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Greg Martens 403-391-8849

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Posts Tagged ‘Red Deer Real Estate’

MARKET UPDATE – January 15, 2018

Monday, January 22nd, 2018

Sales were lower in most central Alberta markets in the first two weeks of January compared to December, probably, as a result of extra activity in December caused by the mortgage rule changes. Sales were on par with the first two weeks of January 2017 in most markets, but up significantly in Red Deer.  Hopefully that is an indication that the market is indeed turning.  The active listing count is still higher than normal which will keep prices stable for now.

MARKET UPDATE – December 15, 2017

Friday, December 22nd, 2017

MARKET UPDATE – December 1, 2017

Friday, December 22nd, 2017

Sales in Red Deer in November were down compared to October’s and the early onset of winter may have been at least partially to blame.  Sales are off slightly compared to last November, while the number of active listings remains considerably higher, keeping buyers in the driver’s seat.   According to the Alberta Treasury Branch there are signs that the economy is gradually improving and we are hopeful that will translate into a more active market in 2018.

The key findings of ATB’s latest Economic Outlook are:

  • Alberta has emerged from two years of recession with real GDP growth of around four per cent in 2017.  ATB Financial’s Economics team is forecasting real GDP growth of 2.7 and 2.2 per cent in 2018 and 2019, respectively.
  • Retail and housing sector performance has improved.
  • Oil prices have steadied, and have begun to inch higher (currently around $US 55 per barrel).
  • Alberta’s energy sector will grow this year.
  • Tourism, agriculture and agri-food will continue to show steady growth.
  • Net out-migration to other provinces is likely to taper off but continue at a slower rate next year.
  • Alberta is expected to see a stubbornly high unemployment rate in 2017 and 2018.

MARKET UPDATE – November 15, 2017

Tuesday, November 21st, 2017

MARKET UPDATE – October 15, 2017

Thursday, October 19th, 2017

It appears that the first half of October was a little better than the same time in September. In most of our markets, the active listing count is down quite a bit from September which is also encouraging. It is almost certain that the continued tightening of mortgage qualifying requirements is a large contributor to a little slower market.

It would be irresponsible to tell our sellers that the market is going to improve much over the winter. While spring is likely going to be a little better, it would also be irresponsible to tell our sellers that prices are going to recover back to 2014 levels next spring. That is simply not going to happen and it would be wrong to give false hope.

The bottom line is that it will likely take two or three years for prices to appreciate significantly unless something of an economic miracle happens.

MARKET UPDATE – October 1, 2017

Friday, October 6th, 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.

MARKET UPDATE – August 30, 2017

Thursday, September 14th, 2017

August sales in Red Deer hit the highest single monthly total so far this year, while the number of active listings fell slightly compared to last month, bringing the market close to balance.  Sales across central Alberta were also better in August, bringing year to date sales in line with the same period last year.

One month doesn’t make a market, but the improvement certainly suggests we are turning the corner.  There haven’t been any highly visible events that point to the change, but strong GDP growth in both the Canadian and Alberta economies suggest there is potential for continued recovery.  Unfortunately, a strong Canadian economy may cause another bump in the Bank of Canada rate which will trigger another jump in mortgage rates.  Tougher mortgage qualifying requirements imposed by the federal government combined with a rate increase would be detrimental to our fragile housing market recovery.

Oil prices remain subdued, moving up and down just under the $50US benchmark, but seem to be just sufficient to keep activity up in the energy sector.  Capital investment budgets in that sector are likely to be trimmed a little going into fall and winter and only the most cost efficient projects are moving ahead.  We are cautiously optimistic.

MARKET UPDATE – August 15, 2017

Wednesday, August 23rd, 2017

Sales in the first two weeks of August were up compared to the same time in July in half our markets and down in the other half.  Active listing counts are also up in some markets and down in others.  There are certainly signs that the market may be improving, but it will likely be a slow process and it’s unlikely there will be any price stability until supply and demand move closer to balance.  I expect that will happen by next spring as long as oil prices stay stable.

MARKET UPDATE – July 30, 2017

Wednesday, August 23rd, 2017

Sales in Red Deer in July fell slightly when compared to June while the number of active listings continued to rise.  The market remains in buyer’s territory, while year to date sales are down 14.7% when compared to the same period in 2016.

Some price ranges in the Red Deer market are doing better than others.  The supply/demand ratio in the $200,000 to $300,000 price range is close to balance and most advantageous for sellers at the moment.  Activity in the $100,000 – $200,000 price range also picked up substantially last month and may be the first sign of a resurgence.

There is good news!  The Canadian dollar has gained quite a bit of ground against the US dollar in the past few months and oil prices briefly broke the $50 US barrier this week.  The Canadian economy is performing very well and most reports indicate that the Alberta economy has turned the corner.  Business optimism is up and the future is definitely looking brighter.

While we don’t expect a quick improvement in the central Alberta market from a seller’s perspective, we do see things gradually picking up moving into next spring.  This summer and fall may be the best opportunity buyers will have from a price, choice and interest rate perspective before the advantage starts to turn back to sellers.

MARKET UPDATE – July 15, 2017

Thursday, July 27th, 2017

STATISTICS FOR CENTRAL ALBERTA

INTEREST RATE CHANGES:

The Bank of Canada announced on July 12th, 2017 that it was raising its trend-setting overnight lending rate from 0.5% to 0.75%. The increase partially unwinds the half-percentage point by which the Bank dropped interest rates in early 2015 following the sudden drop in oil prices in late 2014.

When announcing that it was raising rates for the first time in seven years, the Bank recognized that Canadian economic growth has recently been coming in stronger than it had previously predicted and broadly based.

The Bank suggested future rate hikes will depend on whether economic growth continues to broaden and become more sustainable, whether soft readings on inflation prove to be temporary, and whether exports and business investment improve.

Even under these conditions, the Bank said it remains wary about risks to the Canadian economic outlook posed by protectionist U.S. trade policy and high Canadian household indebtedness. That means the Bank will be cautious about further raising interest rates.

As of July 12th, 2017, the Benchmark five-year lending rate used to stress-test mortgage applications stood at 4.64 per cent, which is unchanged from both the previous Bank rate announcement on May 24th and from one year earlier. That said, Canada’s major chartered banks have recently raised advertised five-year fixed mortgage interest rates by one-fifth of a percent to 2.84 percent – which translates into an increase of $50 per month on a $500,000 mortgage loan ($60 of per month on a $600,000 mortgage loan, etc.).

The next interest rate announcement will be on September 6th, 2017. The next release of the Monetary Policy Report, which will update the Bank’s economic forecast, will be on October 25th, 2017.

 


Greg Martens, RE/MAX Real Estate Central Alberta
4440-49 Ave, Red Deer, Alberta, T4N 3W6
Tel: 403-391-8849 Cell: 403-391-8849 Fax: 403-340-3085
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