Monday, June 22, 2020 / by Sergey Korostensky
Like virtually every other sector of the economy, real estate has been hard hit by the economic double-whammy that the COVID pandemic and record low oil prices have meant for Alberta.
That's also true for the City of Airdrie according to the Chief Economist with the Calgary Real Estate Board (CREB). Ann-Marie Lurie says home sales took a dramatic tumble in April and May, but she says, while prices fell as well, they didn't fall to the same extent as sales did.
"In April alone that decline was about 40 percent, so there was only 60 sales which is far lower than what we usually have in Airdrie. May actually improved a bit and that decline actually went from a year over year decline of 40 percent to a 32 percent decline in May with 99 sales."
Lurie explains that while home sales were falling to near record lows in the city, the average home price wasn't down as much as you might expect. "So for a single-family or a detached home, the average price would be $412,000 and that was in May. That's down four percent (from last May).
Lurie says rather than focus on the average price in Airdrie, she prefers to focus on a benchmark price which reflects the same type of home year over year. "Those prices have actually held up rather well," she explains. "So we've only seen those prices be down less than half a percent over last year so that benchmark price is sitting at $331,000."
Lurie goes on to say that there has been a difference in other measures, such as average and median prices which have both dropped more. She isn't surprised by that since sales activity has shifted to more affordable homes. "So that would cause prices to come down at more of a higher rate because of the distribution of sales."
She says sales of properties priced at under $300,000 are actually up this year from last while sales of homes priced higher than $600,000 have declined significantly.
If anyone feels that now might be a good time to purchase a home because of lower prices, Lurie says while sales and prices fell, so did listings.
"I just think that, for anyone that's transacting, it's really important to understand how much supply there is in the market relative to the demand at the price point they're looking at 'cause that will influence how much price adjustment there is in the market."
Lurie isn't looking for a short term turnaround but she is expecting some improvement from the near-record low sales from April. She says there is still some risk in the market. "We don't think things will stay as they currently are, so we'll see sales activity start to slowly improve but we do think it's going to be a weaker year. There still remains a lot of economic uncertainty about what will happen once conditions turn to a new normal. We have to keep in mind that our market was struggling ahead of this."