December 1, 2015- Market Update
Market Update- The Red Deer real estate market is behaving a little better than other, smaller central Alberta markets, and better than we would expect considering the current economic situation in Alberta. Year to date sales in Red Deer are only down 16% when compared to 2014, but are on par when compared to the same period in 2012 and 2013. Then number of active listings is also higher than this time last year, but is not a concern unless they continue to up significantly. Red Deer has survived the downturn nicely so far.
A comparison of the West Texas Intermediate average oil price to the number of MLS sales in Alberta since 2007 supports the premise that our real estate market is directly affected by oil prices. The number of sales is directly correlated to oil prices when prices are dropping, but lags about a year behind when oil prices start to recover.
So, in order to know where the real estate is going, we need to know where the price of oil is going. Historically, prices have recovered within months of a slide, but this time it may take a little longer as the world struggles to rationalize an over-supply and demand that’s not keeping up. None of the world’s major suppliers are faring very well with current prices and something will have to give. We hope it’s sooner rather than later. In the meantime, very low interest rates will help in keeping the market moving.
