MARKET UPDATE – June 15, 2017

June 26th, 2017 by realestatelacombe

The central Alberta real estate market has been following similar trends for many years – slower in the winter, strong in the spring, a little slower in the summer and busy again in the fall.  There are some reasons for those trends.  The spring market probably has been the strongest because that’s when oil workers came home at break-up and had some extra time to look at houses and make a move before going back to work.

December and January are slow for obvious reasons – most people don’t have time to move during the Christmas season and many don’t like to move in the winter.

The last half of June and the summer months are also times when many people have other things on their minds – the end of the school year, summer holidays etc.

September, October and November can be quite busy, although rarely as busy as the spring market.

This year, the spring market has not reached levels seen when oil prices were high and the economy was booming.  We have now experienced two and a half years of low oil prices and a slower economy and it shows in the real estate market.  Sales are lower and the number of active listings is higher, which leads to softer prices.

There is evidence that the economy is turning.  Alberta is projected to lead all Canadian provinces in growth this year with GDP predicted to increase by 3%.

So, when can we expect to see a stronger real estate market?  Obviously it depends on oil prices to a large degree, but the real estate market in the last few downturns has always taken at least a year to recover.

That would mean that we could see a return to more normal sales numbers in the spring of 2018.  In the meantime, we expect to see sales and the listing count keep pace with last year and maybe even do a little better.

Again, the good news for those buying and selling in our market – sell low, buy low.  If the house you are selling goes up, the one you buy will go up as well.  Now is the time to take advantage of the large inventory of homes and the vast choices available as well as very favorable interest rates.

Real estate has always been a great investment.  It provides a place to live while growing in value and best of all, the profit at the end is realized TAX FREE!  There just isn’t a better place to put your money.

 

MARKET UPDATE – May 30, 2017

June 26th, 2017 by realestatelacombe

May sales in Lacombe were up nicely compared to April and also up a little compared to May of last year, so we are making some progress.  The number of active listings is up substantially from last year at this time.  While year to date sales are better this year compared to last, the market still favours buyers.

Sellers who are wondering why their properties aren’t selling only need to look at the 18.5% sales to listing ratio.  That means less than two out of ten properties for sale on MLS sold last month.

The price of real estate is dictated by the relationship between Supply and Demand just like the price of oil or lumber.  When there is less than two buyers for every 10 homes on the market, those buyers will naturally turn to the one that offers the most value for the money.

No amount of slick or aggressive marketing can overcome a price that is obviously too high when the property is compared with others on the market.  It is understandable that homeowners expect their property to be worth more than they paid for it, but unfortunately that isn’t always the case.  The one thing to remember is that prices in a local market are almost always relative – if you sell low, you will also buy low.

MARKET UPDATE – May 15, 2017

May 21st, 2017 by realestatelacombe

Lacombe sales in the first two weeks in May were up from the same time in April, but down compared to the first two weeks of May 2016. The number of active listings is up slightly compared to last month and well up compared to last year at this time. Overall central Alberta MLS sales are up 7.5% year over year, a sign that the market is heading in the right direction.

There have been many reports that the Alberta economy is improving after two years of recession. Several leading economic indicators are referenced in support of that theory. Oil prices have spent most of 2017 hovering over US$50, just recently dropping under that magic mark. Ramped up production in the US and Canada has increased supplies again, driving prices down. Recent news that OPEC has stated they are willing to do whatever it takes to keep prices stable has pushed the price back closer to US$50 in the last few days.

No matter what the politicians tell us, the strength of the Alberta economy is still heavily reliant on energy. There is no doubt that higher prices have increased activity in our energy sector, and more economic activity in any sector helps boost all the other sectors. But to assume that will change the housing market overnight would be a bit of a stretch.

Many people employed by the energy industry are back at work, but at reduced incomes. Energy company profits are still thin, but those still in business have become much more efficient and able to survive in the new lower price reality. It will take some time for their employees to get back on their feet and start thinking about investing money in new homes.

In the meantime, the housing market has survived based on activity by those not as affected by energy prices. Those families have an amazing opportunity to take advantage of more choice, less competition, lower prices and very low interest rates. Those with 20% down payments are in the best position to take advantage.

Buyers with less than 20% down require their mortgages to be insured and the federal government made that much more difficult with rules that require buyers to qualify at a high artificial rate as opposed to the actual rate they can borrow at.

The purpose of that program was to slow down heated markets in Toronto and Vancouver. Unfortunately the policy was applied across Canada and has had a very negative effect on markets already affected by low energy prices.

In a nutshell, the central Alberta real estate market has survived and will continue to do so. Ample supply and low demand in virtually every price range have moved prices off their highs reached in 2014. Smart buyers will take advantage now if they can. It is difficult to go against the flow and easy to think that prices may still go lower, but once those economic indicators start to turn, it is likely real estate prices aren’t too far behind.

MARKET UPDATE – APRIL 30, 2017

May 21st, 2017 by realestatelacombe

The Lacombe market has recovered nicely this year with sales in the first four months up 14% over the same time last year, although April was a little slower.  The year to date increase is in direct contrast to what is happening in some other central Alberta markets, including Red Deer where sales for the same time are down year over year.  The number of active listings is higher than it was a year ago.  The inventory increase has kept the market in well into buyer’s territory.

What does the future hold?  As tough as the last two years have been, fortunately, it is looking brighter….

The Alberta Treasury Branch summed up the last two years in Alberta this way – Many Albertans felt it. And the latest numbers confirm it. Alberta’s economy contracted another 3.8 per cent in 2016. This follows a similar decline of 3.7 per cent in 2015.  It was the second consecutive year that real gross domestic product (GDP) contracted, the last time this happened was in 1982 and 1983….

The last couple of years have been tough for Albertans and the provincial economy. But it is expected to get better in 2017. ATB is forecasting real GDP growth this year in the two to three per cent range. This represents an end to two consecutive years of recession and welcomes in an era of modest growth.

MARKET UPDATE – April 15, 2017

May 21st, 2017 by realestatelacombe

Year to date MLS sales of all types of properties in central Alberta are up 6.7% over the same period last year while residential sales in Lacombe were up 5.7%.

The Lacombe market started April almost as well as it did last year.  The number of active listings is up significantly while sales are off slightly.  The comments below from ATB suggest that the economy is on the mend and some of our laid off workers are going back on the job.  All good news, but they probably won’t start buying houses right away.  The next few months will be used to catch up, pay bills and get some stability back in their lives.  Buying a home is probably at least a few months away.

That leaves those who have maintained their jobs through the recession.  Those who are thinking about a move would be well advised to do it soon, before those laid off workers get back on their feet.  The situation couldn’t be more perfect to buy – low interest rates with the threat of increases soon, lots of good inventory and a market where supply outweighs demand all spell “opportunity”.

Excerpts from The Owl, by ATB Economics

Manufacturing getting a lift from stronger oil prices ….another in a string of indicators that suggest Alberta is shaking off the recession and heading towards better days in 2017. In February, the value of manufacturing shipments in Alberta rose to $5.7 billion, an increase of 1.4 per cent over January.

The news is even better than that. From its lowest point during the recession in January of 2016, manufacturing shipments in our province have now increased by 15 per cent. That’s not quite enough to get it back to the pre-recession highs, but it has been steadily increasing over the last 12 months.

Production is Up!  While Alberta has oil reserves, it doesn’t mean they will be produced. Massive amounts of investment, expertise, creativity and technology are needed to locate, extract, transport and sell oil. This is a risky business that is subject to complex market forces and public policy.

In addition to those challenges, Alberta is landlocked and the oil trapped in the oil sands is not as easy to extract as conventional crude—factors which put us at a disadvantage when it comes to transforming our oil resources into viable business ventures.

Despite these challenges, Alberta produced 137 per cent more oil in 2015 than it did in 1985. In 2014, Alberta’s total annual production rose above one billion barrels for the first time and reached 1.1 billion barrels (3.1 million barrels per day) in 2015. Production fell in 2016 by 17 per cent as a result of the Fort McMurray forest fires but – barring another natural disaster — should fully recover and increase again in 2017.

MARKET UPDATE – March 30, 2017

May 21st, 2017 by realestatelacombe

Lacombe sales in the first quarter of 2017 were up from the same time in 2016 by 48% (12 sales).  That is good news that supports the theory that the economy is finally turning the corner.  The price of oil has remained relatively stable and activity in the oil patch keeps picking up, so we are likely on the road to a better market as the year progresses.  We don’t anticipate price inflation any time soon though, because the real estate market always lags behind the economy, often by a year at least.

The active listing count is a little higher than it was a year ago, so there should be ample product to satisfy most buyers, and interest rates remain very low, making this the very best time to consider a purchase.

One of the reasons the Alberta housing market has survived as well as it has, in spite of what we’ve been experiencing here, is that net population losses have been minimal.  According to ATB’s The Owl, over the last five quarters of recession, we’ve suffered a net population loss of only 11,000 people.

Compare that with the 20 quarters leading up to the 4th quarter of 2015 when Alberta welcomed more than 133,000 net new people to Alberta.  So, in spite of all our recent troubles, Alberta is obviously still a great place to live.

MARKET UPDATE – March 15, 2017

March 21st, 2017 by realestatelacombe

Mid month sales in March were down a little in Red Deer when compared to last month. We would like to blame that slower market on the weather, but that wouldn’t explain why sales are even or up in our other central Alberta markets compared to this time last month.

The number of active listings is up across all of central Alberta, which is normal for this time of year, although recent optimism about the economy may have encouraged a few more sellers to test the water. Year to date sales for all of central Alberta are up 8.8% when compared to the same time last year, a sign that the market is finally turning.

Moving into the third year of an exceptionally tough economic slowdown, the market has survived remarkably well. However, buyers still have the advantage, and probably will for much of the year. Anyone that is able to buy now should give serious consideration to the fact that interest rates are predicted to rise and if the market recovers, prices will as well.

No one can identify the bottom of the market exactly, but there is some evidence we are very close. Anyone looking to take advantage should do so soon.

February Job Numbers Show Signs of Improvement, ATB Financial

Even though the job situation for thousands of Albertans is still difficult, Statistics Canada’s latest employment report shows a slight improvement in February.

Between January and February, Alberta’s labour market gained approximately 1,300 jobs. Despite shedding 18,000 part-time jobs last month, the good news for Alberta’s economy is that this decrease was offset by 19,300 full-time jobs, suggesting a generous increase in the quality of available work.

The size of Alberta’s labour force (i.e., the number of people actively working or looking for work) fell by 14,100 people in February. The decline in the labour force may indicate that those in search of work are starting to feel discouraged. That said, the drop in the size of Alberta’s labour force and the net gain to employment was enough to nudge the provincial unemployment rate down from 8.8 per cent in January to 8.3 per cent in February.

February’s job report has shown early promise and potentially set a theme of modest growth for this year. Still, employers may remain reluctant to start hiring back too many workers which suggests Alberta job seekers could experience a few more difficult months. However, with stability in various sectors and overall business confidence improving, the job market will continue to show positive progress, in moderation.

Lacombe March 2017

MARKET UPDATE – March 1, 2017

March 9th, 2017 by realestatelacombe

February sales in Lacombe were down substantially from January while the active listing count was up, keeping the market very attractive for buyers.  In spite of a slower month, year to date sales are up 25% when compared to the same time last year, and the economy seems to be turning around.  Hopefully we’ll see things continue to improve moving into the spring.

The just released ATB Economic Update states that “Alberta’s economy is emerging from the worst downturn it has experienced in three decades.  Yet even as green shoots of optimism appear, the path forward remains unclear.  The global economy continues down an uneasy road…  but, Canada’s economy is picking up momentum, especially around job growth…

After suffering two consecutive years of contraction, Alberta’s economy has turned the corner and can expect modest improvements in 2017.  The greatest improvements have come within the all-important energy sector – higher prices and pipeline approvals (though construction is not assured) have lifted confidence.  Other industries such as agriculture and tourism are showing strength, while construction, forestry and housing remain fragile.

ATB is forecasting real GDP growth of 2.2 percent this year and 2.3 per cent on 2018.

MARKET UPDATE – FEBRUARY 15, 2017

February 23rd, 2017 by realestatelacombe

February was off to a much better start than January in most of the seven central Alberta markets we track. Sales were as good or better than the first two weeks of last month. The number of active listings is up slightly in most of those markets, but not enough to be concerning.

Consumer confidence is certainly better up with oil prices staying above $50US and the news that some people are going back to work. We are seeing more oil company vehicles on the road and there is a sense that the economy is finally starting to turn. That is translating into more sales and listing activity.

The real estate market always lags behind the economy, usually by a year or two. We are at the very beginning of a recovery and we believe it’s too early to see prices moving up. If things continue to improve and the supply of homes doesn’t get too high, prices should hold where they are. The housing market is still being impacted by the mortgage rule changes that make it harder for buyers to qualify, which will temper the market somewhat.

Alberta Sees a Surge in Population – ATB Economics

The topic of immigration has been all over the news. For Alberta, immigration has helped Calgary and Edmonton become the fastest growing cities in the nation. According to 2016 census data released by Statistics Canada, Calgary remains Canada’s fastest-growing city, even amid the current economic conditions. Calgary’s metropolitan area grew 14.6 per cent between 2011 and 2016. That follows 12.6 per cent growth recorded from 2006 to 2011. Additionally, Calgary overtook Ottawa-Gatineau as Canada’s fourth-largest metro area.

Edmonton’s metropolitan area ranks as the second-fastest growing area in the nation. Alberta’s capital city grew 13.9 per cent during this census period, compared with 12.1 per cent during the last census. Trends are starting to suggest Edmonton will outgrow the rest of the province’s cities within the next five years and could become the fifth largest CMA. At 11.6 per cent, Alberta continued to have the highest growth rate of all the provinces, up from 10.8 per cent in 2011 and nearly seven per cent higher than the national average.

Statistics Canada notes that in the coming years, population growth in Canada is projected to be increasingly linked to migratory increase rather than natural increase, mainly because of low fertility and an aging population. Between 2011 and 2016, about two-thirds of Canada’s population growth was the result of migratory increases (the difference between the number of immigrants and emigrants).

The increase in immigration promises good news for Alberta, especially the construction sector. Even though Alberta’s energy industry isn’t expected to grow like it did between 2010 and 2014, increased immigration should at least keep Alberta’s homebuilders and construction companies working hard in the coming years.

Lacombe Feb 2017

January 30, 2017 – Market Update

February 16th, 2017 by realestatelacombe

Lacombe sales started the new year with a bang, a huge improvement over last year at this time.  Even though sales were much higher than last January, inventory levels are also higher than they were a year ago, keeping the market from moving any closer to balance.  More good news – January sales in all of central Alberta were up a promising 12.8% compared to January 2016.

The difference between this January and last is that the price of West Texas crude is $25US higher and because of that, there are more oil rigs working.  There’s been a US presidential election, three pipeline announcements, a provincial carbon tax enacted and federal carbon tax announcement, and all kinds of excitement on the Alberta political front.

Of course, no one can predict the future, but it seems the Alberta economy is trending in the right direction.  Some of those things that have happened over the past year will create jobs and grow the economy in the future, but not necessarily in the next few months.  The thing that may carry the economy until that growth becomes real is confidence.  Confidence is a powerful force – it encourages people to invest, to spend, to hire and grow their businesses.  All by itself, It is an engine of the economy and what we really need to carry us through.

Dawn Parent, RE/MAX REAL ESTATE CENTRAL AB.
#1, 5265-45 STREET, Lacombe, Alberta, T4L 2A2
Tel: 403-782-4301 Fax: 403-782-2285
The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Central Alberta REALTORS® Association
MLS® MLS REALTOR® Realtor
Trademarks used under license from CREA