MLS sales in the first two weeks in June continue to improve across central Alberta, up 38% from the first two weeks in May, but still down 20% compared to the first two weeks in June 2019. The month over month improvement in sales is impressive considering we are still coming out of the Covid shut down and experiencing low oil prices and high unemployment.
Some of the sales activity is likely a result of pent up demand after folks have been locked down for so long. And, the impact of the pandemic in central Alberta has been mild and people may be deciding to get on with their lives now. Others spent time fixing up their homes while they were at home and have decided it is a good time to move up or down or away. Whatever the reason, it’s good to see that housing is still top of mind for many central Albertans.
Good news! Mortgage insurers Genworth and Canada Guaranty have decided not to adopt CMHC’s damaging new mortgage qualifying requirements that were announced for July 1. Unfortunately CMHC continues to establish lending criteria based on the Toronto real estate market where prices remain inflated. Apparently they haven’t heard of a place called Alberta where their restrictive policies have already done serious damage.
Central Alberta sales in May improved considerably over April’s, up by 32%. That is good news, but must be viewed in perspective. Sales in May 2020 were down 39% compared to May 2019. The active listing count was down 17% June 1st 2020 compared to June 1st of last year which helps keep the ratio of sales to listings closer to balance.
Canada Mortgage and Housing recently made some dire predictions about the Canadian housing market – prices may go down 9-18% in most markets and as high as 25% in Alberta. While we respect that CMHC’s economists make these predictions with all sincerity, they are working with data, while we work with real people. Most of the sellers we deal with simply won’t accept a 25% reduction in the value of their homes. They will refuse to sell or won’t be able to sell because they are under water with their mortgages. There will be a few who have to sell, but as long as there are more buyers than desperate sellers, prices are unlikely to drop significantly.
The average sale price in central Alberta in May 2019 was $308,942. The average price in May 2020 was $315,626. The median price in May 2019 was $288,500 and in 2020 was $276,000. Average and median prices are not pure indicators of value, but they give support to the idea that prices aren’t deflating to any degree yet. That is probably because prices are already very low after 5 years of economic malaise in Alberta.
The real estate market has certainly slowed since Covid-19 became our daily reality, but it hasn’t died. People are still selling and buying homes and the activity in the first half of May was much better than it was in the first half of April. The pending sales count (shown in brackets) is an indication of that increased activity and points to an even better second half of the month.
The industry has implemented protocols to protect the health of our Associates and our clients and they are working well. We will continue to work cooperatively to ensure that safety is our first concern so that our clients can take advantage of very attractive prices, ample inventories and low interest rates. It’s a great time to buy!
Covid-19 has had a dramatic impact on the central Alberta real estate market in just two short months. Sales in April were down 48% compared to April 2019. We started the year optimistic that the market was turning around after five difficult years in a row, but Covid conspired against us and we have a new challenge to overcome. Covid-19 shut down the world economy and the energy industry with it. Oil prices have hit record lows and will probably be a bigger challenge for Alberta than the Covid pandemic.
In spite of all the negatives, showing activity seems to be picking up since word came out that some of the restrictions to normal activity are being lifted. There are many opinions on whether it is too soon, just the right time or too late. Everyone has experienced this thing differently and only time will tell who is right. We respect all views and are dedicated to professionally and safely solving our clients housing needs.
Alberta still owns the 4th largest oil reserves in the world and they will be needed in the future. While things look bleak now, we continue to be confident that the future of Alberta is bright.
Sales in central Alberta in the first two weeks of April were down 33% compared to the first two weeks in March. Real estate sales always lag changes in the economy. The sales record in March were mostly the result of activity in January and February. The sales recorded in April are mostly the result of activity in February and march. It stands to reason that sales will be fewer as we move through the next few months while our economy is effectively shut down.
The number of active listings is lower than normal for this time of year and is obviously also a product of Covid-19. That does help the market stay closer to balance and will keep prices from falling too hard. The real estate market is certainly going to feel the pain of the reality we are dealing with, but it will survive. Housing will always be essential in Alberta.
The provincial government has designated our services as essential and we are still doing business. We are learning quickly how to do it in the new era of social distancing and virtual contract. We are now capable of virtual open houses, virtual client meetings and virtual signing. Those who need us can be assured that we are being careful to conduct our business, being respectful of our client’s health and well-being.
Real estate sales in March were surprisingly resilient when it came to the final numbers. While it seems like the Covid-19 issue has been going on forever, it has just been a month since it has really impacted us. Many of the sales reported in March were started before the panic and some of those who sold then, now have to buy. We expect sales to slow incrementally as the pandemic progresses.
Real estate services have been deemed essential by the Provincial Government. We continue to work but are doing so with the utmost caution and concern for our client’s health and safety. We have implemented protocols for both buyers and sellers that include questioning about symptoms, travel and exposure as well as procedures for showing that include wearing gloves, covering faces and not touching anything. We are also asking our sellers to clean surfaces before and after showings. And, we don’t travel in the same vehicle as our clients.
Like everyone else, we have no idea how long this will last or the total effect it will have on the economy. We know there is an end out there where we can all get back to normal. In the meantime, we are going to make the best of the situation and continue to serve our clients and the community the best we can. If people are quarantined or unable to get out for essentials, please contact one of our offices in Red Deer, Sylvan Lake, Lacombe, Ponoka, Blackfalds, Rocky Mountain House or Innisfail and we will gladly help with pick up and delivery free of charge.