In February 2022, the housing market in Central Alberta is on fire as a seller’s market.    

Based on a year-over-year comparison, sales of residential properties, including single-family, half-duplex, townhouse, and condo-style properties continue to be soaring while demand is limited.  

Red Deer 

According to the data by Alberta One Realty Listing Services Inc., in Red Deer alone, the number of sales has gone 29% up, from 136 (February 2021) to 175 (February 2022).  Meanwhile, the number of houses on the market is 12% down from 487 to 429. 

Median prices, meantime, is almost stable with only 0.71% percent decrease from $323,000 in February last year to $320,700 in February 2022.  

The Cumulative Days on Market (CDOM) edged up 55% from 27 last year to 42 this year.  

This market situation makes it perfect for buyers to negotiate their best deals because sellers are more flexible about the offers they’re willing to accept. You can be of help to these sellers who are hoping to sell their properties sooner. 

Sellers need not fret, on the other hand. A higher CDOM doesn’t necessarily mean there’s something wrong with your property. There could be a lot of factors that can be attributed to this beyond a seller’s fault. For one, there are instances when a former prospective buyer wasn’t able to follow through on the contract.   

Sylvan Lake  

In Sylvan Lake, lakefront properties are selling like hotcakes.   

On a year-over-year comparison, sales are up 28%, with 41 houses sold in February this year compared to 32 of the same month last year.   

The inventory, meanwhile, is depleted and cannot keep up with demand. This year, the number of residential properties in the market has dropped to 96 from last year’s 123, which is a 21% decrease. Lower inventory means it’s a good time for sellers because buyers are competing over fewer homes.  

Sellers also benefit from the quick pace of selling residential properties in this area. Last year, the CDOM is 59, but this year, it’s gone 64% down to 21.  

There is a slight drop in median prices at 9%, from $373,500 in February last year to this year’s $340,230.  This price, however, is still 26% higher than the $269,000 median price in February 2020.  

Blackfalds, Lacombe, Rocky Mountain House 

 

In Blackfalds, there has been a steady number of sales, with only a 4% decrease from last year’s 25 to this year's 24. The number of active listings has dropped 13% from 74 to 64 on a year-over-year comparison. 

On the other hand, in Lacombe, sales have gone up to 63%, from last year’s 16 to this year’s 26. The houses on the market have also been depleting, with a 20% drop, from 101 in February 2021 to 80 in February 2022.  

A similar case is noted in Rocky Mountain House with a 50% increase in sales, from last year’s 10 to this year’s 15 and a 25% decrease in active listings, from last year’s 76 to this year’s 57.  

Generally, the limited housing supply and strong demand will most likely keep a strong seller’s market in Central Alberta.  

Increase in interest rate 

 

The Bank of Canada (BOC) just increased their rate by 0.25%. This is attributed to the economy’s recovery from the impact of COVID-19 and the rising inflation rate.  

While this might sound alarming, Jean-Guy Turcotte, Mortgage Associate at Regional Mortgage Group, says there is no need for panic as it is only a slight increase BOC uses to marginally slow price growth this year. 

Increase in interest rates slows down demand for property, thus, steadying prices.  

“The 0.25% increase will affect your monthly payments by $12/month per $100,000 of borrowing. For the average Albertan, their mortgage is approximately $300,000, this will increase your payment by only $36/month,” Turcotte explained.  
 
Between the fixed-rate or adjustable-rate mortgage, Turcotte recommends that it is the client’s best interest to remain in adjustable-rate if their discount is healthy. However, he further suggested consulting your mortgage broker to assess what’s best for you.  

“Everyone has their own financial fingerprint, so your decision will be different than your friends," he said. 

 

What now? 

 

With these changes, the real estate market in Central Alberta is definitely looking to be more stabilized.  

We're still in the first quarter, and while there are some economic challenges, we can still see that this year is off to a great start. With the weather warming soon, we are optimistic that the market gets moving again. 

If you are thinking you might be ready to move to a new home soon, my advice is to get yourself the perfect agent that will help you find the best deals for you. Contact us so we can talk about this further.  

On the other hand, if you’re thinking of selling your home, it’s best that you list your property now that the properties on the market aren’t that high in number. Contact us now so we can talk about how we can help you better or you may click here to know for free the value of your home.