The Central Alberta residential real estate market continues to be hot this summer while the rest of the country’s growth slows down.   

  

Sales activity in Red Deer, Alberta continued to trend up this month with sales of 241, a 24% percent gain over the previous year.  

  

According to the Alberta Real Estate Association or AREA, the upswing in sales this month can be attributed to a gain in new listings, which was less than 70 percent of total sales.  

  

The Bank of Canada's rapid pace of interest rates has set the stage for a 12.6% drop in home sales across Canada between March and April.   

  

“Rising lending rates will slow sales growth later this year, but tight market conditions over the past five months have left many looking for supply choices,” AREA reported.   

  

Meanwhile, Jean-Guy Turcotte, Mortgage Associate of the MA Regional Mortgage Group said Canadians should expect another interest rate hike this June.   

  

“With Canada's inflation rate hitting a 31-year high of 6.8% in April, experts are expecting the Bank of Canada to raise the key interest rate again on their upcoming announcement scheduled for June 1st,” Turcotte said.   

  

Meanwhile, Red Deer inventories rose slightly relative to levels earlier in the year but remained more than 20 percent below last year's levels and long-term trends. 

  

According to AREA, there are 511 properties in the market for May. There were 349 new listings in the city. A 16% increase from last year.   

 

With an inventory level of two months of supply, conditions in the city remain among the tightest seen in the past eight years.   

 

The detached segment of the market has been a driving force behind much of this. Because the market is so tight, detached homes have continued to rise in price, despite year-to-date gains averaging three percent.  

 

However, total residential average prices in Red Deer which is $342,779 have slid down slightly at 0.6%  

 

Meanwhile, in Sylvan Lake, the average sales for this month are 53, a 7.3% increase compared to the same month last year.   

 

The inventory has gone down 19.2% on a year-to-year comparison. According to AREA, there are 126 residential properties in the market this month with 82 new listings. The new listings are still relatively lower with a 3.5% year-to-year difference.   

 

The average price, meanwhile, which is $368,800 is 9.4% higher than last year.   

 

In Blackfalds, the number of sales this month is 44, a 7.3% increase compared to last year. The inventory, meanwhile, is 36% lower than last year with only 64 properties. There are only 43 new listings, a 23% drop from last year.   

 

Lacombe saw a sales decrease of 30% this year with only 32 properties sold. Meanwhile, inventory is 36% lower than last year with only 62 properties. There are only 38 new listings, a 24% drop from last year.  

 

While it is expected that the growth will slow down later this year due to the increasing bank rates, we still have to see that trend in Central Alberta.   

 

Potential homeowners may face higher stress test qualifying rates, which leads to a decrease in the amount they can qualify for when using traditional lenders such as banks.  

 

According to Turcotte, “the stress test is where you have to qualify for a mortgage using a higher interest rate than the rate you receive from the lender. It is either the contract rate plus 2%, or 5.25 percent, whichever is greater.”  

 

With these ongoing market conditions and changes, now more than ever it’s important that you have a real estate agent who understands the local market conditions that can serve you at the highest level to ensure that you are selling or buying the property that is best suited for you and your family.  

There’s still lots of real estate opportunities you can find in Central Alberta despite the economic changes along with the changes in the real estate market.  

If you are thinking of buying or selling a property in Central Alberta, connect to our real estate agents now