The average residential MLS sale price in Alberta is forecast to fall by 8.8 per cent this year and another 1.1 per cent in 2010, according to a report released Thursday by the Canadian Real Estate Association.

The association said the average price in the province will dip to $321,900 in 2009 from the $352,857 it recorded in 2008. The average price is also forecast to fall to $318,300 next year.

The CREA, in its forecast, said total MLS residential sales will decline by 24.7 per cent this year to 42,450 units, compared with 56,399 sales in 2008. But the association said sales will rebound by 13.3 per cent in 2010 to 48,100.

Nationally, the association of realtors is forecasting t he ave ra ge sale price to dip by 5.2 per cent this year to $ 2 87, 700 f rom $303,594 in 2008, but it sees the average price increasing by 1.7 per cent in 2010 to $292,600.

As for sales across t h e co u n t r y, the CREA is forecasting a 14.7 per cent drop this year to 370,500 units compared with 434,477 in 2008 and it is predicting a 7.2 per cent jump in 2010 to 397,000 sales.
“Monthly resale housing activity improved as the first quarter progressed, entering the second quarter on a rising trend and closing in on levels last seen before it fell sharply late last year,” said Gregory Klump, CREA chief economist.

“It will take time for housing inventories to be drawn down enough to put new home construction on a stronger footing, but the balance between resale housing supply and demand is improving in a number of major markets. The national average price has begun to rebound from the recent low reached in January and is forecast to begin rising modestly above year-ago levels in the fourth quarter of 2009.”

Canada Mortgage and Housing Corp. is releasing its latest housing market forecast Tuesday, said Richard Corriveau, regional economist for the CMHC in Calgary, adding the agency’s forecast is similar to the CREA’s.

“We’re not as bearish in terms of sales this year. We do believe we’ll have a stronger second half of the year, which should result in some improvement over their numbers. Nonetheless, they’ll be very similar. I think there’s a consensus we’ll be in the low to mid 40,000 for sales this year,” he said.

“Next year, we’re looking at a similar increase, but not as bullish. We expect that the employment losses that we’re currently experiencing, they’ll continue as the year progresses and as a result that will inhibit the rebound into 2010. Nonetheless, we still believe this year will represent the bottom with an improvement next year.”

As for average sale prices, Corriveau said the CMHC is forecasting a similar scenario this year as painted by the CREA. But heading into 2010, there is room for “modest” price growth.