June sales in central Alberta were down compared to May in most central Alberta markets except Red Deer, which managed a slight increase.  In that time the number of active listings has experienced slight increases in some markets and slight decreases in others.

There are several big picture issues that are influencing the real estate market in Alberta, positive and negative.  On the positive side, oil prices are up again and there appears to be some good news on the pipeline front – Kinder Morgan still in progress rather than stopped completely, Enbridge’s Line 9 has received further approvals in the U.S (although there are still some regulatory hurdles) and even the long-delayed Keystone appears to be making headway.  And, for the first time in three years, Alberta experienced a positive net interprovincial population increase in the first quarter of 2018.

On the negative side, the escalating trade war between Canada and the U.S. is causing some real financial stress for some, but more importantly, anxiety and a loss of confidence on the part of many Canadians.  That loss of confidence causes people to hesitate when it comes to large decisions, one of the most important being home purchases.  We do believe the market may have bottomed out with better prospects for the balance of the year on the assumption that the trade issue doesn’t escalate further.

Our assumption that the cold and snowy March played a part in a slower real estate market may have been correct since April was busier in showing activity, new listings and sales.  Central Alberta sales were up a whopping 25% in April compared to March while the number of active listings were also up dramatically.  While weather almost certainly played a part, some increase from March to April is normal.

Another contributing factor is the improving economy.  There is no doubt that our economy runs on energy and despite all the other challenges we are facing, we are seeing the benefit of oil prices hitting almost $70US for West Texas Intermediate and the gap narrowing for our own Western Canada Select.  The additional profits from higher priced oil are funding more jobs and adding to the government’s coffers.

Increased consumer confidence is the product of a more stable economy.  That added confidence is a big contributor to increased housing market activity.  People need to feel confident to make big decisions.  Continued good news for buyers however, increased sales normally means higher prices, but higher than normal inventories in almost every central Alberta market will keep prices where they are for now.

The number of residential MLS sales in central Alberta in the first 3 months of 2018 was equal to the first 3 months of 2017.  Local markets vary, with Red Deer and Ponoka up year over year, while Sylvan Lake, Lacombe, Blackfalds, Penhold and Rocky are down.

The biggest challenge we face as realtors is the public’s assumption that economic recovery means an immediate return to increased sales and higher prices.  In fact, the real estate market recovery will lag two to three years behind this economic recovery, which is weaker and slower than past recoveries.

Further proof is that the combined median sale price of homes in eight central Alberta municipalities reached its lowest point in five years in the first quarter of 2018.  The previous low was reached two years after the last economic recovery was announced.

Overpricing is the single biggest mistake a seller can make in a market where there are far more sellers than buyers, and it leads to longer sale times, lower prices and seller frustration.  Less than 2 out of 10 homes listed on the MLS are selling each month in every central Alberta market.  The one or two that sell will be homes that are priced according to local market reality.

Sales in the first two weeks in March were down compared to the first two weeks of February in every market except Sylvan lake.  Sales were also down slightly compared to the first two weeks of February 2017 in most markets.

The number of active listings are up substantially in every market compared to last month and are also higher than last year at this time.  We attribute some of the extra listing activity to consumer confidence that the economy has turned and their desire to move after 3 years of slower markets.

It does seem busier although that hasn’t translated to hard sales yet.  A resolution to the conflict between Alberta and B.C. over the pipeline would go a long way to improving consumer confidence and market activity.

Most central Alberta markets we serve are keeping pace with last year while Red Deer is showing signs of improvement.  We can’t see it in all the numbers yet, but there is no doubt that we are feeling more  public optimism than we’ve experienced for much of the last three years.

The reasons for optimism include stable oil prices above $60US, 55,000 new jobs in Alberta in 2017 resulting in lower unemployment, and the general feeling that the recession is behind us.

The number of active listings is up in all central our Alberta markets.  More people wanting to sell in a recovering market suggests more confident consumers with a different motivation than we saw a couple of years ago when people were selling because they had to.  Now, they may be selling because they want to.  More listings will put the brakes on any price inflation they may be anticipating

We have consistently stated that the real estate market takes time to recover once the economy has turned around.  We’ve also said that it’s hard to time the market perfectly and the recovery can sneak up on you.  All of our central Alberta markets favor buyers at the moment.  Interest rates are still relatively low and future increases are possible.  It’s a great time to take advantage of low prices and ample inventories.

Sales in the first two weeks in February were up over the same period in January in most central Alberta markets.  Sales were down slightly or about the same as the first two weeks of February 2017 in most markets.

The number of active listings is up in every market compared to last month which is normal for this time of year.  Some of the listing activity is old listings that didn’t sell last year coming back on in time for spring.

It does seem busier although that hasn’t translated to hard sales yet.  A resolution to the conflict between Alberta and B.C. over the pipeline would go a long way to improving consumer confidence and market activity.