember that market value isn’t what you paid for the property. You need to look at recent comparable sales and active listings that will be competing with yours in the market. Now is not the time to price above market value and hope for the best.