Mid-Month Market Update October 15, 2019

The typical fall real estate cycle sees the number of active listings go down with sales following suit.  This year is no different with the number of active listings in central Alberta off by more than 200 (almost 7%) compared to the middle of September.  Sales compared to the middle of September are down almost 15%.  Typically, the percentage decrease in listings and sales should be similar, but we suspect many Albertans are waiting for election results before making the decision to buy.There is no clear leader in the election and the nature of the conversation around the energy industry has been very negative.  It appears there is potential for a federal government that is not friendly to the energy industry that is a major employer in Alberta and the source of much of Canada’s wealth.  No wonder some folks are awaiting the outcome of the election before making one of the biggest financial decisions of their life.  No matter what happens in the election, Canadians and the rest of the world will need oil and gas for many years and whichever federal government we end up with will know it.  We Albertans are used to difficult times and we will survive these.

Clearwater County Market Update – October 1, 2019

Residential sales in central Alberta in September were down slightly (7.65%) compared to August while year to date sales are down 14.65%.  Red Deer was a bit of a different story with sales in September up very slightly compared to August and year to date sales down by 4.7%.  The surprise in the Red Deer market comes on the active listing side where inventories dropped to 692 compared to the beginning of September when there were 748.

We have identified the current situation as our “new normal” in central Alberta for some time now.  Alberta history over the past 40 years has taught us that the market always recovers from a downturn with a vengeance and comes back stronger than ever.  Many homeowners are still working on that premise, but we have to ask ourselves what might happen to drive a recovery?

Previous recoveries have always been financed by energy.  Alberta’s ability to export our oil at world prices is being blocked on all fronts and it will likely be a long time before that changes, if ever.  We believe that Albertans are the most resilient, innovative and progressive people in Canada and we will eventually return to prosperity, but it will take longer than it has in the past.  In the meantime, we must learn to accept our current reality and move on.

Rocky Mountain House Market Update – October 1, 2019

Residential sales in central Alberta in September were down slightly (7.65%) compared to August while year to date sales are down 14.65%.  Red Deer was a bit of a different story with sales in September up very slightly compared to August and year to date sales down by 4.7%.  The surprise in the Red Deer market comes on the active listing side where inventories dropped to 692 compared to the beginning of September when there were 748.

We have identified the current situation as our “new normal” in central Alberta for some time now.  Alberta history over the past 40 years has taught us that the market always recovers from a downturn with a vengeance and comes back stronger than ever.  Many homeowners are still working on that premise, but we have to ask ourselves what might happen to drive a recovery?

Previous recoveries have always been financed by energy.  Alberta’s ability to export our oil at world prices is being blocked on all fronts and it will likely be a long time before that changes, if ever.  We believe that Albertans are the most resilient, innovative and progressive people in Canada and we will eventually return to prosperity, but it will take longer than it has in the past.  In the meantime, we must learn to accept our current reality and move on.

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.