Alberta's spring housing market falling to COVID-19, energy crisis, statistics show
'This is an unprecedented time with a significant amount of uncertainty'
Physical distancing is meant to flatten the curve of the spread of COVID-19 among Albertans.
But it's also flattening the real estate industry in a province already reeling from a dramatic drop in energy prices, the Alberta Real Estate Association says.
After a promising start to March, real estate sales in the second half of the month dropped in Alberta by nine per cent over March 2019, while new listings declined by 15 per cent, the organization said in a Monday news release.
"This is an unprecedented time with a significant amount of uncertainty," Ann-Marie Lurie, AREA's chief economist, said in the release. "It is not a surprise to see these concerns also weigh on the housing market."
Lurie added the impact "will likely persist over the next several quarters."
Which city is hurting more?
Calgary's housing market had become sluggish long before the pandemic arrived in Alberta, with sales figures and prices dropping since about 2017.
As a result, the almost 10-per-cent decline in March sales over last year doesn't seem too ominous — but it does mean home sales are now tracking at 24 per cent below the five-year average, according to AREA statistics.
New listings in the Calgary region dropped by almost 19 per cent, which the organization said could help take pressure off the overstocked market, the release said.
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"The Calgary market was already struggling with oversupply and price declines prior to the recent changes caused by the pandemic and oil price crash.
"The reductions in both demand and supply will help prevent steeper price declines."
In contrast, sales in Edmonton barely changed over last March, dropping by less than two per cent to 1,304. But that statistic is a reflection the very depressed housing market Edmonton experienced a year ago, the release said.
"The beginning of last year was the hardest year of real estate I've ever seen in my career," Tom Shearer, a Royal LePage broker and owner in Edmonton, told CBC in March. "[March] is a really low yardstick to compare ourselves to."
AREA cancelled all open houses on March 26, about two weeks after the World Health Organization declared the pandemic.
Between self-isolation measures and the highly contagious virus, both sellers and buyers are becoming increasingly wary of showing a home.
Many real estate agents have allowed clients to drop their listings, while homes still on the market are increasingly being shown using digital technology like Facebook Live.
The hardest hit region was Fort McMurray, where sales in March dropped by almost 30 per cent over March 2019, the lowest level since 2016, when a massive wildfire tore through the community. Currently, sales are tracking at 21 per cent lower than the five-year average.
Also taking a significant hit was Grande Prairie. The oil-and-gas community in northwestern Alberta saw its sales drop by 19 per cent over last year.
Central Alberta was the only region to record relatively stable sales in March compared to last year. Like Edmonton, however, March 2019 was one of the weakest in 15 years, the release said.