Fri, 23 Feb
Sales in the first two weeks in February were up over the same period in January in most central Alberta markets. Sales were down slightly or about the same as the first two weeks of February 2017 in most markets.
The number of active listings is up in every market compared to last month which is normal for this time of year. Some of the listing activity is old listings that didn’t sell last year coming back on in time for spring.
It does seem busier although that hasn’t translated to hard sales yet. A resolution to the conflict between Alberta and B.C. over the pipeline would go a long way to improving consumer confidence and market activity.
Thu, 08 Feb
January sales in Red Deer brought some sunshine into the market, something we don’t usually expect to see until March or April, although the number of active listings remains stubbornly high for this time of year, keeping the demand/supply ratio in buyer’s territory. Some January sales may be the residual of last year’s activity to get ahead of the new mortgage rules, so we’ll have to wait and see what February brings before we declare the market back to normal.
Where is the housing market going in 2018? The provincial government has announced an end to the 3 year recession – very good news, but there are still some challenges lurking, including another potential delay to the Kinder Morgan Pipeline by the BC government. While it’s nice to see West Texas oil trading in the $65US range, Alberta producers are only getting about half that much right now because we have only one customer to sell our oil to – the US. With the likelihood of more delays to that pipeline, capital and equipment are moving south to a friendlier U.S. environment and some of those jobs we had back may disappear.
The Alberta economy runs on energy and will continue to do so for the foreseeable future. The energy industry needs access to new markets to generate investment and the jobs that come with it. Jobs create population growth and wealth. Population growth and wealth creates housing market activity. A quick resolution to the pipeline delay will help get our housing market back on track.
Tue, 23 Jan
MARKET UPDATE – JANUARY 15, 2018
Sales were lower in most central Alberta markets in the first two weeks of January compared to December, probably, as a result of extra activity in December caused by the mortgage rule changes. Sales were on par with the first two weeks of January 2017 in most markets, but up significantly in Red Deer. Hopefully that is an indication that the market is indeed turning. The active listing count is still higher than normal which will keep prices stable for now.
Tue, 23 Jan
Sales in Red Deer in December were down compared to November, but up compared to December 2016. The number of active listings is down but still substantially higher than this time a year ago. The supply of homes relative to the demand in 2017 has kept the market firmly in buyer’s territory and some buyers have taken advantage.
The Alberta economy grew at more than 4% in 2017 which means that we made up some of the ground lost in 2015 and 2016. The economy is predicted to grow again in 2018, but a little slower at about 2%. It’s likely those two years of growth will contribute to a more stable real estate market. No one is predicting a boom, but it is highly possible that prices have hit bottom.
There are signs that interest rates have the potential to increase some more over the next year. Combined with the new mortgage rules, that could make it more challenging for buyers who wait. Predicting the future is a fool’s game. The only way to know the market has turned is to see prices going up, which means you’ve missed the bottom.
We know that owning a home is one of the best investments you can make. For those who are thinking about buying their first home or moving up, the signs suggest that now might be the opportune time to act on those thoughts.
Fri, 22 Dec
Sales in Red Deer in November were down compared to October’s and the early onset of winter may have been at least partially to blame. Sales are off slightly compared to last November, while the number of active listings remains considerably higher, keeping buyers in the driver’s seat. According to the Alberta Treasury Branch there are signs that the economy is gradually improving and we are hopeful that will translate into a more active market in 2018.
The key findings of ATB’s latest Economic Outlook are:
- Alberta has emerged from two years of recession with real GDP growth of around four per cent in 2017. ATB Financial’s Economics team is forecasting real GDP growth of 2.7 and 2.2 per cent in 2018 and 2019, respectively.
- Retail and housing sector performance has improved.
- Oil prices have steadied, and have begun to inch higher (currently around $US 55 per barrel).
- Alberta’s energy sector will grow this year.
- Tourism, agriculture and agri-food will continue to show steady growth.
- Net out-migration to other provinces is likely to taper off but continue at a slower rate next year.
- Alberta is expected to see a stubbornly high unemployment rate in 2017 and 2018.
Mon, 20 Nov
The Red Deer market showed signs of improvement in October with sales up from September and a lower active listing count, although there are still 120 more active listings today than there were a year ago. The sales to listing ratio shows the market getting closer to balance but a sales to listing ratio of 25 – 30% would be ideal, where neither Sellers or Buyers have the advantage.
The economy continues to show signs of improvement which should contribute to eventual gains in the housing market, although there are still some headwinds. In an effort to curb rising house prices in Toronto and, in anticipation of higher interest rates, the federal government has once again tightened mortgage rules for all Canadians. Buyers with more than 20% down will now be required to qualify for financing at the Bank of Canada’s posted rate of 4.95% or 2% higher than the actual rate on their mortgage (whichever is higher) effective January 1, 2018.
Homebuyers who will be affected by the new rule should consider whether buying before Jan. 1st is in their best interest. Home sellers will also be affected by the new rules as those buyers will now qualify for lesser mortgage amounts.
Thu, 19 Oct
It appears that the first half of October was a little better than the same time in September. In most of our markets, the active listing count is down quite a bit from September which is also encouraging. It is almost certain that the continued tightening of mortgage qualifying requirements is a large contributor to a little slower market.
It would be irresponsible to tell our sellers that the market is going to improve much over the winter. While spring is likely going to be a little better, it would also be irresponsible to tell our sellers that prices are going to recover back to 2014 levels next spring. That is simply not going to happen and it would be wrong to give false hope.
The bottom line is that it will likely take two or three years for prices to appreciate significantly unless something of an economic miracle happens.
Fri, 06 Oct
September sales in Red Deer didn’t keep pace with the strong performance in August and it turned out to be the slowest month since March of this year. We aren’t sure what triggered the slowdown except that maybe the extra activity in August was in anticipation of higher mortgage rates coming in September.
The Alberta economy certainly does appear to be improving, with oil prices hovering over $50US and stories of oil companies having trouble hiring. We know it isn’t like the good old days, but some improvement is certainly welcome.
One major factor that impacts the real estate market in a large way is migration into or out of Alberta. According to TD Economics, Alberta had a net gain of 131,669 people from other provinces between July 2010 and July 2015 and then lost 30,239 between July 2015 and July 2017. When they all came, we built housing to accommodate them, so now we have a few more homes than we have people to occupy them. Supply and Demand are the single largest influence on real estate prices and demand is down as a result of the loss of those people. Alberta’s total population has grown over the past two years as a result of international migration and natural births. The problem is that a lot of that growth won’t contribute economically for a few years.