Red Deer sales in the first half of May held up really well in spite of the distraction of the fires in Ft. McMurray The number of active listings kept climbing and that number is now significantly higher than it was a year ago.

We suspect that the Ft. McMurray fires had a hand in the slower market this month for a couple of reasons.  First, there are a lot of people living in central Alberta that work in Ft. McMurray and they certainly weren’t focused on the real estate market.  Second, catastrophic events like the Ft. McMurray fires grab everyone’s attention and limits their ability and desire to go out and make major decisions.  There is no doubt that this event has impacted the psyche of almost every Albertan.

We are already seeing activity levels resume.  It will take a long time for the people who live and work in Ft. McMurray to get back to normal.  If there is a silver lining in all of this, there will be jobs and economic activity generated putting the city back together.   Life in the rest of the province will carry on.

CMHC 2^nd Quarter Housing Update – it seems things across Alberta are pretty similar to what we are dealing with here.  Sales are down a little and inventories are up a little which means prices are down a little.  Housing starts are down and net migration is negative, although we still have some net population gains due to international migration and new births.  Unemployment is up over 7%.  The slowdown in the energy industry is starting to impact other areas of the economy, although there are some sectors doing well, especially government.

CMHC is forecasting an improved economy in 2017 as long as oil prices continue to stabilize.  If they don’t, things will likely remain the same.  There is no question that consumer confidence in Alberta is directly tied to oil prices.  The unknown is where they are going.  There seems to be evidence lately that they are headed in the right direction, although no one believes they will get back to where they were.

It’s important to keep things in perspective when it comes to the economy and the housing market.  The media is heavily focused on the negative, but there are plenty of positives if we look for them.  Low interest rates, ample choice when it comes to choosing a home and stable prices are all the good things about our current real estate market.

Why is it that the media reports the “unemployment” rate instead of the employment rate?  One is 7%, the other is 93%.  That means there are still a lot of people working in Alberta.  Those people all need a roof over their heads.  Some of them will want to take advantage of all those positives mentioned earlier and move up.  For those people, it’s a good market.

Market Update:  April sales in Red Deer were up almost 28% over March, but off 15% compared to April 2015. Year to date sales are also down about 15% compared to the same period last year. And, active listings at the beginning of May were up 21% compared to May 1, 2015, moving the market from balanced at this time last year, to a buyer’s market now.

It’s difficult to pinpoint exactly what impact the move to a buyer’s market has had on prices, but there is no doubt there has been some. Higher priced homes have been affected the most while starter and mid‐priced homes have held their value better, a function of different demand to supply ratios in different price ranges.

When the market softens, buyers naturally want to buy when prices are lowest. If you wait another month, prices may be lower, but maybe they won’t. We only know what the bottom is when prices are already on their way back up.

The absolute best time to buy is in a buyer’s market. It’s also not a bad time to sell, if you are going to buy again in the same market. If you are worried that the house you are selling has gone down in price, take comfort in the fact that the one you are buying has also gone down an equivalent amount. The benefit of buying now is there is much more to choose from!