Calgary’s housing market slowed way down in January.

Just 879 homes sold last month, a drop of nearly 40 per cent from January 2014, according to a report by the Calgary Real Estate Board. It was the slowest January in more than seven years, which is not a surprise given the huge drop in oil prices since June.

But sale prices remained stable, with the median home price actually increasing from December 2014 and the average home price dropping just a half per cent year over year to just under $461,000.

Here's the strangest number in the report: new listings jumped by 37 per cent, which begs the question, what are people thinking? That NOW is the time to sell?

Fear of missing out

"It's the fear of missing out," says Don Campbell, a real estate analyst and co-founder of the Real Estate Investment Network.

Campbell says this is the fourth major collapse in oil prices that he's witnessed. 

"Most Albertans get that it [the market] comes back eventually, but what we've noticed is that a lot of people have migrated in the last two years and they haven't been through the inevitable ups and downs of an oil industry town."

That's part of the equation, but the other part is real estate investors.

'People start to get antsy and then think, I'd better get out.' - Don Campbell, Real Estate Investment Network

If you further break down the resale numbers from the Calgary Real Estate Board, they show a 50 per cent increase in new condo listings, and a 30 per cent increase in detached homes.

No numbers exist on how much of Calgary's housing market is owned by investors, rather than people who live in their own homes. The condo market is traditionally more attractive to investors, especially with rental vacancy rates in the city so low. Investors are also more likely to want to capitalize on their gains when a market is about to change.

Prices on way down?

So with that kind of pressure on the market – why are home prices stable? There's the general stickiness of housing prices on the way down. It takes time before sellers are willing to accept that their homes might be worth less than expected.

Meanwhile, buyers stay on the sidelines.

"Put yourself in the shoes of a buyer," says David Dale-Johnson, head of the real estate program at the University of Alberta's business school. "If you're thinking of taking advantage of this shock, you're being patient. So, you've got sellers that don't want to adjust and buyers that don't want to move."

Here's some context from the last oil price collapse. The most recent downturn in Calgary was in 2008. In 2007, the average home price in Calgary was $423,770, at the end of 2008, that price had only dropped by roughly $10,000. In 2009, the average home price dropped to $394,058, a seven per cent drop in two years.  

Calgary home prices over the past decade

The average price of a home in Calgary is up nearly 80 per cent since 2005, information provided by the Calgary Real Estate Board shows. (CBC/CREB)

Campbell thinks that prices will be relatively stable for another few months.

"We're at the six-month mark of the oil drop, that's when we see the listings go up," he says, adding that in another three months, sellers will be getting nervous, and will realize that if they want to sell, they'll need to lower their price.

Job cuts

In the meantime, we wait to see how the job market fares. There have been a number of high profile layoff announcements – Shell, Suncor, Schlumberger, Baker Hughes – but we don't know how many jobs were lost in Calgary.

This week, the human resources consulting firm Mercer said that 16 per cent of North American energy companies were considering cutting staff to manage the decline in oil prices. The reason that number isn't higher is because the energy sector is waiting to see what happens to oil prices. It's very expensive to rehire staff, so there is a natural reluctance to to make the cuts. However, the longer the price of crude stays low, the harder that gets. 

"If oil stays down through December [2015], you'll see the median house price drop," says Campbell. "You'll see a lot of days on market, interest rates staying low, people spending less in retail stores, affecting the GDP, but if oil comes around in the next three months, you'll see a lot of people say 'Hoo, thank goodness that's over.'"