It’s getting colder in Red Deer and Central Alberta! Just last week, we had the first fall of snow for this season.

How about Red Deer’s real estate market? Let’s find out whether or not the real estate activities have cooled down, too, through this blog.

While the rest of Canada’s real estate market has started to slow down this season, Central Alberta’s real estate market saw an increase in sales on a year-to-year basis this October.

According to data provided by Alberta Real Estate Association (AREA), the sales activity in Red Deer recorded a 6.8% increase from last year with 142 sales this month. This is despite the pullbacks in sales that were experienced in the past couple of months.

One good thing to note is that while there has been a slowdown in sales this year generally, these numbers are still higher than they were in 2019 and 2020, even more than the peak we saw around 2014 to 2015. So, even though the sales activities have declined over the past year, these are within the normal levels in this decade.

In a rising interest rate climate, the real estate landscape has been affected by the attitude of buyers in this market. Buyers are now moving toward attached properties and this shifted the composition of sales activities.

“Much of the year-to-date sales growth has been driven from gains for higher density property types,” AREA reported.

Meanwhile, prices have been recorded to slightly drop compared to last year at 5.1%, with a $320,941 residential average price in Red Deer. Despite this, AREA describes this situation as relatively stable.

“Year-to-date the average price has remained relatively stable compared to last year,” AREA reported.

This drop in prices is attributed to the shift into attached properties.

“(The drop in prices) could be relative to the shift in the composition of sales, as year detached prices remain over five percent higher than last year’s levels,” AREA further explained.

The inventory has dropped well below traditional reports in October. According to AREA, with just 432 units in October, there has been a 27% decrease from last year’s inventory.

“While this is not as tight as levels seen earlier in the year, it is still lower than traditionally reported in October,” AREA reports.

Just before October ended, the Bank of Canada announced a new interest hike bringing the interest rates to 3.75%. Economists say that this isn’t the last this year and Canadians should expect more.

The continuous rate hikes are expected to cool down sales activities in Central Alberta and slow down demand. With more inventory in the market, there might some moderation in the Central Alberta housing prices in the next coming months.

Let’s talk a look at the real estate activities in other Central Alberta areas.