MARKET UPDATE – October 1, 2017
September sales in Red Deer didn’t keep pace with the strong performance in August and it turned out to be the slowest month since March of this year. We aren’t sure what triggered the slowdown except that maybe the extra activity in August was in anticipation of higher mortgage rates coming in September.
The Alberta economy certainly does appear to be improving, with oil prices hovering over $50US and stories of oil companies having trouble hiring. We know it isn’t like the good old days, but some improvement is certainly welcome.
One major factor that impacts the real estate market in a large way is migration into or out of Alberta. According to TD Economics, Alberta had a net gain of 131,669 people from other provinces between July 2010 and July 2015 and then lost 30,239 between July 2015 and July 2017. When they all came, we built housing to accommodate them, so now we have a few more homes than we have people to occupy them. Supply and Demand are the single largest influence on real estate prices and demand is down as a result of the loss of those people. Alberta’s total population has grown over the past two years as a result of international migration and natural births. The problem is that a lot of that growth won’t contribute economically for a few years.
