Central Alberta sales in the first half of April continue to break records and our year to date numbers have reached an all time high, surpassing the heady markets way back in 2007. A year ago, the market stumbled badly as we were in full pandemic lockdown, so comparing last April with this April is not relevant. And, comparing the first 3½ months of this year to the same period last year really isn’t relevant either, except that we are still in full lock down very similar to where we were a year. What’s the difference? A year ago we didn’t know anything about Covid and there were concerns it could wipe out large portions of our population. Today, we are far more aware and probably less concerned especially with vaccines reaching our most vulnerable.
The federal budget promised another $100 billion in spending which would be a pretty good indication the market will stay strong. Apparently most people are better off now than they were a year ago with still nowhere to spend all that extra cash except on housing. We expect more inventory to come on as we move into our spring market which will provide the product that hungry home buyers are looking for. The only potential challenge to this good market is higher interest rates which are undoubtedly somewhere in our future as a consequence of all that government borrowing.
The spring real estate market is here, with a vengeance! Residential MLS sales in central Alberta were up a staggering 127% in March of this year compared to March 2020 and in the first quarter of 2021 were up 93% compared to the first quarter of 2020. Larger central Alberta centres are now well into market balance while Blackfalds experienced a seller’s market in March for the first time in many years.
The question that keeps coming up is, what is driving all the activity and the answer is just as elusive as it was in January and February. We believe that Covid exhaustion is motivating people to move to the country, or smaller centres, or bigger homes that can accommodate working from home, or just for a change. Too much time in the old place can make us yearn for something new.
And, of course, the lowest interest rates in memory are a significant factor as well as the multi-billions of dollars being pumped into the economy by federal and provincial governments. Some of that money is for Covid relief, some of it for extra wages to health care and front line workers, and some for incentives and wage relief to business. The fact is there is about $360 billion more floating around the Canadian economy than there was a year ago and most people have no place to spend it, so moving to a new home gets the nod.
The upward trend continues for both listings and sales in central Alberta, although it’s not a perfect balance with sales going up faster than listings. Some of our markets are well into balanced territory with others moving quickly in that direction. A balanced market is one where neither buyer or seller has the advantage. In every market there are certain price ranges where we have tipped into supply and demand imbalances that give the seller the advantage for the first since 2014. Contact your local RE/MAX Associate to for detailed information on your market and where your home sits.
Spring is here…. in the real estate market anyway. Central Alberta residential MLS sales in February were up 43% over January of this year and an incredible 94% compared to February 2020 (before Covid). Amazingly sales in the first two months of 2021 were 21% higher than the first two months of 2014 (the most active year for sales since 2007).
The sales to listing ratio in several of our local markets placed them firmly into CMHC’s definition of a balanced market and the rest are quickly moving toward that ideal. The market under $400,000 has been especially strong and the advantage buyers used to have has quietly slipped away with stories of multiple offers now common.
What is driving that kind of activity in the middle of the Covid pandemic and an Alberta economy suffering from the energy downturn? Interest rates are part of the answer but it’s not the whole story. Albertans are resourceful, determined and willing to take risks. The lowest prices in years combined with those historic low interest rates has made the risk of moving to home ownership in uncertain times worthwhile.
Yes, spring is here! If you are thinking of selling, it’s not too early to start planning your move. Call RE/MAX today!
Sunny Days! We’re all tired of nothing but Covid news, but there is lots of good news out there if we can get past the bad stuff. For example, WT oil prices have increased to over $60 US per barrel (about $76 Canadian – still more than $60 after the Western Canadian Select differential has been taken off). Demand for oil and natural gas is booming at the moment and the US ability to produce it has fallen off after the Biden administration stopped fracking in parts of the US.
The Covid vaccine looks like it is finally making its way to Canada in spite of massive gaffes by the federal government, and Covid counts and hospitalizations are down across the country. Those factors will allow governments to relax the rules and let us get closer to the normal we are all desperate to return to.
We believe that good news is part of what is driving the real estate market. Sales in central Alberta in the first two weeks of February are almost double what they were last February and the number of active listings is down by 33% compared to last year at this time. For the first time in several years, many central Alberta markets are in balanced territory or close to it.
Is Covid part of the recipe for a strong real estate market? It appears so, with sales continuing to exceed pre-Covid numbers from last January across most central Alberta markets. There is no doubt there are other ingredients, including the lowest interest rates in history, but the market has been stronger since the relaxations came into effect after the first wave last June. And the latest restrictions on activity haven’t stopped people from buying and selling homes.
Central Alberta sales were up 50% in January 2021 compared to January 2020 (before the pandemic began) and when the future outlook was considerably rosier than it is today. Red Deer sales were up 45% in January and the only central Alberta markets that are down were Lacombe and Rocky Mountain House and only slightly.
“We’re going to put our house on the market in the spring” is a phrase we often hear, and in normal times it’s a reasonable decision. Spring is typically the busiest home buying time of the year. But, these aren’t “normal times”. Right now supply is low and demand is strong which means this is the right time to put your house on the market, especially if it’s going to be priced under $500,000 in the larger markets and under $300,000 in the smaller markets. Call your local RE/MAX Associate for details about your market.
Central Alberta residential MLS real estate sales are off to a great start in 2021, up 48% in the first two weeks compared to the same period in 2020. On the supply side, the number of active listings is down 31% compared to one year ago. When demand increases and supply decreases, prices will begin to firm up, but only when the sales to listings ratio goes well over 20%. Right now, that ratio is about 13% for all of central Alberta, so there are still some good opportunities for buyers out there.
The sales to listing ratios are important whether you are buying or selling and they vary from city to city and town to town and from one price range to the next. It’s important to get the real numbers for each area and price range you are interested in. Thankfully, your local RE/MAX Associate has this information at their fingertips for most central Alberta markets. Call us today for a free consultation.
To say that 2020 was an interesting year would be an understatement. We started out with high hopes that this was the turnaround year for the Alberta economy and the real estate market; and for at least a couple of months it looked like our hopes were valid. Then that unwelcome intruder showed up and our hopes dimmed dramatically. In June, when it seemed we were maybe at the end of the worst of it, things brightened considerably and while the economy didn’t improve much, those CERB payments and historic low interest rates were a boon for the real estate market which ended the year with the number of sales in Central Alberta just 5.6% behind last year’s total. In hindsight, it was a fantastic year when viewed from our April and May perspective.
Our crystal ball is a little foggy looking ahead to 2021. Making bold predictions is often a fool’s game, but we are going to step out and say that we expect this year’s real estate market to be much the same as last year’s. There is a slight difference at this point because we are starting out with much lower inventories than we’ve had in Central Alberta for many years. Lower inventories combined with robust demand should dictate price increases, but we believe that robust demand will encourage sellers who have been waiting for fair winds and an end to Covid to re-enter the market and keep things in balance. We believe 2021 will be an interesting year, but in a much better way.
We continue to be amazed. In spite of recent tougher Covid restrictions, the real estate market marches on with sales in central Alberta in the first two weeks of December up 71% compared to the same time last year. There is no question that low interest rates are driving some of the demand, but there has to be more. Could it be that consumer confidence is improving with a vaccine on the horizon in addition to some of the positive economic news we’ve been hearing lately?
While housing demand has been rising, supply has been shrinking in many central Alberta markets, especially in the $200,000 – $400,000 price range. Those projecting lower prices (including the self-esteemed CMHC) have been completely wrong so far this year. CMHC predicted a catastrophic price drop of up to 25% in Alberta and, like most eastern institutions, had no idea of the resiliency and determination of Albertans when it comes to their desire to own their own homes. We believe that desire will continue into 2021 and only get stronger as we move out of the pandemic and back to economic growth.
Alberta and Canada are back into a state of semi lockdown as the Covid virus comes roaring back to life. After an “almost” normal summer and fall and a nicely recovering real estate market, we are now faced with another potential economic slow down. The real estate market normally slows down over the winter months and it will almost certainly follow that trend again this year with some help from Covid.
We are impressed by the resilience and determination of Albertans to continue living and working normally as much as possible, which is reflected in our numbers. Year to date sales in central Alberta have surpassed the same time in 2019 by 3.16%. While that doesn’t seem like a large number, we would never have predicted this outcome in April or May. We have every confidence that we will get through this latest situation as well.
There are a lot of very positive economic events happening in Alberta and western Canada with three pipelines close to crossing the finish line, a massive natural gas pipeline under construction, recovering oil prices and more drilling forecasted for this winter, and one of the best years ever for agriculture and crop production. Alberta may be down at the moment, but we are far from out.