Market Update – Month to date sales in Red Deer in August have slowed considerably compared to the same period last year and it’s unlikely we will reach the levels achieved in July. Some of that is probably due to the very nice summer weather we’ve been experiencing. As you can see from the articles below, the job situation in Alberta is very
healthy which should translate into a healthy housing market.

Our other central Alberta markets are experiencing much the same conditions with the exception of Sylvan Lake whichmay be benefitting from the nice weather and the resulting heavy lake traffic.

Oil prices have been gaining ground recently with prices hovering around $90 per barrel. While that doesn’t translate into good news at the pumps, it certainly is good news for energy
sector employees in central Alberta. We expect a good fall for the central Alberta housing market – an adequate supply and strong demand which equates to a balanced market, but very little increase in prices.

Excerpts from ATB Financial Daily
Economic Comment by Todd Hirsch, Senior Economist

Aug. 13, 2012 Full and Part Time Work – Last week Statistics Canada released the latest Labour Force Survey, which showed Alberta gained about 5,800 jobs in July. But not all jobs are the same—economists like to see gains in full-time positions as assign of a healthy economy. On that front, Alberta is doing just fine.

In July 2012, there were just under 1.8 million people working in full-time jobs in the province while there were only 351thousand working part-time. Compared to the previous month, full-time jobs were up by about 15,300, whereas there were actually 9,600 fewer part-time jobs.

Aug 14, 2012 – How Good Do We Have It? Most job seekers in this province know firsthand that times are good and finding work is generally not too difficult.
But Albertans may be surprised to hear that compared to many other places in the developed world— things are more than good—they’re great!

The Organization for Economic Cooperation and Development (OECD) tracks and reports the unemployment rate among the advanced, wealthy countries of the world. Given all of the economic uncertainty in many parts of the globe at the moment, these rates vary wildly.

Currently the highest unemployment rates among the OECD countries are found in Europe, with Spain taking top (bottom)honours at 24.6 per cent unemployment— basically, one in every four Spaniards is without work. Greece comes in second with an unemployment rate of 21.9 per cent, followed by Portugal at 15.2 per cent. Overall, the European Union is
grappling with unemployment of 10.3 per cent.

At the other end of the spectrum is Norway. Its oil fuelled economy means that only 3.0 per cent in that country are out of work.

The Asian OECD countries of South Korea and Japan also enjoy extremely low rates (although Japan’s overall economy is not performing that well).

If it was counted separately as an OECD country, Alberta would find itself in very good company. With an unemployment rate of4.5 per cent in May, it would rank as the fourth best place in the industrialized world in which to be looking for work.

The number of residential sales in Red Deer in July were just slightly higher than July 2011.  The good news is that year to date sales are up 15.5% thanks to a strong spring market.  The number of active listings compared to last year is down from 675 to 521 which has been a major factor in bringing the market into balance.

The sales to active listings ratio for July 2012 was 31%.  That means 3 buyers for every 10 homes on the market which CMHC considers balanced – where neither buyers or sellers have an advantage.   When we are experiencing a balanced market, prices should remain stable, rising to match inflation only.

The article below suggests that more people are moving to Alberta than ever and if that’s the case, the buyer advantage will diminish as more folks compete for those available homes.

Accommodating the Alberta bound – Will Van’t Veld , Economist, ATB Financial

There’s a reason why Calgary’s CTrain has been feeling more congested lately: people have been flocking to Alberta. Not since the boom years have so many people arrived in our province—and if the pace keeps up it will have important implications for the local economy.

That people are coming to Alberta shouldn’t be a surprise.  In fact, it’s slightly more surprising that it took until the first quarter of 2012 to see the numbers really spike. The unemployment rate is not only well below the national average, but wages have been steadily climbing. In fact, the average weekly wage in Alberta is now $156 higher than in Ontario.

While migrants from other provinces have recently shown more interest in our province, the upward trend in international migration has been occurring since the recession hit. Alberta gained about six thousand migrants due to international migration in the first quarter, almost double what the province was recording just five years ago.

The tremendous influx of people during the boom years caused a severe shortage of housing and other social services. So far, Alberta’s infrastructure and housing stock appears more prepared to accommodate the growing population. There’s a good reason for this, as housing starts, for instance, might have dipped during the past couple years, they didn’t fall off of a cliff either. Major infrastructure projects also continued to go ahead.

With companies actively recruiting out of province workers, both nationally and internationally, and the prosperity gap still heavily in Alberta’s favour, there’s a good chance more people will be Alberta bound in the coming quarters. At a certain point it may strain our ability to accommodate them, but so far so good.