Red Deer Market Update – Red Deer experienced strong sales in the first half of July while at the same time the number of active listings is up enough to keep the market in balance.  We have been tracking the market for about 30 years and it almost always follows the same path – listings and sales up in the spring, tapering off in the summer with a slight uptake in the fall and then down to the lowest level in December and January.

The market is also quite predictable in other ways.  The lower to middle ranges of the price spectrum are typically the most active because that is where the largest portion of the population is comfortable.  At the high end, new construction is a strong competitor to the resale market.  People who have larger budgets are more likely to want new and shiny and less concerned about finances.

The health of the local real estate market requires population growth and jobs.  Central Alberta has had an abundance of both this year, thanks mostly to the energy industry, but it appears that other industries are also making a strong contribution based on the ATB article below.

Sales of non-energy exports reach post-recession high – Todd Hirsch, Chief Economist, ATB Financial

The value of Alberta’s international exports rose to $10.52 billion in May, thanks partly to higher sales of agricultural, forestry and other non-energy products. The slight increase over April represents one of the highest amounts in the last five years, according to Statistics Canada.

Approximately three-quarters of the province’s sales abroad are oil and natural gas, as well as refined petroleum products. The value of sales is rising due to higher prices in recent weeks. The prices of West Texas Intermediate crude and the benchmark Western Canadian Select Blend of oil are both higher compared to a year ago. Tensions in Russia and Ukraine, as well as increased instability in Iraq, have pushed global oil prices steadily higher.

Perhaps even bigger news is that Alberta’s non-energy exports reached a near five-year high in May with a total of $2.77 billion—the highest level in the post-recession period. Non-energy exports, which are made up mostly of agricultural products, specialized machinery and equipment, and forestry products, have struggled to gain traction over the last few years. A faster-growing U.S. economy and a softer Canadian dollar have worked in tandem to increase sales south of the border.

Alberta’s total international exports over the last twelve months are 15.9 per cent greater compared to the previous twelve months. Nationally, total exports increased to $44.2 billion. This is the second highest value on record, led by motor vehicles and parts.

Sales in Red Deer in June dropped off slightly from the incredible pace set in May, but it was still a very strong month. Year to date sales are up almost nine percent which is a strong increase over a very good year last year. The number of active listings has kept pace and actually brought the sales to listing ratio down a little, although it still signals a very strong seller’s market.

June brought some relief for buyers in the $250,000 ‐ $350,000 price range. Sales actually fell off while the number of active listings increased. The $350,000 ‐ $450,000 was a little less friendly to buyers with the ratio of sales to listings favouring sellers.

The strong market we have experienced this year is the result of a strong economy that creates lots of jobs and encourages migration from the rest of Canada and the world. Population growth creates demand for new construction which is in itself an economic driver. In 2013 Alberta’s population grew by 3.25%, the fastest in Canada by double. In the first quarter of 2014, we managed a net gain of more than 9,500 people ‐ on pace for a 40,000 net gain for the year.