The Canadian housing market has seen a stronger and faster rebound from the recession than any other segment of the economy, due in large part to enticingly low mortgage rates.
But rates this low — 5.59 per cent for a five-year fixed-rate mortgage and 2.25 per cent for a five-year variable-rate mortgage at one bank — can’t last forever, and experts are advising borrowers to prepare for higher rates within the next 12 months.
“We have to realize those are emergency interest rates,” said CIBC economist Benjamin Tal.
“Interest rates will rise — it’s just a question of time, it’s not a question of if. And if that’s the case, we have to make sure that when we borrow this money we can afford the same mortgage 200 or 300 basis points higher. That’s the key responsibility now of borrowers and lenders, to make sure that what we do, we do it in a prudent way.”
Depending on whether they are fixed or floating-rate, mortgages are tied to either the bond market or the Bank of Canada’s key lending rate, which are closely related. The central bank’s rate has been sitting at a record low of 0.25 per cent since the spring and it has said it will keep it steady until at least next June to help stimulate the ailing economy.
On Wednesday, three of Canada’s biggest banks — Royal Bank (TSX:RY), Bank of Montreal (TSX:BMO) and TD Bank (TSX:TD) — announced that they will cut posted rates for fixed-rate mortgages by up to 0.25 percentage points. On Thursday, CIBC (TSX:CM), Laurentian Bank (TSX:LB) and Scotiabank (TSX:BNS) followed suit by cutting their five-year mortgages by 0.25 per cent to 5.59 per cent, in the case of CIBC and Scotiabank, and 5.6 per cent at Laurentian.
But mortgage lenders agree that rates are nearing the bottom and will begin to rise again in 2010.
“The only sort of assurance that you hear in the marketplace is the Bank of Canada’s going to try to maintain that rate until June. But past that, there are already warnings that if there need to be adjustments, the adjustments could be a little more abrupt than we’ve been used to in the past,” said Martin Beaudry, vice-president of retail lending at ING Direct.
CIBC’s Tal said that with rates this low, “it’s almost a crime not to take a mortgage out,” but warned that consumers need to be prepared for higher interest rates later on and what this could mean for their personal finances.
For example, a $200,000 mortgage with a term of 25 years and an interest rate of 2.25 per cent has monthly payments of $876.26. For the same mortgage with an interest rate of five per cent, the monthly payments become $1,169.18.
And this doesn’t only apply to variable-rate mortgages, but to fixed-rate mortgages that are coming up for renewal, Tal said.
“It’s not just variable rates, because five years from now the rates will be much higher, so you don’t want to find yourself in a situation five years from now where you can’t afford the house,” he said.
“It’s important to be extremely prudent and not to be totally blinded by those rates.”
Thursday, December 10, 2009
Friday, September 11, 2009
New subdivision a first for the city
In what is believed to be a first for Red Deer, the city’s municipal planning commission has approved a “strata space subdivision.”
The subdivision relates to a 210-suite supportive living complex and restaurant in Oriole Park West. Slated to be called The Gardens at Hwys 2 & 11, the 6845 66th St. project is being developed by a group of joint-venture partners.
The commission heard on Tuesday that strata space subdivision was being sought so that ownership of the residential and commercial components of the building could be separated. The commercial elements would include the restaurant, a hair salon and administrative facilities, with these located on various floors of the four-storey building.
The commission was told that such “three-dimensional” subdivisions have been done in Calgary, but not in Red Deer.
Toby Lampard, one of the partners involved in the development, said previously that the residential units will consist of suites with one bedroom, two bedrooms, and one bedroom with a den. Each will have cooking facilities and a washer and dryer, with shared amenities to include an exercise room, a library area with computers, a lounge and TV rooms.
Residents will be able to access different levels of support, with staff on site 24 hours a day.
Underground and surface parking are planned, and the Perkins Restaurant & Bakery will serve both residents and members of the general public.
The units will be sold as condominiums, said Lampard. Some will be rented to tenants, he added, including under life-lease arrangements.
The commission also approved the subdivision of the land into two bareland condominium units. This will allow the project to be completed in two phases.
Lampard said the first will contain 110 units and the restaurant, with completion anticipated by the spring of 2011. The second, 100-unit phase will be added when demand warrants.
The cost of the project has been estimated at about $23 million for the first phase and $20 million for the second.
The subdivision relates to a 210-suite supportive living complex and restaurant in Oriole Park West. Slated to be called The Gardens at Hwys 2 & 11, the 6845 66th St. project is being developed by a group of joint-venture partners.
The commission heard on Tuesday that strata space subdivision was being sought so that ownership of the residential and commercial components of the building could be separated. The commercial elements would include the restaurant, a hair salon and administrative facilities, with these located on various floors of the four-storey building.
The commission was told that such “three-dimensional” subdivisions have been done in Calgary, but not in Red Deer.
Toby Lampard, one of the partners involved in the development, said previously that the residential units will consist of suites with one bedroom, two bedrooms, and one bedroom with a den. Each will have cooking facilities and a washer and dryer, with shared amenities to include an exercise room, a library area with computers, a lounge and TV rooms.
Residents will be able to access different levels of support, with staff on site 24 hours a day.
Underground and surface parking are planned, and the Perkins Restaurant & Bakery will serve both residents and members of the general public.
The units will be sold as condominiums, said Lampard. Some will be rented to tenants, he added, including under life-lease arrangements.
The commission also approved the subdivision of the land into two bareland condominium units. This will allow the project to be completed in two phases.
Lampard said the first will contain 110 units and the restaurant, with completion anticipated by the spring of 2011. The second, 100-unit phase will be added when demand warrants.
The cost of the project has been estimated at about $23 million for the first phase and $20 million for the second.
Housing stars rebound
Red Deer builders enjoyed a bigger year-over-year increase in housing starts last month than was the case in any of Alberta’s other major cities.
Canada Mortgage and Housing Corp. has reported that work on 43 single-detached homes was initiated in the city last month, up from 21 in August 2008. In the case of starts related to multi-family units, the figure last month was 20, as compared with zero the previous year.
That combined 200 per cent increase in August housing starts topped the figures for Lethbridge, which experienced a 121 per cent jump; Edmonton, which was up 32 per cent jump; and Grande Prairie, which rose 28 per cent. August housing starts in Calgary, Medicine Hat and the Regional Municipality of Wood Buffalo were all down in 2009.
CMHC market analyst Regine Durand commented last week that the Red Deer housing market was rebounding faster than her agency had previously anticipated. That prompted it to modify its forecast for local housing starts in 2009 to 430, from the 425 it was projecting as of May.
Fewer listings on the resale market and a decline in the inventory of unsold new homes were factors affecting the residential construction sector, she said.
So far this year, there have been 266 housing starts in Red Deer: 190 in the single-detached category and 76 multi-family units. That’s well behind the 392 starts accumulated to the same point in 2008, when there were 226 single-detached starts and 166 multi-family units.
Canada Mortgage and Housing Corp. has reported that work on 43 single-detached homes was initiated in the city last month, up from 21 in August 2008. In the case of starts related to multi-family units, the figure last month was 20, as compared with zero the previous year.
That combined 200 per cent increase in August housing starts topped the figures for Lethbridge, which experienced a 121 per cent jump; Edmonton, which was up 32 per cent jump; and Grande Prairie, which rose 28 per cent. August housing starts in Calgary, Medicine Hat and the Regional Municipality of Wood Buffalo were all down in 2009.
CMHC market analyst Regine Durand commented last week that the Red Deer housing market was rebounding faster than her agency had previously anticipated. That prompted it to modify its forecast for local housing starts in 2009 to 430, from the 425 it was projecting as of May.
Fewer listings on the resale market and a decline in the inventory of unsold new homes were factors affecting the residential construction sector, she said.
So far this year, there have been 266 housing starts in Red Deer: 190 in the single-detached category and 76 multi-family units. That’s well behind the 392 starts accumulated to the same point in 2008, when there were 226 single-detached starts and 166 multi-family units.
Building momentum
The declining cost of home ownership has prompted Canada Mortgage and Housing Corp. to adopt a more optimistic view of Central Alberta’s real estate market. And the national housing agency expects local home builders to be much busier next year than their counterparts elsewhere in the country.
In its housing market outlook released on Thursday, CMHC projects that 3,700 Central Alberta homes will be sold through the Multiple Listing Service in 2009. It is anticipated that this number will rise more than five per cent the following year, to 3,900.
An earlier forecast issued in May called for 3,550 MLS sales this year and 3,770 in 2010.
CMHC is also anticipating higher average prices on the local resale market: $269,000 in 2009 and $277,000 in 2010. That compares with its previous forecasts of $264,000 and $271,000 respectively.
“Typically, what we’re seeing is affordability is improving because of the drop in resale prices,” said Regine Durand, a market analyst with CMHC.
Those reduced prices, combined with lower interest rates, have made home ownership more appealing.
“Mortgage payments on average have dropped by 18 per cent from January to July,” said Durand.
“This is boosting MLS sales, and next year we are expecting to see more of that also.”
She added that the cost difference between renting and owning has decreased — narrowing 36 per cent on average from January to July, and luring many tenants into the market.
Although resale prices in Central Alberta next year are expected to increase by about the same percentage as for Alberta as a whole, sales volumes here are projected to climb five per cent, as compared with three per cent for the province.
CMHC has also modified its forecast with respect to new home construction in Red Deer.
As of May, it was projecting 425 housing starts this year and 515 in 2010. Those figures have changed to 430 and 490.
Durand said the increase for 2009 was motivated by signs the new home market is strengthening.
In July, she pointed out, residential construction starts were 16 per cent higher than in the same month of 2008. In the case of single-family starts, the year-over-year jump was 76 per cent.
“We are seeing that the market is picking up a bit faster than what we were expecting.”
One of the factors boosting this demand is fewer options on the local resale market.
“Active listings were down 14 per cent in July,” said Durand.
CMHC’s decision to reduce its 2010 housing start forecast for Red Deer by 25 units was motivated by the surplus of multi-family units still on the market.
“Inventories of singles in July were down 39 per cent, year-over-year, but we still had 111 multis in inventory, which is three times more than last year,” said Durand.
But even with the reduced forecast, Red Deer’s 2010 housing starts would be 14 per cent higher than the figure forecast for 2009, she pointed out. That’s a slightly bigger increase than the 13 per cent residential construction growth expected provincewide, and more than twice the six per cent increase CMHC has pencilled in for Canada.
The numbers are still much lower than in 2008, when there were 4,214 MLS sales in Central Alberta, with an average price of $278,000. The year before that, sales numbered 5,075 with an average selling price of $270,494.
On the construction side, 572 homes were built in Red Deer last year and a record 1,558 in 2007.
Nationally, CMHC pointed to improved resale activity and lower inventory levels in both the new- and existing-home markets as factors that should prompt builders to increase construction.
However, CIBC World Markets economist Benjamin Tal suggested that the recovery in housing starts would be much slower. He believes slower population growth and higher costs for new homes after provincial sales taxes are harmonized with the GST in provinces like Ontario and B.C. next year will soften near-term growth in new home construction.
Scotiabank economist Adrienne Warren also sees a slow recovery in new home building due to oversupply in some major markets, particularly in the condominium sector.
But Warren said the CMHC forecast is yet another sign Canada’s real estate market is on the rebound, and performing better than previously thought.
In its housing market outlook released on Thursday, CMHC projects that 3,700 Central Alberta homes will be sold through the Multiple Listing Service in 2009. It is anticipated that this number will rise more than five per cent the following year, to 3,900.
An earlier forecast issued in May called for 3,550 MLS sales this year and 3,770 in 2010.
CMHC is also anticipating higher average prices on the local resale market: $269,000 in 2009 and $277,000 in 2010. That compares with its previous forecasts of $264,000 and $271,000 respectively.
“Typically, what we’re seeing is affordability is improving because of the drop in resale prices,” said Regine Durand, a market analyst with CMHC.
Those reduced prices, combined with lower interest rates, have made home ownership more appealing.
“Mortgage payments on average have dropped by 18 per cent from January to July,” said Durand.
“This is boosting MLS sales, and next year we are expecting to see more of that also.”
She added that the cost difference between renting and owning has decreased — narrowing 36 per cent on average from January to July, and luring many tenants into the market.
Although resale prices in Central Alberta next year are expected to increase by about the same percentage as for Alberta as a whole, sales volumes here are projected to climb five per cent, as compared with three per cent for the province.
CMHC has also modified its forecast with respect to new home construction in Red Deer.
As of May, it was projecting 425 housing starts this year and 515 in 2010. Those figures have changed to 430 and 490.
Durand said the increase for 2009 was motivated by signs the new home market is strengthening.
In July, she pointed out, residential construction starts were 16 per cent higher than in the same month of 2008. In the case of single-family starts, the year-over-year jump was 76 per cent.
“We are seeing that the market is picking up a bit faster than what we were expecting.”
One of the factors boosting this demand is fewer options on the local resale market.
“Active listings were down 14 per cent in July,” said Durand.
CMHC’s decision to reduce its 2010 housing start forecast for Red Deer by 25 units was motivated by the surplus of multi-family units still on the market.
“Inventories of singles in July were down 39 per cent, year-over-year, but we still had 111 multis in inventory, which is three times more than last year,” said Durand.
But even with the reduced forecast, Red Deer’s 2010 housing starts would be 14 per cent higher than the figure forecast for 2009, she pointed out. That’s a slightly bigger increase than the 13 per cent residential construction growth expected provincewide, and more than twice the six per cent increase CMHC has pencilled in for Canada.
The numbers are still much lower than in 2008, when there were 4,214 MLS sales in Central Alberta, with an average price of $278,000. The year before that, sales numbered 5,075 with an average selling price of $270,494.
On the construction side, 572 homes were built in Red Deer last year and a record 1,558 in 2007.
Nationally, CMHC pointed to improved resale activity and lower inventory levels in both the new- and existing-home markets as factors that should prompt builders to increase construction.
However, CIBC World Markets economist Benjamin Tal suggested that the recovery in housing starts would be much slower. He believes slower population growth and higher costs for new homes after provincial sales taxes are harmonized with the GST in provinces like Ontario and B.C. next year will soften near-term growth in new home construction.
Scotiabank economist Adrienne Warren also sees a slow recovery in new home building due to oversupply in some major markets, particularly in the condominium sector.
But Warren said the CMHC forecast is yet another sign Canada’s real estate market is on the rebound, and performing better than previously thought.
Monday, July 6, 2009
Residemtial building stats show turn of tide in real estate
Midway through 2009, the cumulatiuve value of building approved by the City of Red Deer is about half of what it was at the same point in 2008.
But activity at the city's Inspections and Licensing Department last month suggests the constuction tide might be turning--at least in the case of housing.
Municippal staff issued building permits for $10.2 million in residential work in June. That's up 86% from a year ago, when the residential permit tally was $5.5 million. It marks the first month this year that the 2009 value exceeded the 2008 figure.
Providing a $2.4 million boost were 36 permits to Carolina Homes Inc. for multi-family development at 31 Jamieson Avenue.
Last June, multi-family projects contributed only $580,000 to permit tally, noted Rachelle Trepanier of Inspections and Licensing.
The residential construction jump reflects more than a few big projects, however. Trepanier said 30 permits worth a combined $4.9 million were issued for single-family homes for last month, more than double the 14 permits valued at $2 million that were recorded in June 2008.
"It seems to be picking quite a bit" confirmed Natalie Larkam, co-owner of Larkaun Homes Ltd. and president of the Central Alberta branch of the Canadian Homebuilder's Association.
Larkam said some builders might not be proceeding with homes that they struck deals on this spring.
She added that there is a good supply of residential lots in Red Deer, a situation that didn't exist in early 2008.
"We have to remember that last year was a bit slower because of the inventory issue we were having."
At $13.5 million the combined value of building permits issued last month in all categories was still behind the June 2008 total of $28.4 million.
Work on public projects including $1.2 million for interior renovation to the Red Deer Museum and Art Gallery, generated $2.8 million. That compares with $20 million in the public category in June 2008.
Permits issued last month for commercial work, which were valued at $456,000, was also down from the 2008 number of $2.8 million. As for industrial work, there was $33,000 worthof projects approved last month, a year-over-year drop from $70,000.
For the year to date, total permit values are %59.1 million, as compared with $116.9 million for the first half of 2008.
Residential approvals this year are $33.1 million, down from $63.9 million; commercial permits are up to $9.1 million, as compared with $26.2 million versus $3.9 million dollars in 2008; and public construction and renovation are up to $16.2 million, a decline from $23 million.
In 2007, $174.6 million worth of permits had been issued by the end of June. That year ended with a record $421.1 million in building approvals.
But activity at the city's Inspections and Licensing Department last month suggests the constuction tide might be turning--at least in the case of housing.
Municippal staff issued building permits for $10.2 million in residential work in June. That's up 86% from a year ago, when the residential permit tally was $5.5 million. It marks the first month this year that the 2009 value exceeded the 2008 figure.
Providing a $2.4 million boost were 36 permits to Carolina Homes Inc. for multi-family development at 31 Jamieson Avenue.
Last June, multi-family projects contributed only $580,000 to permit tally, noted Rachelle Trepanier of Inspections and Licensing.
The residential construction jump reflects more than a few big projects, however. Trepanier said 30 permits worth a combined $4.9 million were issued for single-family homes for last month, more than double the 14 permits valued at $2 million that were recorded in June 2008.
"It seems to be picking quite a bit" confirmed Natalie Larkam, co-owner of Larkaun Homes Ltd. and president of the Central Alberta branch of the Canadian Homebuilder's Association.
Larkam said some builders might not be proceeding with homes that they struck deals on this spring.
She added that there is a good supply of residential lots in Red Deer, a situation that didn't exist in early 2008.
"We have to remember that last year was a bit slower because of the inventory issue we were having."
At $13.5 million the combined value of building permits issued last month in all categories was still behind the June 2008 total of $28.4 million.
Work on public projects including $1.2 million for interior renovation to the Red Deer Museum and Art Gallery, generated $2.8 million. That compares with $20 million in the public category in June 2008.
Permits issued last month for commercial work, which were valued at $456,000, was also down from the 2008 number of $2.8 million. As for industrial work, there was $33,000 worthof projects approved last month, a year-over-year drop from $70,000.
For the year to date, total permit values are %59.1 million, as compared with $116.9 million for the first half of 2008.
Residential approvals this year are $33.1 million, down from $63.9 million; commercial permits are up to $9.1 million, as compared with $26.2 million versus $3.9 million dollars in 2008; and public construction and renovation are up to $16.2 million, a decline from $23 million.
In 2007, $174.6 million worth of permits had been issued by the end of June. That year ended with a record $421.1 million in building approvals.
Cottage market showing signs of revival
The economic downturn has not diminished people’s appetite for a piece of Sylvan Lake waterfront, says a national report issued on Thursday.
But waterfront properties, particularly those in higher price ranges, are taking longer to sell.
Royal LePage’s 2009 Recreational Property Report collected data from Realtors in resort communities across the country said the recreational market is showing signs of revival following a slowdown in the latter half of 2008 and into the winter.
“There has been some uncertainty due to the economy, but we still have an active market that is fairly comparable to last year in terms of the level of interest from buyers,” Al Hughes of Royal LePage Network Realty Corp. is quoted as saying.
He added that listed properties, particularly those in higher price ranges, are taking longer to sell.
The report said the average price of land-access property between 1,000 and 3,000 square feet on Sylvan Lake is $691,666. Water-access homes in the same size range average $1,125,000, and residential properties 1,000 square feet or smaller that are not on the water average $285,000.
Most of the sales at Sylvan Lake last year involved homes priced between $350,000 and $450,000, said Hughes. This year, he added, properties valued from $250,000 to $350,000 have been the most popular.
The Royal LePage report said waterfront properties near the Town of Sylvan Lake are popular with professionals and other high-income buyers, while less expensive homes near other lake-front communities like Jarvis Bay and Sunbreaker Cove appeal to younger families.
Hughes said the attraction of Sylvan is the fact it offers year-round activities.
“People want properties they can use in the winter,” he said, adding that for many, boat access is also very important.
Hughes noted that fewer cottages and vacation homes in Sylvan Lake are available for rent.
“People seem to be using the cottages themselves,” he said. “A lot of older cottages that were revenue properties are being torn down and the owners are putting in new homes.”
Across Canada, the average price of a standard waterfront cottage with three bedrooms and measuring 1,000 square feet in size was $370,000 to $600,000, according to the report.
These range from lower-end properties selling for $100,000 or less in the Atlantic provinces, to between $530,000 and $880,000 in British Columbia. The range in Alberta is $400,000 to $460,000.
Royal LePage’s 2009 Recreational Property Report came less than a month after Re/Max issued its own recreational property report.
The Re/Max report estimated the starting price of a three-bedroom, winterized home on a standard-sized lot on Sylvan Lake at $1,125,000. That was the third-highest figure among the more than 50 resort areas considered, with only Vernon and Lake Windermere, B.C., topping it. Both came in at $1.2 million.
But waterfront properties, particularly those in higher price ranges, are taking longer to sell.
Royal LePage’s 2009 Recreational Property Report collected data from Realtors in resort communities across the country said the recreational market is showing signs of revival following a slowdown in the latter half of 2008 and into the winter.
“There has been some uncertainty due to the economy, but we still have an active market that is fairly comparable to last year in terms of the level of interest from buyers,” Al Hughes of Royal LePage Network Realty Corp. is quoted as saying.
He added that listed properties, particularly those in higher price ranges, are taking longer to sell.
The report said the average price of land-access property between 1,000 and 3,000 square feet on Sylvan Lake is $691,666. Water-access homes in the same size range average $1,125,000, and residential properties 1,000 square feet or smaller that are not on the water average $285,000.
Most of the sales at Sylvan Lake last year involved homes priced between $350,000 and $450,000, said Hughes. This year, he added, properties valued from $250,000 to $350,000 have been the most popular.
The Royal LePage report said waterfront properties near the Town of Sylvan Lake are popular with professionals and other high-income buyers, while less expensive homes near other lake-front communities like Jarvis Bay and Sunbreaker Cove appeal to younger families.
Hughes said the attraction of Sylvan is the fact it offers year-round activities.
“People want properties they can use in the winter,” he said, adding that for many, boat access is also very important.
Hughes noted that fewer cottages and vacation homes in Sylvan Lake are available for rent.
“People seem to be using the cottages themselves,” he said. “A lot of older cottages that were revenue properties are being torn down and the owners are putting in new homes.”
Across Canada, the average price of a standard waterfront cottage with three bedrooms and measuring 1,000 square feet in size was $370,000 to $600,000, according to the report.
These range from lower-end properties selling for $100,000 or less in the Atlantic provinces, to between $530,000 and $880,000 in British Columbia. The range in Alberta is $400,000 to $460,000.
Royal LePage’s 2009 Recreational Property Report came less than a month after Re/Max issued its own recreational property report.
The Re/Max report estimated the starting price of a three-bedroom, winterized home on a standard-sized lot on Sylvan Lake at $1,125,000. That was the third-highest figure among the more than 50 resort areas considered, with only Vernon and Lake Windermere, B.C., topping it. Both came in at $1.2 million.
Market stabilizing
The past-president of the Central Alberta Realtors Association thinks residential sales activity in the last quarter is reason for optimism.
Randy Weins of Weins World Real Estate Inc. said the median prices of single-family dwellings sold in Red Deer, Lacombe, Rocky Mountain House and Sylvan Lake from April to June were all above the medians for the preceding three months.
In Red Deer, 387 single-family homes sold through the Multiple Listing Service system with a median price of $315,000. That compares with 210 sales at a median price of $305,000 in the first quarter.
In Lacombe, 41 single-family homes sold for a median price of $312,000, up from 23 sales at a median price of $289,000.
Single-family home sales in Rocky reached 30, with a median price of $284,000. That was a jump from the 20 sales and median of $280,000.
In Sylvan Lake, sales of single-family homes tallied 76, with a median selling price of $328,000. That was up from 43 sales and a median of $318,000.
Weins suggested these communities provide a good indication of what’s happening in the market.
“That’s the best bird’s-eye view, is firstly look at Red Deer and then look at Sylvan,” he said, adding that Rocky serves as a barometer for the West Country.
The median prices of single-family homes sold in Blackfalds, Innisfail, Ponoka and Stettler during the last quarter were all down from the previous three-month period.
Blackfalds had 32 sales at a median price of $271,000, as compared with 22 deals at $278,000 to start 2009.
Sales of single-family dwellings in Innisfail numbered 28 with a median price of $255,000. By contrast, there were 24 sales and a median price of $263,000 in the first quarter.
Single-family home sales in Ponoka reached 33, with a median price of $224,000. In the preceding quarter, there were 20 sales and a median price of $247,000.
In Stettler, sales numbered 21 with a median price of $220,000. There were three fewer sales in the first quarter but the median price was $254,000.
“Innisfail, Ponoka and Stettler I can understand because they’re further from the city,” said Weins of the price declines.
The economic downturn has hit small rural towns particularly hard, he explained.
Blackfalds, added Weins, experienced a big increase in home construction when the selection in Red Deer was scarce.
“Their inventory levels are still fairly high for a town of its size.”
Blackfalds also saw house prices approach, and in some cases surpass, Red Deer’s, he noted.
“There’s probably just an adjustment there.”
Although single-family home sales increased in all eight Central Alberta communities, Weins said this reflects a seasonal fluctuation.
“The fourth and the first quarters are the slowest half of the year, so you’ve got to be realistic whey you look at the numbers.”
Still, he added, the second quarter was stronger that he’d predicted. Weins forecast in January that there would be an eight per cent drop in single-family home values from the second quarter of 2008 to the same period this year. The change in the median figure turned out to be about 2 1/2 per cent.
In Red Deer, the second quarter of 2008 produced 445 single-family sales at a median price of $323,000; in Lacombe, the Q2 figures in 2008 were 55 and $313,000; in Rocky they were 29 and $291,000; in Sylvan Lake, 98 and $376,000; at Blackfalds, 43 and $312,000; in Innisfail, 37 and $275,000; in Ponoka, 26 and $254,000; and in Stettler, 29 and $215,000.
Weins thinks the Central Alberta market has stabilized.
“I don’t see prices going down any further; I don’t see them skyrocketing.
“I think we’ll have a stable market the rest of the year.”
Government stimulus packages have yet to make an impact, he added, and oil prices have strengthened, interest rates are at historic lows, mortgage money remains available and the stock market has enjoyed an extended period of stability.
One worry is the agricultural sector, he said, with government debt at the federal and provincial levels also a concern.
Randy Weins of Weins World Real Estate Inc. said the median prices of single-family dwellings sold in Red Deer, Lacombe, Rocky Mountain House and Sylvan Lake from April to June were all above the medians for the preceding three months.
In Red Deer, 387 single-family homes sold through the Multiple Listing Service system with a median price of $315,000. That compares with 210 sales at a median price of $305,000 in the first quarter.
In Lacombe, 41 single-family homes sold for a median price of $312,000, up from 23 sales at a median price of $289,000.
Single-family home sales in Rocky reached 30, with a median price of $284,000. That was a jump from the 20 sales and median of $280,000.
In Sylvan Lake, sales of single-family homes tallied 76, with a median selling price of $328,000. That was up from 43 sales and a median of $318,000.
Weins suggested these communities provide a good indication of what’s happening in the market.
“That’s the best bird’s-eye view, is firstly look at Red Deer and then look at Sylvan,” he said, adding that Rocky serves as a barometer for the West Country.
The median prices of single-family homes sold in Blackfalds, Innisfail, Ponoka and Stettler during the last quarter were all down from the previous three-month period.
Blackfalds had 32 sales at a median price of $271,000, as compared with 22 deals at $278,000 to start 2009.
Sales of single-family dwellings in Innisfail numbered 28 with a median price of $255,000. By contrast, there were 24 sales and a median price of $263,000 in the first quarter.
Single-family home sales in Ponoka reached 33, with a median price of $224,000. In the preceding quarter, there were 20 sales and a median price of $247,000.
In Stettler, sales numbered 21 with a median price of $220,000. There were three fewer sales in the first quarter but the median price was $254,000.
“Innisfail, Ponoka and Stettler I can understand because they’re further from the city,” said Weins of the price declines.
The economic downturn has hit small rural towns particularly hard, he explained.
Blackfalds, added Weins, experienced a big increase in home construction when the selection in Red Deer was scarce.
“Their inventory levels are still fairly high for a town of its size.”
Blackfalds also saw house prices approach, and in some cases surpass, Red Deer’s, he noted.
“There’s probably just an adjustment there.”
Although single-family home sales increased in all eight Central Alberta communities, Weins said this reflects a seasonal fluctuation.
“The fourth and the first quarters are the slowest half of the year, so you’ve got to be realistic whey you look at the numbers.”
Still, he added, the second quarter was stronger that he’d predicted. Weins forecast in January that there would be an eight per cent drop in single-family home values from the second quarter of 2008 to the same period this year. The change in the median figure turned out to be about 2 1/2 per cent.
In Red Deer, the second quarter of 2008 produced 445 single-family sales at a median price of $323,000; in Lacombe, the Q2 figures in 2008 were 55 and $313,000; in Rocky they were 29 and $291,000; in Sylvan Lake, 98 and $376,000; at Blackfalds, 43 and $312,000; in Innisfail, 37 and $275,000; in Ponoka, 26 and $254,000; and in Stettler, 29 and $215,000.
Weins thinks the Central Alberta market has stabilized.
“I don’t see prices going down any further; I don’t see them skyrocketing.
“I think we’ll have a stable market the rest of the year.”
Government stimulus packages have yet to make an impact, he added, and oil prices have strengthened, interest rates are at historic lows, mortgage money remains available and the stock market has enjoyed an extended period of stability.
One worry is the agricultural sector, he said, with government debt at the federal and provincial levels also a concern.
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