Market Update to Aug. 19/10 Red Deer
Price Range	All Active	Pending	Active 1 Year Ago	Sold MTD Aug. 12/10	Sold MTD Aug. 19/10	Sold MTD Aug. 19/09
< 100	27	0	26	0	1	2
100 – 150	45	0	31	2	2	1
150 – 200	82	1	70	2	4	12
200 – 250	111	6	98	2	5	13
250 – 300	153	9	80	13	18	21
300 – 325	79	7	48	5	6	18
325 – 350	80	2	43	0	1	6
350 – 375	53	5	24	1	3	7
375 – 400	58	1	38	2	3	3
400 – 450	47	2	43	2	5	5
450 – 500	30	2	23	1	1	0
500+	78	1	72	2	4	5
Total	843	36	596	32	53	93
Avg. Price	$326,984.		$327,332.	$326,731.	$322,941.	$294,192.
Days On Market	53		51	45	51	45

Market Update – We have been through a slow spot in the housing market over the past 3 months.  Lots of people are asking why.  There are a few explanations:

 

Mortgages – activity in our market peaked in April.  It’s no coincidence that is when the government tightened up lending rules and made it more difficult for first time buyers to get into their own homes.

 

Spring break-up – our local economy is still heavily reliant on the energy sector for employment and economic activity.  Our wet spring conspired to keep the oil and gas sector at home and is still making life difficult.

 

Low natural gas prices – the majority of central Alberta’s energy activity involves natural gas.  The discovery of effective extraction methods from huge reserves of natural gas locked in shale formations in the US and Canada has drastically increased the supply of natural gas, effectively driving down the price and creating less need for exploration, drilling and extraction.

 

Population growth – all of the above has contributed to fewer jobs and fewer people moving to central Alberta.  Lower population growth means less demand for housing.

 

World economic woes – the world economy has been languishing in the last few months as it runs out of the massive amounts of stimulus monies injected by governments and there is uncertainty about future prospects.  Consumer confidence doesn’t do well under a barrage of bad news, but consumer confidence is exactly what we need to get the economy moving again.

 

THE GOOD NEWS!  We have noticed an increased level of activity in the energy sector lately where it counts – on the roads.  We are hearing numerous stories that oil and gas companies are busy and have work for a year or more.  We are also hearing that they are having trouble finding qualified workers, which means they are probably looking beyond Alberta.  That quite likely means that people will start looking at moving back to Alberta from the other provinces which means population growth and demand for housing.

 

It won’t happen overnight and we aren’t forecasting a housing boom, but Alberta has always led the way out of Canada’s recessions and we’re likely to do it again.

 

We think there is the possibility that activity could increase in the fall, helping to stabilize the current supply and demand imbalance.  Interest rates still very low and are not predicted to go up much this fall.

 

The current environment of great supply, low prices and low interest rates makes buying a home now a very attractive proposition and we believe there is some pent up demand out there just waiting for some encouragement.

Tags: Red Deer real estate market update