Calgary posted the second-highest year-over-year percentage decline in residential MLS sales in the country in 2008 and led the country with the biggest annual drop in the average sale price, according to statistics released Thursday by the Canadian Real Estate Association.

The national organization said total sales in Calgary last year dropped by 28.1 per cent, just behind the 35.5 per cent plunge in the Greater Vancouver real estate market.

The average MLS sale price in Calgary fell by 2.1 per cent to lead the nation, tied with Windsor-Essex.

According to the association, there were 23,136 residential MLS sales in Calgary in 2008 for an average price of $405,267. New listings in the city increased by 3.7 per cent to 56,187.

Total dollar volume for all transactions during 2008 plunged by 29.6 per cent from the previous year to $9.4 billion. “Canada’s housing boom fizzled in 2008 as t he credit squeeze and economic downturn choked off demand,” said economist Robert Kavcic, of BMO Capital Markets, in a research note.

“ With j ob losses accelerating late last year, sales activity will likely remain under pressure, while the imbalance of listings relative to sales should keep prices in correction mode. All told, 2009 is shaping up to be another difficult year in the Canadian real estate market.”
He said sales activity nationally slid to the lowest level since 2002 as the credit squeeze took its toll on Canadian home buyers.

“Long gone are the days of bidding wars and above-list closing prices in most Canadian real estate markets,” said Kavcic.

At the national level, 434,477 homes traded hands via the MLS systems of real estate boards in Canada in 2008, down 17.1 per cent from the record 523,855 properties sold in 2007. The national MLS residential average price edged lower by seven-tenths of one per cent in 2008 to $303,594. The real estate association said the average price posted year-over year gains in the first six months of the year before declining throughout the second half of 2008.

New MLS residential listings rose 7.7 per cent to 919,863 units in 2008 — a record.

Calgary had only 777 sales in December, a 46.6 per cent plunge from a year ago, while the average sale price was down 9.4 per cent from December 2007 to $362,557.

“Average prices will remain under downward pressure during the Canadian economic recession,” said association chief economist Gregory Klump. “Shaky financial market confidence is pulling down business and consumer confidence. The consensus economic forecast predicts the economy will rebound in the second half of 2009, so housing market trends should strengthen next year.

“There has been a fundamental shift in consumer confidence with job insecurities in every region of Canada. That is unlikely to change until the worst of the recession is behind us.