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!

The Red Deer market is behaving the way we would expect considering current economic conditions in Alberta.  Sales are down slightly in the first two weeks of April when compared to the same period last year.  The number of active listings is up again compared to last month and much higher than they were a year ago.  The vast majority of the increase in active listings since last year comes in the $250,000 – $350,000 price range, creating an incredible opportunity for first time buyers.

The overall central Alberta market is also behaving the way we would expect.  Sales are generally slightly lower and the listing count is higher, creating an imbalance and finally an advantage for buyers.  And it appears that buyers are taking advantage based on the number of pending sales at the middle of the month.

There is no question this is the right time to be looking to purchase your first home or make a move up.  The stars of low interest rates, many homes to choose from and a stable price environment are lining up to create an exceptional opportunity.  Those who wait for the exact bottom of the market may wistfully look back at this time and wonder why they didn’t see the opportunity.

Employment surges higher in March – Todd Hirsch, ATB Economics

Had this morning’s jobs report come one week earlier, it would clearly have appeared to be an April Fool’s Day joke, especially given the province’s current economic woes. But according to the latest Labour Force Survey, a whopping 19,000 jobs were added in March—the highest monthly advance in employment in over two years.

With the gain in employment, the province’s unemployment rate plunged from 7.9 per cent in February down to 7.1 per cent in March—matching the national average for the month.

The news gets even better—and more surprising. Of the 18,900 new jobs, the vast majority of them (14,500) were full-time positions. And the sector that had been losing thousands of positions—the resource sector—actually eked out a small gain in total employment for the month. The only sector that continued to suffer major job losses was manufacturing (-7,900).

It is difficult to explain the surprising advance in Alberta’s job market, particularly since there has been nothing else to suggest that the economy is showing signs of recovery. The only way to understand the data is to remember that the jobs report is survey research—it provides only an estimate. From month to month those estimates may undershoot or overshoot, and it’s dangerous to read too much into one single month. Taking a longer time perspective, Alberta’s job market is less surprising—fewer people are working than a year ago, especially in oil and gas.

Today’s job report was encouraging, but it’s still far too soon to call the downturn over.

Market Update- Red Deer sales in March didn’t keep pace with last year, but were up from February and, April sales are off to a good start.  As usual at this time of year, the number of active listings is up from last month.  In spite of lower sales and higher inventories, the market is just into buyer’s territory.  There haven’t been many times in the past few years where the buyer has had the advantage and with the extra punch provided by low interest rates along with more choices, it truly is a great time to buy.

No one can predict where the bottom of a price cycle is exactly, but some firming of oil prices recently could be an indication that the bottom is not far off.  Smart buyers move when others are still trying to decide what to do.

Unfortunately, the media is currently very focused on Alberta’ embattled energy industry while we know that other economic drivers in the province are doing quite well.  Agriculture is one that continues to have a large impact on the central Alberta economy. According to a recent article by ATB economist Nick Ford, “The latest revenue and expense data on farms reveal a resistant and formidable sector that some Albertans may forget about.  And yet without our province’s agriculture sector, it’s likely the blow of low energy prices would be felt more.”

Red Deer – Sales in the first half of March are a little slower than last year although the pending sales count suggests that the month could end up within a reasonable distance of last year.  Sales activity is strongest in the $250,000 – $350,000 range but quite resilient in the higher price ranges as well.

The active listing count has climbed a little quicker than last year and as a matter of fact is higher than it was at any time last year.  The higher number of active listings will likely remain above average until things start to return to normal.  A high listing count relative to lower demand creates a buyer’s market.

The real estate market has three modes – seller’s market, buyer’s market and balanced market.  The nature of real estate markets is that they rise and fall, in tune with the economy.  Central Alberta has experienced a balanced or seller’s market almost continuously since 2012.  Now buyers will have the advantage for a time until the economy (oil prices) recover a little.

The only people that lose in a buyer’s market are those that sell and don’t buy again in the same market.  In fact, those people only lose if they are moving to a seller’s market.  If the house you are selling goes down in value, the one you buy to replace it will have also gone down in value.

The real winners in a buyer’s market are first time buyers – more choice, stable prices and low interest rates are a rare combination that shouldn’t be ignored.

A small piece of good news broke on March 15 in regard to the Alberta economy.  A portion of an article from the Calgary Herald appears below that states that the provincial government is hinting that the small business tax may be reduced in the upcoming budget.  That would leave employers with a little more money for wages and expansion and certainly help the local economy.

Premier hints small business tax may be cut in April 14 budget, Calgary Herald, Mar. 15, 2016

Alberta small businesses could get a break in the April 14 budget in the form of a one percentage point tax cut, Premier Rachel Notley hinted Tuesday.

Notley told reporters her NDP government is looking seriously at cutting the tax from three per cent to two per cent as urged by business leaders in an open letter this week.  “On the issue of the small business tax, I would say that we simply all stay tuned for the budget,” Notley told reporters after making a speech to rural politicians in Edmonton.

The premier said her government has been meeting with business leaders and stakeholders across the province on how best to stimulate economic activity and the reduction of the small business tax has been raised. “There’s no question that’s one of the issues that has been presented to us and we’re considering a whole package of issues which will be announced in the budget,” Notley added.

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.

Market Update- Red Deer sales in February kept pace with the same period in 2015 and the pending sales count confirms there is still lots of activity in the Red Deer market.  It’s interesting to note that there are sales pending across the price spectrum, with 2 sales pending on homes listed for more than $1,000,000.  That suggests confidence in the Red Deer market.  The small worry is that the active listing count is much higher than last year at this time.

Sales across central Alberta so far this year appear to be about average when compared with the last five years.  The ATB article below does provide a partial explanation.  While it does discuss Calgary and Edmonton, central Alberta certainly will be experiencing similar gains.  It seems that “bad” in Alberta is just normal in the rest of the country and we are still an attractive destination for people looking for opportunity.

There are other reasons why the market is still behaving relatively normally.  Energy accounts for about 25% of Alberta’s economy compared to 35% a couple of decades ago.  Some of the rest of the economy outside of energy is benefitting from low energy prices.  Some of it is benefitting from the low Canadian dollar.   And some is just behaving normally, not affected by low energy prices at all.  We don’t want to minimize the pain energy companies and their employees are experiencing, but constantly dwelling on the negative does not help them, or us.  Alberta is and always will be in the future a terrific place to live, grow and invest.

Population Growth Still Strong, Rob Roach • Director of Insight, ATB Financial

The latest population estimates from Statistics Canada show that Alberta’s two large metros grew by more than 65,000 people between July 1, 2014 and June 30, 2015. At 2.4 per cent, Calgary and Edmonton tied for second spot on the list of fastest growing Census Metropolitan Areas (CMAs) in the country.

Average growth across all CMAs was 1.2 per cent. Thunder Bay, Peterborough, Saguenay, Sudbury, and Saint John are the five CMAs that saw a reduction in population.

The economic slump has slowed the inflow of both international and interprovincial migrants to Edmonton and Calgary. As a result, their growth rates are down from the previous year. Growth in 2013-14 was 3.5 per cent in both.

Taking a longer view, Calgary and Edmonton have grown by 47.2 per cent and 41.7 per cent since 2001—the fastest growth rates in the country. This translates into 462,000 new Calgarians and 401,000 new Edmontonians over that last decade and a half.

In terms of overall size, Calgary and Edmonton are the fourth and fifth largest CMAs in the country, respectively, and are two of Canada’s six CMAs with populations over one million. With the economic slump continuing into 2016, growth in the two cities will likely continue to slow but still remain among the strongest in the country.

Market Update- Some central Alberta real estate markets are behaving like we would expect in current economic circumstances and some have surprised us.  Past economic downturns have generated markets with slower sales and higher listing inventories.  The change in unit sales from 2014 to 2015 was -27% in Sylvan, -36% in Rocky, -25% in Ponoka, -26% in Lacombe, -17% in Red Deer and +1% in Penhold.  Those changes take us back to 2012 & 2013 sales levels.

The surprise comes in the number of active listings. Sylvan Lake, Lacombe, Ponoka, Rocky and Penhold listing counts are only slightly higher than last year at this time, while Red Deer and Blackfalds have higher than normal counts, but not high enough to be a large concern at this point.  Ultimately the relationship between Supply and Demand determines where prices will go and if the number of active listings remains stable, prices are unlikely to fluctuate much.

Is it a good time to buy or sell? That depends on your individual situation.  Every market and every price range inside those markets offer different opportunities.  Smart consumers make their buying and selling decisions based on current market information specifically tailored to their situation by their local RE/MAX real estate central alberta office – where you’ll find “local” experts.

Market Update– Red Deer sales maintained a good pace starting out the new year, actually a little higher than the same period in 2014.  The pending sales count indicates that we could finish up the month as almost strong as last year too.  The number of active listings is considerably higher than it was last January and is a bit of a concern.  An over-supply puts downward pressure on prices.

A bigger concern is that consumer confidence may be hurt by the constant barrage of tales of doom from the media – thousands of jobs lost in the energy industry etc.  Truth is, many of the jobs lost in Alberta were in Fort McMurray and it’s likely a lot of those people were commuting to work from all over Canada.  Their paychecks went home with them and the only contribution they made to the Alberta economy was the work they produced.  We used to hear that there were 70,000 jobs unfilled in Alberta.  Even if a lot of those jobs were energy related, some of them weren’t and have been undoubtedly filled as a result of the slack in the energy industry.  While we are cognizant of the fact that people in central Alberta have lost jobs and potentially more could, we also believe that the media is only focused on the negative and that there is much positive out there if we just look for it.  The Alberta Treasury Branch’s Alberta Economic Outlook for the first quarter of 2016 offers a realistic look at what we may experience over the next 18 months.  If offers hope that things will slowly begin to turn around in the middle of this year and slowly get better from there.  The summary of the report is as follows:

Downturns are not unusual in Alberta’s economy, which remains closely tied to the price of energy resources.  A steep drop in oil prices in 2014 – which continued and accelerated in 2015 – led to a contraction in Alberta’s GDP of about one percent last year.  Unfortunately, early 2016 holds little promise of a quick rebound.  Excess global supply form OPEC producers, coupled with uncertainty in China, Europe and the Middle East, continues to weigh on oil prices.  This has led to even greater stress on the balance sheets of the province’s energy producers as they struggle to reduce costs.  Natural gas prices continue mostly unchanged in a price range unsupportive of new investment or production.

                The strains in the oil patch are also weighing down industries peripheral to petroleum extraction, particularly manufacturing and construction.  As well, weaker consumer sentiment has resulted in reduced retail trade and residential housing construction.  All of this has resulted in an overall deterioration in the job market.

                As always, though, there remain pockets of optimism.  Agriculture, forestry, tourism – which are the province’s other major industries – continue to perform well.  Prospects for 2016 are positive, particularly with the weak Canadian dollar making commodity exports more attractive, and encouraging more U.S. tourism.

                The Economics and Research team at ATB Financial is estimating a GDP contraction of 1 percent in 2015, with a smaller contraction 0.5 percent in 2016.  Most of the economic stress on the economy and labour market are expected in the first half of the year.  Stability and even some return to modest growth is still anticipated by the end of the year.

Market Update- Red Deer sales were lower again in December, finally pulling the market into Buyer’s territory after many months when Seller’s had the advantage. The total number of active listing is back down to levels we saw last February and March. Total sales for the year are down 16.7% from 2014 but on par with or better than 2009, 2010, 2011, 2012, and only slightly lower than 2013. All that translates into a pretty normal year when considering the long term.

So, while things look a little grim based on the last quarter, the real estate market in 2015 was more robust than the media would have you believe. The truth is, Alberta’s population still grew in 2015 and there were still jobs created here. They weren’t the high paying jobs the energy industry used to generate, but certainly eased the pain a little. In the meantime, other Alberta industries benefitted from the low Canadian dollar and low energy costs. Transportation companies, airlines, logging, tourism and the public in general were all beneficiaries of low energy costs.

Unlike 2008, the rest of the world economy is moving along fairly well. There is no doubt that there will be some pain in Alberta from our current situation, but it would be foolish to assume that the sky is falling. As always, we will survive and come our stronger and better equipped to manage the next one.

The Red Deer market continues to behave quite normally for this time of year.  Typically sales slow down and the number of active listings go down as well.  Our sales are down only slightly in the first two weeks of December compared to the same period last year while the number of active listings is down from last month, but still quite a bit higher than a year ago at this time.  The current ratio of sales to listings suggests we are now in a “Buyer’s Market”.  It’s time for the other half of the real estate market to have the advantage.

There are two things that we believe are currently contributing to our market.  The first is interest rates.  Today’s low rates make it much easier for those making payments to keep ahead, and for those looking to buy their first home or move up.  There are people not employed in the energy industry that now have an opportunity to take advantage of a bit slower market and those fantastic interest rates.

The second is laid out in the ATB article below.  There have been many times in the past few years when headlines lamented the shortage of workers in Alberta and the high number of unfilled jobs.  It appears that there is a silver lining in every cloud and at least for a little while until oil prices rise, there will be some happy employers in Alberta that can fill their need for workers.

 Employers finding it easier to fill jobs, Todd Hirsch, Chief Economist, Alberta Treasury Branch

The number of unfilled work positions in Alberta fell to 1.6 per cent in August, the lowest level it’s been since 2011 when Statistics Canada started tracking it. It’s also at the level of the national average, making Alberta’s labour market appear to be much more ordinary than it was even a year ago.

For the second quarter of 2015, Statistics Canada reported this morning that Alberta’s job vacancy rate was 3.4 per cent. (The quarterly jobless rate is always higher than the monthly rate because over a three-month period, there are going to be more jobs vacant at some point than during only one month.) That tied us with New Brunswick for the highest in the country.

According to the release this morning, “the job vacancy rate refers to the share of jobs that are unfilled out of all payroll jobs available. It represents the number of job vacancies expressed as a percentage of labour demand; that is, the sum of all occupied and vacant jobs.”

The higher levels of job vacancy in Alberta over the last several years illustrates how tight the labour market was then—and the difficulty that some employers had filling jobs. In this respect, today’s lower job vacancy rate is beneficial to companies because it’s now easier to find qualified applicants.

But the job vacancy rate isn’t low everywhere in Alberta. Canada’s highest job vacancy rate in the second quarter was in Banff–Jasper–Rocky Mountain House, a clear reflection of the great year the tourism industry is enjoying.