March 5, 2016- Market Update
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.
