Mid-month Market Update September 15, 2019

Sales in the first two weeks of September were up slightly in central Alberta compared to August, while the number of active listings is down.  It’s normal to see slightly higher sales in September, but it’s especially significant considering some Albertans may be waiting for the result of the federal election before making a move.  Lacombe, Ponoka and Penhold were the ones who bucked the trend and saw an increase in their inventories.  Coincidentally those are the markets that don’t already have large excess inventories.

Generally, the number of homes on the market in central alberta is down compared to this time last year.  There are a couple of possible reasons for the change.  First, some of the people who had homes on the market a year ago weren’t getting the prices they needed so decided to wait until the market improved.  Second, new construction has slowed and our total inventory hasn’t been growing much.  Our population has increased a little in the past year which would have absorbed some of our excess inventory.

Rocky Mountain House Market Update September 1, 2019

August sales are typically a little slower than July’s as people wind up their summer holidays and get ready to get the kids back to school.   Sales in Red Deer in August were quite a bit lower than we expected and we aren’t sure why, other than the economy continues to struggle.   Lacombe, Ponoka and Rocky fared a little better while Sylvan Lake, Blackfalds and Penhold down compared to last month.

There are many encouraging signs that the new provincial government is working hard to unravel red tape and encourage investment in Alberta, but they have only been at it for 3 months and it’s going to take longer than that to see the results of those efforts.  We suspect a lot of corporate investors as well as the general public in Alberta are waiting to see the results of the federal election before making any moves.

For those who are optimistic, there is a tremendous opportunity right now to buy in a market with excess inventory to choose from at very attractive prices and relatively low interest rates.  For those who want to partner with the federal government, the new equity partnership is now available.  The government will invest 5% of the purchase price on resale homes or 10% on new homes interest free, but they expect to share in the profits when the house is sold. 

Clearwater County Market Update September 1, 2019

August sales are typically a little slower than July’s as people wind up their summer holidays and get ready to get the kids back to school.   Sales in Red Deer in August were quite a bit lower than we expected and we aren’t sure why, other than the economy continues to struggle.   Lacombe, Ponoka and Rocky fared a little better while Sylvan Lake, Blackfalds and Penhold down compared to last month.

There are many encouraging signs that the new provincial government is working hard to unravel red tape and encourage investment in Alberta, but they have only been at it for 3 months and it’s going to take longer than that to see the results of those efforts.  We suspect a lot of corporate investors as well as the general public in Alberta are waiting to see the results of the federal election before making any moves.

For those who are optimistic, there is a tremendous opportunity right now to buy in a market with excess inventory to choose from at very attractive prices and relatively low interest rates.  For those who want to partner with the federal government, the new equity partnership is now available.  The government will invest 5% of the purchase price on resale homes or 10% on new homes interest free, but they expect to share in the profits when the house is sold. 

Mid-month Market Update August 15, 2019

August sales in the first two weeks were a little slower than July’s.  The number of active listings in most markets we serve

were down, but the overall number was slightly higher for all of central Alberta.  The trend to lower inventory levels suggests the market is slowly adjusting to the new price reality, but more likely explanation is that historically, inventories have peaked from April to June and then start to decline going into the fall.

There appears to be some optimism that the market is slowly recovering after almost five years of pain, but that recovery will be erratic and slow as long as our economy struggles from a lack of access to markets for our oil and agriculture products.

Clearwater County Market Update August 1, 2019

July was a good month for most central Alberta real estate markets with more sales activity and fewer active listings, bringing some markets closer to balance, defined as the place where neither buyer or seller have the advantage.  While year to date sales in every market we serve are down compared to last year, we did do some catching up in July which is normally a slower month due to summer holidays.

We aren’t sure what drove that more positive market last month, but there area a couple of possibilities.  First, interest rates have come down and the federal government lowered the qualifying rate for the mortgage stress test.  Lower interest rates always stimulate sales and a lower qualifying rate allows more buyers to enter the market.

Second, sellers are starting to adjust to the lower price environment.  It’s been almost 5 years since prices started to trend down and there is no sign they will be going up soon.  It appears that sellers are finally accepting the new reality and pricing their properties accordingly.  Lower prices also stimulate sales and allow more buyers access to the market.

Rocky Mountain House Market Update August 1, 2019

July was a good month for most central Alberta real estate markets with more sales activity and fewer active listings, bringing some markets closer to balance, defined as the place where neither buyer or seller have the advantage.  While year to date sales in every market we serve are down compared to last year, we did do some catching up in July which is normally a slower month due to summer holidays.

We aren’t sure what drove that more positive market last month, but there area a couple of possibilities.  First, interest rates have come down and the federal government lowered the qualifying rate for the mortgage stress test.  Lower interest rates always stimulate sales and a lower qualifying rate allows more buyers to enter the market.

Second, sellers are starting to adjust to the lower price environment.  It’s been almost 5 years since prices started to trend down and there is no sign they will be going up soon.  It appears that sellers are finally accepting the new reality and pricing their properties accordingly.  Lower prices also stimulate sales and allow more buyers access to the market.

Clearwater County Market Update July 1, 2019

June was a month that saw significant news events that will impact the Alberta economy, which will in turn have a positive impact on the central Alberta housing market.  First, approval of the Trans Mountain pipeline.  Albertans will be excused for being cynical about whether that approval will result in pipe in the ground, but we believe there is a good chance construction will start this year, creating thousands of well-paying jobs.

Second, the UCP Government reduced corporate tax rates by 1% effective July 1 with another 1% reduction scheduled for Jan 2020.  Those reductions are a signal to the world that Alberta is open for business.  It is also an opportunity for Alberta businesses to expand and invest that money that would have gone to government revenue.  The elimination of the carbon tax also put more money back in consumer’s pockets and into the cash flows of businesses that really needed it.

Third, the City of Red Deer just released the results of the 2019 census and the population has recovered the losses we experienced in 2015 and 2016.  While the gain isn’t huge, it is enough to lower our vacancy rate and fill some of the houses that have been sitting empty.  Steady population growth creates the need for new construction and jobs are the result.

Mid-month Market Update July 15, 2019

Sales in the first half of July in central Alberta were up slightly over June, and might be a sign of growing optimism that the economy is slowly turning the corner.  That optimism may also be reflected in the increase in the active listing count after several months of decline.

Sellers entering the market thinking that prices have recovered will be disappointed.  Price is determined by the relationship between supply and demand and there are still far more sellers in the central Alberta market than buyers.  Yes, there is room for optimism, but at the current pace of the real estate market we are still many months away from prices going up.

Rocky Mountain House Market Update July 1, 2019

June was a month that saw significant news events that will impact the Alberta economy, which will in turn have a positive impact on the central Alberta housing market. First, approval of the Trans Mountain pipeline. Albertans will be excused for being cynical about whether that approval will result in pipe in the ground, but we believe there is a good chance construction will start this year, creating thousands of well-paying jobs.

Second, the UCP Government reduced corporate tax rates by 1% effective July 1 with another 1% reduction scheduled for Jan 2020. Those reductions are a signal to the world that Alberta is open for business. It is also an opportunity for Alberta businesses to expand and invest that money that would have gone to government revenue. The elimination of the carbon tax also put more money back in consumer’s pockets and into the cash flows of businesses that really needed it.

Third, the City of Red Deer just released the results of the 2019 census and the population has recovered the losses we experienced in 2015 and 2016. While the gain isn’t huge, it is enough to lower our vacancy rate and fill some of the houses that have been sitting empty. Steady population growth creates the need for new construction and jobs are the result.

Mid-month Market Update June 15, 2019

Central Alberta sales in the first half of June are up slightly compared to the same time in May.  While the Red Deer numbers are disappointing, there are currently 40 reported pending sales which suggests the month could end strong.

The number of active listings compared to this time last month is up in a little Red Deer, Sylvan Lake and Ponoka and down in Lacombe, Blackfalds, Penhold and Rocky.  When compared to last year at this time, the active listing count is down significantly in almost every market.  That brings the sales to listing ratio and the market closer to balance and suggests the days of declining prices may be over.

Albertans are eagerly waiting for an announcement on June 18 about the Trans Mountain Pipeline.  A positive result will surely contribute to improved consumer confidence.  In the meantime, mortgage rates have dropped with 5 year terms available as low as 2.97%.  It’s still the perfect time to buy, but the window may be closing a little.