Residential MLS sales in Central Alberta were up almost nine percent in April compared to March, but down 26% compared to April 2022. There are two reasons for the drop in sales over the past year – high interest rates and a lack of good inventory. There were 1,854 active residential MLS listings in central Alberta last May and there were 1,436 this May, and 252 (18%) of those had sales pending reducing the actual supply to 1,184.
Sources indicate that Alberta’s population increased by about 160,000 people last year through births, in-migration from other provinces (mostly Ontario and B.C.) and international immigration. Those people all needed a place to live, whether through home ownership or rental. As a result, the rental vacancy rate is effectively zero and landlords are raising their rents after years of high vacancy rates and low rents. When tenant’s rents go up, they naturally look to home ownership and the starter market heats up creating a surge of demand from the bottom up.
New home construction in Alberta has not kept up with the population increase because of high input costs and material and labour costs driven by shortages. Prices in the resale market will go up in spite of high interest rates driven by an imbalance in supply and demand. Eventually it will be profitable for builders to compete and supply will start to catch up with demand, but that will likely take at least a year to show up in the market.
The market under $600,000 for single family homes is extremely hot, and we finally saw an increase in activity in the 600-700k range, likely only due to the lack of inventory under 600k forcing people to move up in their price points. The market for property over 700k is still very slow, with only 3 total sales in April. Acreage activity in Red Deer County has been low but inventory is as low as I can ever recall seeing it, except for at the over $1 million price point, where there’s currently 22 active listings and 0 sales last month.
Surrounding Community Snapshot:
Current Active Listings – 44
Sales in April – 22
Likelihood to Sell – 50% (Seller’s Market)
Current Active Listings – 105
Sales in April – 48
Likelihood to Sell – 42% (Seller’s Market)
Current Active Listings – 17
Sales in April – 10
Likelihood to Sell – 61% (Seller’s Market)