Buyer demand remains strong in Central Alberta, with inventory levels still sitting at record lows. Red Deer saw 189 sales in August, down only 6 units from July, while inventory creeped up by just 5 units to 355 active listings. To give some perspective on the current market, if I go back just 4 years to 2019 (which was the bottom of the market), we had 694 active listings in September with only 116 sales.
Single family homes under 500k are still the hottest market segments, heavily favouring sellers. While the market is very hot in certain price points, you have to be careful about how that information is interpreted. The higher end of the market (500k+ currently) is generally sitting in buyer’s market or balanced market territory most months. It’s a smaller percentage of the population who can afford these higher end properties, especially at current interest rates, therefore there’s less demand and competition for buyer’s as they move up into higher priced homes. Other segments of the market that have been quieter are investment properties (despite climbing rents currently, rental properties still do not cash flow at current interest rates) and “fixer upper” properties (cost of renovations, availability of trades people, and cost/availability of borrowing on lines of credit are too high to make these properties feasible for most buyers).
Calgary is currently the hottest real estate market in the country, as most of Alberta’s new residents are landing in Calgary due to a larger and more diverse job market. That job market also has more high paying jobs, therefore the volume of higher end properties selling in Calgary is drastically more than in Central Alberta. Red Deer is still too far from Calgary for most people to consider commuting daily, especially in the winter months, so we’re not catching any of that demand in Central Alberta. That being said, our markets are on average $200,000 – $250,000 cheaper for a similar home in comparison to the Calgary market right now, so from an affordability standpoint, Central Alberta can’t be beat and becomes a great option for people who can work locally or remotely.
On another positive note, the Bank of Canada held interest rates today as the economy is showing some signs of cooling and inflation is slowly but steadily coming down. This should mean that we will continue to see steady sales through the fall and winter months, as long as inventory continues to come into the market. With vacancy rates being almost 0% and rent prices continuing to rise, ownership continues to be an attractive option for people despite where interest rates are.
Surrounding Community Snapshot:
Current Active Listings – 43
Sales in August – 27
Likelihood to Sell – 63% (Seller’s Market)
Current Active Listings – 144
Sales in August – 49
Likelihood to Sell – 34% (Balanced Market)
Current Active Listings – 15
Sales in August – 9
Likelihood to Sell – 60% (Seller’s Market)