August 7, 2012
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.
