Red Deer – Sales in the first half of March are a little slower than last year although the pending sales count suggests that the month could end up within a reasonable distance of last year.  Sales activity is strongest in the $250,000 – $350,000 range but quite resilient in the higher price ranges as well.

The active listing count has climbed a little quicker than last year and as a matter of fact is higher than it was at any time last year.  The higher number of active listings will likely remain above average until things start to return to normal.  A high listing count relative to lower demand creates a buyer’s market.

The real estate market has three modes – seller’s market, buyer’s market and balanced market.  The nature of real estate markets is that they rise and fall, in tune with the economy.  Central Alberta has experienced a balanced or seller’s market almost continuously since 2012.  Now buyers will have the advantage for a time until the economy (oil prices) recover a little.

The only people that lose in a buyer’s market are those that sell and don’t buy again in the same market.  In fact, those people only lose if they are moving to a seller’s market.  If the house you are selling goes down in value, the one you buy to replace it will have also gone down in value.

The real winners in a buyer’s market are first time buyers – more choice, stable prices and low interest rates are a rare combination that shouldn’t be ignored.

A small piece of good news broke on March 15 in regard to the Alberta economy.  A portion of an article from the Calgary Herald appears below that states that the provincial government is hinting that the small business tax may be reduced in the upcoming budget.  That would leave employers with a little more money for wages and expansion and certainly help the local economy.

Premier hints small business tax may be cut in April 14 budget, Calgary Herald, Mar. 15, 2016

Alberta small businesses could get a break in the April 14 budget in the form of a one percentage point tax cut, Premier Rachel Notley hinted Tuesday.

Notley told reporters her NDP government is looking seriously at cutting the tax from three per cent to two per cent as urged by business leaders in an open letter this week.  “On the issue of the small business tax, I would say that we simply all stay tuned for the budget,” Notley told reporters after making a speech to rural politicians in Edmonton.

The premier said her government has been meeting with business leaders and stakeholders across the province on how best to stimulate economic activity and the reduction of the small business tax has been raised. “There’s no question that’s one of the issues that has been presented to us and we’re considering a whole package of issues which will be announced in the budget,” Notley added.

Market Update- RED DEER sales in February probably exceed most expert’s expectations, almost keeping pace with February of last year. The one statistic that gives some cause for concern is the number of active listings – up 28% compared to a year ago.

The central Alberta markets where we’ve seen strong new home construction in the past few years are the ones that are now experiencing higher inventory levels. Building new homes is a many months long process and slowing that process down can take many more months.  New homes that have been started have to be finished and sold.  As demand slows those new homes are finished before they are sold and as a result, added to the MLS inventory.

It seems the Alberta economy is resigned to lower for longer oil prices which will likely mean a little slower real estate market in the short term. Prices may moderate slightly, but always take longer to go down than up. The resiliency of the real estate market is being demonstrated by the number of sales we are experiencing in spite of the current energy industry slowdown.  The law of supply and demand works in energy the same as it does in the real estate market.  People will continue to need carbon energy for the foreseeable future.  The price will find a level that sustains a reasonable supply. Alberta has vast amounts of that supply that will continue to be sold and, while the boom has faded, the industry will survive like it has many times in the past.