Recently, Ann-Marie Lurie, chief economist at the Calgary Real Estate Board (CREB), noted that Calgary detached home sale prices are expected to drop 3.2% in 2016 on an annualized basis. All Points has spoken with appraisers who believe that in some pockets, housing prices may drop as much as a 0.5% per month.
We are now entering the spring market, and all HR’s and relocation companies should look at those domestic relocations from Calgary and see what can be done to list these homes aggressively. Selling in this spring market is possible, but it takes knowledge of the competition’s list and sale prices and pricing oneself at or below those values.
You want feet through the door:
More and more homes are going on the market all the time. According to the Calgary Herald, 6.7% more homes were on the market in March, 2016 than in March 2015. This means that you have to keep your eye out for more frequent updates to competitive listings and sales and adjust accordingly. The objective is to list the home at a price that gets feet in the door. A good looking, well maintained property is simply not enough to get people in the door; the price has to be right. The great looking property is certainly more saleable than those that are less well maintained, but the buyers need to see the property first and they are not visiting properties that have unrealistic sales prices.
All Points’ recommendation:
Those with Guarantee Home Sale programs should expect very frequent updates on their Calgary properties with an eye to selling them this spring, rather than languish into the fall (remember prices are just going to continue to drop). If the employee is still marketing the home, reasonable pressure should be enlisted to encourage them to price the home more aggressively. If this is not happening consistently, it may be time to change your policy to allow the company to market the property if the employee accepts the guarantee offer.
For those without Guarantee Home Sale programs, things are a little tougher. However, if your employees do have temporary accommodation benefits, which may be extended due to unsold homes, your relocation company can still reasonably encourage lower list prices. In this environment, it would not be unusual to see poorly marketed homes on the market for long periods of time, surpassing the usual one year that benefits remain open.
Relocation companies can also help understand employee resistance to dropping list prices. For instance, if the employee has a high mortgage balance or if they purchased the home in 2014 at higher prices, this might be the reason someone is resistant to reducing a list price.
Our top recommendation is to be highly aware of those Calgary transfers and be more engaged than normal in knowing how those properties are being marketed. Those properties that remain unsold after this spring will become the company’s problem in one way or another.
Please contact All Points for more information if required.