Calgary Leads Nation In Sales Decline

In an article on reportonbusiness.com, it appears that Calgary leads the nation in new listings (along with Western Canada) and also sales declines.

“By contrast new listings soared to their highest recorded level at 154,217 units in the first quarter, led by Calgary, Edmonton and Vancouver.”

…

“On a year-over-year basis, sales volumes fell in 16 of the 18 major markets for which data was available, led by a 35.9 per cent drop in Calgary and a 29.8 per cent decline in Edmonton.”

Most bullish specuvestors and the real estate “value” chain will pump many reasons for buying. Alberta’s infallible natural resources based economy is the most commonly used ”empty” validation for entering into a lifetime of debt. If Alberta’s economy is hyped to be the most vibrant and strong, then why are sales volumes the worst in Canada?

When will people understand the key principle in a marketplace is affordabibilty. It’s no longer about the economy when house prices have risen past the sustainable threshold. The “invisible hand” of the market is slowly proving this fact.

If you still believe in a balanced marketplace, you’re dreaming in technicolor.

A potential scary/sobering reality is that Calgary may become the epicenter for the real estate crash in Canada.

Updated News Articles:
Canada’s Housing Boom “Officially Over”
Just Bought A House? Don’t Read This
Alberta House Price Boom Dying Down
Calgary Home Sales Plummet
Housing Demand Declines In Calgary
Stretched buyers fuel boom in housing
Engine behind the country’s housing boom has been increasingly leveraged first-time buyers
Alberta mortgage debt reaches $60B
Housing woes hitting home

 

  

Color Red For Condo Sales

There is another condominium project starving for potential buyers.

It’s the Colors project by Battistella located on the corner of 1st Street SW and 13th Avenue SW (right beside Chocolate Condos in the Beltline district). Once again, the location is good considering the project is in the inner city. The project is probably months away from completion and appears to be desperate for buyers. The following is a promotion that Battistella is running to spur sales. Needless to say, the promotion is “meaty.” Are these promotions honest elements of a “balanced” marketplace?

 

 

Even when promotions and marketing are rampant for these developments, buyers are retreating at a more staggering pace. Most sellers were anticipating increased sales numbers during the “spring rush.” But with sales volumes so low, what will be the financial outcome?

Condo April 1 – 15 2008: 294, 588 (projected) 30% decrease
Condo April 2007: 839
Condo April 2006: 922

With many more new condo developments hitting the market soon, there is severe trouble ahead. Inventory levels will be astronomical while sales continue to dwindle. Soon many condo developers will have to cannibalize their competition with heavier promotions and price reductions to attract buyers. The cannibalization will extend to the already heavily saturated inventory of resale condos. It will be a fierce race to the bottom.

If you’re a potential condo buyer out there in the Calgary market; the best thing to do is to wait.