The calls started coming into Thomas Keeper's Calgary real estate office a week before Christmas. Oil executives, watching their company stocks plummet in the wake of plunging crude prices, were looking to sell their multimillion-dollar homes ahead of the new year, hoping to cash in before the panic reached the city's housing market.

"It was one of the busiest Decembers that I've ever had just because people were selling their homes right before the market was really starting to crash," says Mr. Keeper of Tink International Real Estate, who specializes in Calgary's luxury home market. "I've never had that happen. Who lists their home before Christmas?"

Calgary's housing market took a sharp downturn last month, with sales plummeting 35 per cent compared with the same time last year, while new listings surged 40 per cent. The number of homes on the market across the city jumped from 3,100 to 4,400 in the span of three weeks, Mr. Keeper says. Average prices, however, have stayed largely flat compared to December and realtors say it will likely take several months of rising listings and sinking sales before sellers acknowledge their homes aren't worth what they were just a few months ago.

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It's a different story for the city's luxury market, which is already in the midst of meltdown, with some sellers slashing their prices by hundreds of thousands of dollars in a desperate bid to appeal to nervous buyers. Sales of homes above $1-million fell 43 per cent in January compared with a year earlier, the Calgary Real Estate Board said. There were no sales above $1.75-million last month, compared to 10 sales last January, even though there were nearly 300 homes for sales in the price range.

It's a dramatic reversal of fortunes for the city's luxury housing market, which broke new records for prices and sales last year. More than 850 homes sold for above $1-million last year, up 16 per cent from a year earlier, according to Sotheby's International Realty Canada. Much of that growth came toward the end of the year, with sales soaring even as oil prices began their downward slide. But luxury buyers rang in the new year with a sense of panic as major oil producers began slashing jobs and scaling back spending on new projects.

Nearly half of the luxury properties in Calgary's most prestigious neighbourhood, Mount Royal, have dropped their prices by $100,000 or more, with many homes that were selling well above $1-million now languishing on the market in the six figures. The average detached house in the neighbourhood sold for more than $2.6-million last year, but the neighbourhood hasn't seen any sales since before oil prices began plummeting in November.

"If somebody had told me you could buy a home in Mount Royal for $900,000 a year ago I would've said they were lying," Mr. Keeper said.

After pouring thousands into granite countertops, hardwood floors and new appliances, Sandra MacKenzie listed her 102-year-old house on a corner lot in Mount Royal for $1.4-million in November, just as oil prices were collapsing. Similar houses in the neighbourhood were selling for $1.5-million in the summer, but after weeks with little interest from buyers, Ms. MacKenzie recently slashed the price to $900,000. An open house last weekend brought 30 people, but no takers.

"I just can't go any lower than that, but everybody is so scared to buy now because of the oil prices," said Ms. MacKenzie, whose parents had taken out a reverse mortgage on the property, leaving her little equity amid falling prices. "I would even sell to a builder at this point. I hate saying that because it's a beautiful home, but I'm getting desperate."

Nearly a third of all new listings above $1-million in the city are for brand new, builder-owned attached houses on infill lots, said Colin Kehler of Re/Max. Several are from small developers who had torn down older single-family homes to build high-end attached houses that appeal to younger buyers wanting to live closer to downtown. Many are now sitting empty in a cooling market.

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"You'd have to think they can't carry them for too long," Mr. Kehler said. "I think there's going to be some motivated sellers."

Even as sellers such as Ms. MacKenzie have dramatically slashed their prices, many others refuse to come down on the asking price, leading to a stockpile of luxury homes for sale. Mr. Keeper predicts prices on high-end homes could eventually come down another 10 per cent because of a build-up of unsold inventory before skittish buyers decide to get back into the market.

"If oil does continue to stay where it is, I would say by the spring you're going to see a lot of buyers out there trying to take advantage of the fear in the market," said Sotheby's Canadian president and chief executive officer Ross McCredie.

Months ago, Calgary real estate agents could stick a luxury house on the Multiple Listings Service and sit back and watch it sell. These days, they're having to work much harder just to get prospective buyers in the door. Mr. Keeper has reached out to contacts in the U.S. hoping American buyers will be enticed by falling house prices and a sinking loonie. "You have open house after open house," he says. "If a buyer calls you at 10 in the morning or when you're sitting down for dinner, then you drop what you're doing and you go," he says. "And if a buyer wants the couch with the house, they get the couch."