Sales in the first two weeks in September are on par with the same time in August, while the number of active listings is up slightly from the first of the month.  At the pace we are on, the sales to listing ratio this month will fall into “buyer’s” territory for the first time in many months.  That is normal at this time of year, but is likely also due to the slowing economy stretching into several months with no immediate relief in view.

In spite of the doom and gloom, the local market is doing very well.  The number of pending sales compares closely to the number we had pending a year ago.  Showing activity continues to be quite strong and those homes that are well priced and well presented continue to attract buyers.

While those employed in the energy industry are no doubt feeling the effects of protracted low oil prices, there are many segments of the economy that are benefitting from those low prices.  Tourism, agriculture, transportation and manufacturing are some of those beneficiaries.  A strong US dollar also provides a huge boost to tourism and those industries exporting goods and services anywhere in the world, since they are almost always paid in US dollars.

Our new provincial government has taken the position that the civil service won’t be affected by the slowdown and have clearly stated their intention to run large deficits in order to fund infrastructure development.  Whatever we believe the long term effects of those policies will be, there is no doubt they will pump money into the economy now, possibly lessening the short term negative impact on the housing market.

Economic slowdowns in Alberta have come and gone several times in recent years – 1984, 1992, 2002, 2008 to name the most recent.  Each time seemed quite desperate for those in the middle of it.  We genuinely feel for those who are most affected and never want to minimize the challenges they face, but we inevitably come out of it stronger, smarter and better able to deal with the next challenge.

Sales in August slipped while the number of active listings increased slightly. It is likely that we are now seeing the first signs
of low oil prices in the housing market. Historically, slower sales and higher inventory levels in Alberta have occurred about
a year after a slowdown in the energy industry.
The Red Deer market has finally moved into balance after giving sellers the advantage for several months. Extremely low
interest rates have been influential in our strong market so far this year. Higher supply and lower demand will have a
calming effect on prices this fall and combined with those low interest rates, will create an ideal environment for buyers who
are not affected by the energy industry slowdown.
Opinions on where energy prices are going vary. Some believe that OPEC will reduce production while US oil reserves are
shrinking more quickly than previously forecasted. Others believe the price of oil will remain below $50 for at least another
year. Whatever the case, the world still needs vast amounts of oil every day and energy companies will adapt to their
environment. The Alberta economy does rely on a strong energy sector to fuel a “strong” economy, but we will survive this
downturn the same as previous ones and come out of it stronger, smarter and more efficient. That’s what Albertans do.