Sales in the first two weeks in April are up 63% compared to the first two weeks of March, while the number of active listings is only up 14%.  It’s obvious that the market is heating up and home buyers are facing a tougher job finding the right home.  Tough competition in the lower prices ranges is certain to drive prices higher in the coming weeks unless we get a surge of new listings.

The active market still hasn’t changed – $250,000 – $400,000, although we are starting to see things happen at the high end of the price spectrum – nine sales over $500,000 in the first two weeks of the month, including one over $1 million.  Still, the sales to listing ratio on homes over $500,000 is only about 10-15%, in favour of the buyer.  We know that many people looking over $500,000 are going to the builders, the same people who buy new cars because they want new and can afford it.

In addition to a huge increase in firm sales so far this month, the number of listings with pending sales is up, effectively reducing the number of homes available to buyers in Red Deer to just 334.  Based on current sales, the number of active listings required to keep the market in balance is closer to 500.

According to the Alberta Treasury Branch article below, builders are responding well to the ongoing strong demand for homes across Alberta.  We have some concern in central Alberta that the number of serviced lots available for immediate construction is rapidly shrinking while the late spring is hampering servicing of new lots.  It appears there could be some shortages of lots this summer until more are serviced.  It can take most of our short spring and summer to service a subdivision.

Housing starts keep market in balance, Todd Hirsch, Chief Economist, ATB Financial – Home builders in Alberta geared back up in March after a slight pause in February. According to data compiled from Statistics Canada and the Canada Mortgage and Housing Corporation, construction started on just shy of 40,000 new homes. (This figure is seasonally adjusted and at annualized rates, meaning that if housing starts in March were to continue at the same pace for twelve months, there would be this many new homes started in one complete year.)

Housing construction is one of the most important economic indicators. It provides an excellent barometer of consumer confidence in the province. Alberta’s strong labour market and excellent income levels are giving buyers plenty of reasons to feel confident in their decision.

A good deal of economic activity in other sectors comes from housing construction. New houses stimulate retail and wholesale trade in everything from new flooring and paint to lighting and furniture for the new home. Finally, housing starts employ thousands of workers in the construction sector. Framers, carpenters, electricians, drywallers and landscapers are among the many skilled trade people who depend on new home construction for their livelihood.

Alberta’s strong job market has been a magnet for job seekers and that has added to the demand for housing. The pace of new home construction in March will add to the inventory of new and existing homes, which in some parts of the province (including Calgary) has fallen quite low. New inventory should help keep the supply and demand of houses in good balance.

Red Deer sales in March were up almost 30% over February while the number of active listings jumped 23%. Because the increase in active listings didn’t keep pace with the increase in sales, the advantage for Sellers is stronger. The tightest markets are $200,000 ‐ $250,000 and $300,000 ‐ $350,000 price ranges. Last month more than 80% of the homes listed in those price ranges sold.

Spring has been reluctant to arrive, but the spring real estate market is definitely here. All the economic indicators ‐ energy prices, population growth, manufacturing growth and oil sands development continue to point to a strong Alberta economy.

When the good weather does arrive, we are likely to see the real estate market ramp up even more.

Alberta’s population reached 4 million last year, an average growth rate of 3.4%, almost three times that of the rest of Canada. That growth creates the need for schools, hospitals, roads and infrastructure. The development of that infrastructure creates jobs and more economic activity. And the cycle continues.

Sales in the first two weeks in March were up a little from the same time in February and well down from the same time last year.  New listings are coming on the market at a brisk pace and inventories are almost at last year’s levels.  It feels like it has been busier than the number of sales would suggest and the number of pending sales supports that feeling at the highest level we’ve ever seen.

As usual, most of the activity is in the $200,000 – $400,000 price range where every third house on the market has a sale pending.  At that pace of sales, there is bound to be listing shortages heading into the spring market.

All the good news in Alberta, especially when it comes to job creation, will almost certainly keep attracting large numbers of people to come here from the rest of Canada.  Population growth fuels the housing market like nothing else.

Alberta’s Job Market Revs Up – Todd Hirsch, Chief Economist, ATB Financial – February’s job report puts to rest any lingering notions that Alberta’s labour market is shifting into lower gear. If anything, it may sound the alarm that the economy is galloping ahead too quickly. Last month, Alberta saw an increase of 18,800 new jobs (adjusted for seasonality)—the highest pace of monthly job creation in nearly three years, and well above the average gain of about 6,000 since the end of the 2009 recession.

The unemployment rate also dropped three-tenths of a percentage point to 4.3 per cent. The extraordinary performance in February brings the 12-month increase up 3.8 per cent to 82,300. Alberta now accounts for 87 per cent of all the jobs created in the entire country since February of last year.

Most of the new jobs in Alberta were in construction (+23,300), retail and wholesale trade (+7,300), and oil and gas (+6,800). These gains were partially offset by a drop in professional, scientific and technical occupations (-15,200), and health care and social assistance (-10,600). Three months ago, Alberta saw a one-month drop of nearly 10,000 jobs. That led to some concern about an economic slowdown. The longer term trend points to anything but.  With a falling unemployment rate and employment rising more quickly than the pool of available workers, the true worry could be that more Alberta employers will feel the pinch of labour shortages.

Trade deal good news for Alberta – Todd Hirsch, Chief Economist, ATB Financial – Canada’s new free trade deal with South Korea could be hugely beneficial to exporters, including those from Alberta. Prime Minister Stephen Harper signed the deal earlier this week.

With a population of more than 50 million, South Korea is nearly 50 per cent larger than Canada (population 35 million). Alberta has exported $2.9 billion in products to South Korea over the last five years—a miniscule amount when you consider total global exports over that period equalled $443.9 billion. But Koreans are becoming increasingly affluent and sophisticated, presenting Alberta exporters with lucrative opportunities.

The largest category of exports over the most recent five year period was natural resource products, notably coal and wood pulp (see graph). Machinery and mechanical appliances also made up a sizable portion (16.6 per cent). The big winners to come from the trade deal are Canadian farmers. Wheat and cereal grains make up more than 12 per cent of exports. Meat products account for another six per cent. Up until now, meat has faced high tariffs going into South Korea. With those trade barriers removed, Alberta farmers will be able to increase the volume of meat and other agricultural products they export overseas.