The economy deeply effects the housing market. This may seem obvious; after all, you hear it time and time again. However, it is important to know exactly how and why the economy effects the housing market. This is important because these two things impact the lives of Calgarians and people everywhere deeply; two of our most common basic needs are shelter and financial resources. Let's learn how they interact.
Each month the Calgary Real Estate Board releases the previous month's real estate market statistics. Each report begins with a summary of the major trends that emerged, such as the months of supply and benchmark prices. For those of you who read these, or our summaries of them (which you can find here), you may be familiar with CREB's chief economist Ann-Marie Lurie.
Lurie often includes remarks on how the economy effected the housing market in Calgary, and typically she refers to the energy sector specifically. For example, in February's report, Lurie remarked, "it is not a surprise that slowing activity in the housing market has persisted into February. There has been no substantial change in the economic climate and concerns regarding potential layoffs in the energy sector are weighing on confidence.”
The reason she reflects on the energy sector specifically is because, like it or not, the oil and gas industry is a major driver of our economy here in Calgary, Canada. It causes a trickle down effect; slowly, then seemingly all at once. After the energy sector crashed a number of years ago, the first effected were people directly in that field; then restaurants and retailers started seeing a sales slump as people had to stop purchasing luxury goods, then small businesses, then the housing market. On the other hand, when the energy sector is thriving, all other areas of the economy thrive.
And so when Albertan's are confident in the economy--when the energy sector is strong, providing more job opportunities, resulting in people having more spare cash for things like dinner out, luxury goods, and new homes--the real estate market gets a major boost. Buyers, sellers and investors benefit. This is why watching the economy is so beneficial for those wanting to be informed on the real estate market. They are deeply connected.
For some this may seem obvious, but it is an important reminder. To learn more about the real estate market, we also recommend reading CREB's reports! If you're not sure where to start or are looking for more specific information depending on your situation, call me at 403-630-6363. Let's talk through your options and begin working towards your goals.
Your Real Estate Professional,