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Market Update to June 15 – Red Deer Real Estate Stats

Thu, 22 Jun by tonysankovic

Red Deer Market Update – The central Alberta real estate market has been following similar trends for many years – slower in the winter, strong in the spring, a little slower in the summer and busy again in the fall. There are some reasons for those trends. The spring market probably has been the strongest because that’s when oil workers came home at break-up and had some extra time to look at houses and make a move before going back to work.

December and January are slow for obvious reasons – most people don’t have time to move during the Christmas season and many don’t like to move in the winter.

The last half of June and the summer months are also times when many people have other things on their minds – the end of the school year, summer holidays etc.

September, October and November can be quite busy, although rarely as busy as the spring market.

This year, the spring market has not reached levels seen when oil prices were high and the economy was booming. We have now experienced two and a half years of low oil prices and a slower economy and it shows in the real estate market. Sales are lower and the number of active listings is higher, which leads to softer prices.

There is evidence that the economy is turning. Alberta is projected to lead all Canadian provinces in growth this year with GDP predicted to increase by 3%.

So, when can we expect to see a stronger real estate market? Obviously, it depends on oil prices to a large degree, but the real estate market in the last few downturns has always taken at least a year to recover.

That would mean that we could see a return to more normal sales numbers in the spring of 2018. In the meantime, we expect to see sales and the listing count keep pace with last year and maybe even do a little better.

Again, the good news for those buying and selling in our market – sell low, buy low. If the house you are selling goes up, the one you buy will go up as well. Now is the time to take advantage of the large inventory of homes and the vast choices available as well as very favorable interest rates.

Real estate has always been a great investment. It provides a place to live while growing in value and best of all, the profit at the end is realized TAX FREE! There just isn’t a better place to put your money.

Market Update to May 31 – Red Deer Real Estate Stats

Thu, 08 Jun by tonysankovic

Red Deer Market Update – May sales in Red Deer were up compared to April but were down compared to May of last year. The number of active listings is up substantially from last month and is also higher than last year at this time. In spite of the increasing spread between supply and demand the market managed to stay just inside CMHC’s definition of “balanced”.

Sellers who are wondering why their properties aren’t selling only need to look at the 21% sales to listing ratio. That means only two out of ten properties for sale on MLS sold last month. The price of real estate is dictated by the relationship between Supply and Demand just like the price of oil or lumber. When there are only two buyers for every 10 homes on the market, those buyers will naturally turn to the one that offers the most value for the money.

No amount of slick or aggressive marketing can overcome a price that is obviously too high when the property is compared with others on the market. It is understandable that homeowners expect their property to be worth more than they paid for it, but unfortunately that isn’t always the case. The one thing to remember is that prices in a local market are almost always relative ‐ if you sell low, you will also buy low.

RD STATS May 2017

Today’s market is Balanced.

*For current STATS on additional central Alberta locations, see bottom of website’s Home page.

Market Update to May 15 – Red Deer Real Estate Stats

Mon, 22 May by tonysankovic

Red Deer Market Update – Red Deer sales in the first two weeks in May were up from the same time in April, but down compared to the first two weeks of May 2016. Year to date sales in Red Deer continue to lag behind the same time last year while overall central Alberta sales are up 7.5% year over year.

There have been many reports that the Alberta economy is improving after two years of recession. Several leading economic indicators are referenced in support of that theory. Oil prices have spent most of 2017 hovering over US$50, just recently dropping under that magic mark. Ramped up production in the US and Canada have increased supplies again, driving prices down. Recent news that OPEC has stated they are willing to do whatever it takes to keep prices stable has pushed the price back closer to US$50 in the last few days.

No matter what the politicians tell us, the strength of the Alberta economy is still heavily reliant on energy. There is no doubt that higher prices have increased activity in our energy sector, and more economic activity in any sector helps boost all the other sectors. But to assume that will change the housing market overnight would be a bit of a stretch.

Many people employed by the energy industry are back at work, but at reduced incomes. Energy company profits are still thin, but those still in business have become much more efficient and able to survive in the new lower price reality. It will take some time for their employees to get back on their feet and start thinking about investing money in new homes.

In the meantime, the housing market has survived based on activity by those not as affected by energy prices. Those families have an amazing opportunity to take advantage of more choice, less competition, lower prices and very low interest rates. Those with 20% down payments are in the best position to take advantage.

Buyers with less than 20% down require their mortgages to be insured and the federal government made that much more difficult with rules that require buyers to qualify at a high artificial rate as opposed to the actual rate they can borrow at. The purpose of that program was to slow down heated markets in Toronto and Vancouver. Unfortunately, the policy was applied across Canada and has had a very negative effect on markets already affected by low energy prices.

In a nutshell, the central Alberta real estate market has survived and will continue to do so. Ample supply and low demand in virtually every price range have moved prices off their highs reached in 2014. Smart buyers will take advantage now if they can. It is difficult to go against the flow and easy to think that prices may still go lower, but once those economic indicators start to turn, it is likely real estate prices aren’t too far behind.

Market Update to April 30 – Red Deer Real Estate Stats

Tue, 09 May by tonysankovic

Red Deer Market Update – It feels like the spring market in Red Deer, like the weather, still hasn’t arrived. The percentage drop in year over year sales at 15.3% is not what most people would have expected this year so far, but we aren’t surprised because we know that a recovery in the real estate market always lags behind an economic recovery by a year or so. In spite of the year over year decline in sales, the number of active listings is lower than a year ago which has helped push the sales to listings ratio just into balanced territory.

What does the future hold? As tough as the last two years have been, fortunately, it is looking brighter….

The Alberta Treasury Branch summed up the last two years in Alberta this way ‐ Many Albertans felt it. And the latest numbers confirm it. Alberta’s economy contracted another 3.8 per cent in 2016. This follows a similar decline of 3.7 per cent in 2015. It was the second consecutive year that real gross domestic product (GDP) contracted, the last time this happened was in 1982 and 1983….

The last couple of years have been tough for Albertans and the provincial economy. But it is expected to get better in 2017. ATB is forecasting real GDP growth this year in the two to three per cent range. This represents an end to two consecutive years of recession and welcomes in an era of modest growth.

RD STATS Apr 2017

Today’s market is Balanced.

*For current STATS on additional central Alberta locations, see bottom of website’s Home page.

Market Update to Mar 15 – Red Deer Real Estate Stats

Sun, 19 Mar by tonysankovic

Red Deer Market Update – Mid month sales in March were down a little in Red Deer when compared to last month. We would like to blame that slower market on the weather, but that wouldn’t explain why sales are even or up in our other central Alberta markets compared to this time last month.

The number of active listings is up across all central Alberta, which is normal for this time of year, although recent optimism about the economy may have encouraged a few more sellers to test the water. Year to date sales for all central Alberta are up 8.8% when compared to the same time last year, a sign that the market is finally turning.

Moving into the third year of an exceptionally tough economic slowdown, the market has survived remarkably well. However, buyers still have the advantage, and probably will for much of the year. Anyone that can buy now should give serious consideration to the fact that interest rates are predicted to rise and if the market recovers, prices will as well.

No one can identify the bottom of the market exactly, but there is some evidence we are very close. Anyone looking to take advantage should do so soon.

February Job Numbers Show Signs of Improvement, ATB Financial

Even though the job situation for thousands of Albertans is still difficult, Statistics Canada’s latest employment report shows a slight improvement in February.

Between January and February, Alberta’s labour market gained approximately 1,300 jobs. Despite shedding 18,000 part-time jobs last month, the good news for Alberta’s economy is that this decrease was offset by 19,300 full-time jobs, suggesting a generous increase in the quality of available work.

The size of Alberta’s labour force (i.e., the number of people actively working or looking for work) fell by 14,100 people in February. The decline in the labour force may indicate that those in search of work are starting to feel discouraged. That said, the drop in the size of Alberta’s labour force and the net gain to employment was enough to nudge the provincial unemployment rate down from 8.8 per cent in January to 8.3 per cent in February.

February’s job report has shown early promise and potentially set a theme of modest growth for this year. Still, employers may remain reluctant to start hiring back too many workers which suggests Alberta job seekers could experience a few more difficult months. However, with stability in various sectors and overall business confidence improving, the job market will continue to show positive progress, in moderation.

Market Update to Feb 28 – Red Deer Real Estate Stats

Mon, 06 Mar by tonysankovic

LOCALREAL STATEMARKETRed Deer Market Update – February sales in Red Deer were up slightly from January while the active listing count was also up, keeping the market attractive for buyers. Year to date sales are down 11% when compared to the same time last year, but the good news is that the economy seems to be turning around and hopefully we’ll see things improve moving into the spring market.

The just released ATB Economic Update states that “Alberta’s economy is emerging from the worst downturn it has experienced in three decades. Yet even as green shoots of optimism appear, the path forward remains unclear. The global economy continues down an uneasy road… but, Canada’s economy is picking up momentum, especially around job growth…

After suffering two consecutive years of contraction, Alberta’s economy has turned the corner and can expect modest improvements in 2017. The greatest improvements have come within the all‐important energy sector ‐ higher prices and pipeline approvals (though construction is not assured) have lifted confidence. Other industries such as agriculture and tourism are showing strength, while construction, forestry and housing remain fragile.

ATB is forecasting real GDP growth of 2.2 percent this year and 2.3 per cent on 2018.”

RD STATS Feb 2017

Today’s market favors Buyers.

*For current STATS on additional central Alberta locations, see bottom of website’s Home page.

Market Update to Feb 15 – Red Deer Real Estate Stats

Wed, 22 Feb by tonysankovic

Red Deer Market Update – February was off to a much better start than January in most of the seven central Alberta markets we track. Sales were as good or better than the first two weeks of last month. The number of active listings is up slightly in most of those markets, but not enough to be concerning.

Consumer confidence is certainly better with oil prices staying above $50US and the news that some people are going back to work. We are seeing more oil company vehicles on the road and there’s a sense that the economy is finally starting to turn. That is translating into more sales and listing activity.

The real estate market always lags behind the economy, usually by a year or two. We are at the very beginning of a recovery and we believe it’s too early to see prices moving up. If things continue to improve and the supply of homes doesn’t get too high, prices should hold where they are. The housing market is still being impacted by the mortgage rule changes that make it harder for buyers to qualify, which will temper the market somewhat.

Alberta Sees a Surge in Population – ATB Economics

The topic of immigration has been all over the news. For Alberta, immigration has helped Calgary and Edmonton become the fastest growing cities in the nation. According to 2016 census data released by Statistics Canada, Calgary remains Canada’s fastest-growing city, even amid the current economic conditions. Calgary’s metropolitan area grew 14.6 per cent between 2011 and 2016. That follows 12.6 per cent growth recorded from 2006 to 2011. Additionally, Calgary overtook Ottawa-Gatineau as Canada’s fourth-largest metro area.

Edmonton’s metropolitan area ranks as the second-fastest growing area in the nation. Alberta’s capital city grew 13.9 per cent during this census period, compared with 12.1 per cent during the last census. Trends are starting to suggest Edmonton will outgrow the rest of the province’s cities within the next five years and could become the fifth largest CMA.

At 11.6 per cent, Alberta continued to have the highest growth rate of all the provinces, up from 10.8 per cent in 2011 and nearly seven per cent higher than the national average.

Statistics Canada notes that in the coming years, population growth in Canada is projected to be increasingly linked to migratory increase rather than natural increase, mainly because of low fertility and an aging population. Between 2011 and 2016, about two-thirds of Canada’s population growth was the result of migratory increases (the difference between the number of immigrants and emigrants).

The increase in immigration promises good news for Alberta, especially the construction sector. Even though Alberta’s energy industry isn’t expected to grow like it did between 2010 and 2014, increased immigration should at least keep Alberta’s home builders and construction companies working hard in the coming years.

Market Update to Jan 31 – Red Deer Real Estate Stats

Tue, 07 Feb by tonysankovic

LOCALREAL STATEMARKETRed Deer Market Update – The Red Deer market started the year the same way we started 2016. While sales were slightly lower than last year, the good news is that inventory levels are relatively low keeping the market reasonably close to balance. Better yet, January sales in all of central Alberta were up a promising 12.8% compared to January 2016.

The difference between this January and last is that the price of West Texas crude is $25US higher and because of that, there are more oil rigs working. There’s been a US presidential election, three pipeline announcements, a provincial carbon tax enacted and federal carbon tax announcement, and all kinds of excitement on the Alberta political front.

Of course, no one can predict the future, but it seems the Alberta economy is trending in the right direction. Some of those things that have happened over the past year will create jobs and grow the economy in the future, but not necessarily in the next few months. The thing that may carry the economy until that growth becomes real, is confidence. Confidence is a powerful force ‐ it encourages people to invest, to spend, to hire and grow their businesses. All by itself, it’s an engine of the economy and what we really need to carry us through.

RD STATS Jan 2017

Today’s market favors Buyers.

*For current STATS on additional central Alberta locations, see bottom of website’s Home page.

Market Update to Jan 15 – Red Deer Real Estate Stats

Thu, 26 Jan by tonysankovic

Red Deer Market Update – the housing market in central Alberta is off to a slower start, very similar to what we experienced in 2010, a little less than two years after the September 2008 economic crisis. The general consensus in Alberta economic circles is that we are starting to turn the corner, and things should improve this year, but a little slower than the last recovery.

The housing market generally lags behind an economic recovery by at least a year, so we don’t expect 2017 to be a boom year for sales or prices. We do expect to see a marginal improvement as the economy continues that slower climb back to wellness.

What does this mean for home sellers? It means they will have to be reasonable around their price expectations. Price is determined by the relationship between Supply and Demand. While the Supply of available homes is lower than it’s been for a couple of years, it’s still too high in most central Alberta markets to get them close to balance. The homes that show the best and are priced competitively will sell and the rest won’t.

What does this mean for home buyers? The first thing home buyers need to understand is that prices come down very slowly. While the housing market is slower, the vast majority of home sellers are not forced to sell, and won’t unless they receive a price they deem fair. Offers that are substantially lower than market value won’t fly. The huge advantage home buyers still have, are historically low interest rates and a good supply of homes to choose from. It’s a great time to invest in a home.

What does this mean for both buyers and sellers? We are not in a crisis. Home values have softened some, but Supply and Demand are not so far out of balance that Sellers should expect to give their property away and buyers should expect more moderate prices, but not a fire sale.

For those consumers selling and buying in the Alberta market, it’s important to remember that the whole province is floating in the same real estate pond. To a large degree, the level of that pond rises and falls at the same rate. If you are selling at a price that you perceive to be low, you should also be able to buy at a price that is relatively the same, therefore there is no loss or gain, other than you are now living in a home that suits your needs better.

Owning a home is much more than an economic endeavor. In Alberta, our homes are necessary to keep us warm and out of the elements, but they are also the place where we live and raise our families. The housing market in Alberta will survive and thrive in spite of economic ups and downs.

I’d be happy to assist you through the increasingly complex process of buying or selling your home. Let me know if I can help!

Market Update to Dec 31 – Red Deer Real Estate Stats

Mon, 09 Jan by tonysankovic

LOCALREAL STATEMARKETRed Deer Market Update – Red Deer sales in December were down almost 50% when compared with November, and on par with December of 2015. The number of active listing also came down again to levels we haven’t seen since last January, although not enough to keep the market in balance after being there for the last several months.

Total sales in Red Deer in 2016 were down only 8.3% compared to 2015 after a 17% drop from 2014 to 2015 and were the lowest total since 2010. The overall central Alberta market fared slightly worse than Red Deer in 2016 with sales down 12.6% from 2015.

A struggling energy industry was the biggest contributor to a slower market in 2016, but provincial government initiatives including minimum wage legislation and the new carbon tax also had an effect on business and consumer confidence. When business and consumers are unsure how government policies will affect them, business is reluctant to invest and consumers are unlikely to make large buying decisions. The federal government’s new mortgage rules also contributed by making it more difficult to qualify for a mortgage. All these factors may combine to offset what could have been substantial gains in 2017. Instead, we expect the 2017 housing market to be only slightly better than 2016 assuming oil prices stay above $50US.

rd-stats-dec-2016

Today’s market favors Buyers.

*For current STATS on additional central Alberta locations, see bottom of website’s Home page.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Central Alberta REALTORS® Association. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.