March's resale housing numbers are out for Calgary and Edmonton and they show that the markets are slower, but prices are stable. This as the energy sector contracts, the public sector braces itself for cutbacks, and the only thing certain in Alberta is that no one is sure when oil prices are going recover.

In Calgary, activity was down by 30 per cent in March, compared to March 2014.  There are nearly twice as many homes on the market as there were a year ago. The average sale price was off just two per cent to $475,000.

In Edmonton,the picture was brighter. Activity slowed by around 13 per cent, but the average sale price actually moved higher by 2.75 per cent to $373,000.

Edmonton realtors credit that stability to the fact that Edmonton's market didn't overheat in the past few years.

"That is why our prices are not taking the same hit even though our inventory is way up and sales are slightly down," said Geneva Tetreault, of the Edmonton Real Estate Board, in a release. 

Loss aversion

There's another factor at play in the housing market. Supply and demand — the economic force that has recently crushed the price of of oil  — plays a different role in housing, where it really hurts sellers to drop their asking price. In economics, the term is loss aversion. In real life, the term is also loss aversion.

'If you don't have to sell, ride it out' - Len Wong, realtor, Remax

Regina-born economist David Genesove studied the condo market in Boston, while an economics professor at MIT. He was interested in the not-always-rational behaviour of sellers in the housing market.

When the market is booming, homes can sell for way over asking, but in a bust, activity can drop by 50 per cent and sellers are still asking 30 per cent more than the market will bear. They'll take a home off the market instead of selling at the lower price.

That's particularly evident if you're going to lose money on the sale, said Genesove in an interview from the Hebrew University of Jerusalem, where he teaches economics.

"Homeowners who put all their savings into the down payment will now find that if should they sell their home and then buy a new one, they will have insufficient funds for the down payment on the new home."

Calgary home prices over the past decade

The average price of a home in Calgary is up nearly 80% since 2005. Data from Calgary Real Estate Board. (CBC/CREB)

High-end market being hit

That might explain why we are seeing more price movement in the luxury market. Len Wong, a Calgary realtor, says prices are definitely dropping in the high end, but not so much in the middle of the market.

"Between $400,000 and $600,000, it's still steady, but not on fire. Let's say you're a teacher, fireman, policeman, that type of job, not affected by the oilpatch,  the job security is there in that market. But the higher end market has definitely been suffering."

Wong says there's a big inventory of homes for sale for three reasons: Some people who have been laid off in the oilpatch have put their homes up for sale, others who are worried about being laid off are considering selling, so that they aren't stuck with an expensive home if the worst does happen. Then there's third group who were planning to sell in the spring and tried to get to market early.

The 2008 example

Back in the last downturn in 2008, prices did eventually drop as much as 30 per cent, depending on price point, Wong says. Market stats show that a roughly 18 per cent drop in the average home price between July of 2007 and January 2009, an 18-month window. The Calgary market saw four years of prices barely moving before taking off again in 2013.

There are many negative forecasts suggested for Alberta's housing market and for the Canadian market as a whole. Even the Bank of Canada has suggested that home prices are as much as 30 per cent overvalued.

Genesove's research into sellers' behaviours shows why that might be true, but sellers are still reluctant to budge off their asking prices — as long as they can still make the payments.

Delinquency rate very low in Alberta

Right now the mortgage delinquency rate in Alberta is half the already-low Canadian average, showing that people are still making those payments. Employment numbers from Statistics Canada last month showed that both Calgary and Edmonton added jobs, although that is probably a quirk of the labour market that will even out in the coming months.

That doesn't mean this is a good time to sell your house in Alberta. Wong says don't sell unless you have to.

'If you don't have to sell, ride it out. If you do have to sell, you're going to have to be competitive."