Aside from the global financial crisis of 2008, December month-to-date sales in Calgary are at the lowest level since 1995.
A total of 493 homes sold in the first two weeks of the month, a -22.7% year-over-year drop and below the 5 & 10 year average by -15.6% & -17.1%.
The average and median price are off by -1.9% and -1.8% respectively.
It was exactly a year ago that new listings spiked as the economic fallout of plunging oil prices rippled through Calgary’s real estate market.
Even so, new listings are up further this month by 5.25%. Inventory now sits at a bloated 5,189 – a 33.2% annual increase or 1,294 more active listings than last year.
How much of an impact the new downpayment rules being introduced in February 2016 will have on the beleaguered $500k-$1M Calgary market is debatable, but it certainly won’t help. It’s like covering someone’s mouth that’s already in a choke hold.
A sure sign of a difficult market is when incentives and bonuses start popping up. Builders loathe to cut asking prices because it would set a precedent for future sales. Instead you’ll see them give design credits for upgrades.
Some sellers attempt to steer more traffic to their home by offering a significant buyer agent bonus of $1000, $5000, $10000, or even $25000. A quick count shows over 200 listings with bonuses now.
Other sellers appeal directly to the buyer. A few years ago, a couple of Calgary sellers promoted $1000 worth of beer as an incentive to buyers.
We’re likely to see many more creative sellers in the months to come – but there is a downside to consider. This Wall Street Journal article from 2007 sheds more light on how hidden incentives can distort sale prices.
As a buyer, do incentives have appeal or would you rather wait for a literal price reduction?