November 15 2014 – Market Update
Red Deer Market Update – The market is moving back toward normal for this time of year on both the supply and demand sides of the spectrum although the number of pending sales suggests we could finish the month stronger than last year. There appears to be ample supply to satisfy buyers in every price range which suggests the market is balanced. While there is some concern over lower oil prices, many experts believe our economy will remain strong at least for the next two years.
More Jobs Added Last Month – Todd Hirsch, Chief Economist, ATB Financial – Alberta’s jobs market kept chugging along in October with a moderate but positive gain of 3,300 (new) jobs. But while the total number of jobs added last month was only moderate, what was more impressive was the quality of the new employment.
There was a gain of 11,800 full-time jobs, offset by a loss of 8,500 part-time jobs. This suggests that better jobs are being created than the ones that are being eliminated, or that the part-time workers are moving into better paying full-time positions.
Looking at only the monthly movements in the job market, one would be tempted to conclude that the employment situation in Alberta has been volatile. The summer months were marked with job losses—and indeed a huge drop in August. That was followed by an apparent surge in September when the province posted one of the strongest monthly gains on record.
But this volatility is probably more illusion than reality, and a reminder that it is never wise to infer too much from one month of data. Looking over the longer term trend presents a better picture of what is happening, and indeed the situation in Alberta’s job market is healthy and stable. Since October 2013, there’s been a gain of 58,500 jobs—an increase of 2.6 per cent. As well, the unemployment rate has hovered within a balanced band in the mid-four per cent range, suggesting Alberta remains one of the hottest job markets in the country.
Excerpts from CMHC Housing Outlook – 4th Quarter 2014 – Alberta is experiencing the highest regional price gains this year as sales growth is helping lift the average resale price by more than four per cent to a projected $399,000 in 2014. The average price will continue to rise but at a slower pace to $407,800 in 2015 and $417,500 in 2016.
In Alberta, MLS® sales are projected to increase about eight per cent to 71,200 in 2014. Momentum from large migration inflows and employment gains are expected to help lift resale transactions to 72,900 in 2015 and 74,600 in 2016. The movement from rental tenure to homeownership, along with rising incomes, will help increase sales as will move-up buying. On the other hand, moderating migration inflows and higher monthly carrying cost are expected to slow the gain moving forward.
The average MLS® price in Alberta is projected to increase by over four per cent to $398,900 in 2014 and rise to $407,800 in 2015 and $417,500 in 2016. Sellers’ market conditions in Calgary are projected to ease as new listings rise, reflecting an overall provincial trend. Overall resale market conditions are forecast to remain balanced over the forecast period with the pace of price growth declining through 2016.
