Central Alberta’s residential real estate sector continues to show signs of improving health.
Home sales in the region last month climbed to their highest level since last fall, with 178 Multiple Listing Service sales in Red Deer and 163 in the surrounding region. Although the total was 25 per cent lower than the 456 homes sold in April 2008, the year-over-year difference has narrowed considerably since December, when the gap was 40 per cent.
Last month’s residential sales marked a 17 per cent increase over March, and the Central Alberta Realtors Association said in a news release that even on a seasonally adjusted basis, month-to-month sales rose 2.5 per cent.
With seasonally adjusted increases of 16 per cent in January and 10 per cent in February, total gains since December have been 28 per cent, said the association.
“The bridge between buyer demand and housing supply is continuing to narrow, which helps bring stability to housing prices, said Derek Austin, president of the Central Alberta Realtors Association.
Meanwhile, new residential listings declined on a year-over-year basis for the fourth consecutive month.
The 852 units added to the MLS system in April were 14 per cent fewer than a year earlier.
That reduced the number of active listings as of the end of April to 2,271 — down 13 per cent from the same point in 2008 and the biggest drop in more than two years, according to the Central Alberta Realtors Association.
The median price of residential MLS properties sold in Central Alberta last month was $263,000, down seven per cent from the $284,0000 median last April, said the association.
In March of 2009, the median price was $260,000.
Monday, May 25, 2009
Market may yet surprise: realtor
The president of the Central Alberta Realtors Association is questioning some of the assumptions Canada Mortgage and Housing Corp. made when arriving at a pessimistic forecast for the region.
In an update of its housing market outlook released on Tuesday, CMHC projected that 3,550 homes will be sold through the Multiple Listing Service in Central Alberta in 2009, down from 4,214 in 2008. It expects that number to jump to 3,770 sales in 2010.
An earlier forecast released by the national housing agency in February said home sales in Central Alberta would reach 3,750 this year, with the number swelling to 4,000 in 2010.
Derek Austin wondered if the late arrival of spring might have made real estate activity in Central Alberta appear more depressed than it really is.
He also thinks CMHC could have underestimated the positive influences that low interest rates and government stimulus programs will have on the market as the year progresses.
“It’s taken longer for that turn-around.”
Austin pointed to the recent strengthening of energy prices as another reason the local real estate market could prove more robust than some expect.
“Oil prices are up and the guys should be going back to work when (spring) break-up ends.”
Austin believes the market is improving, and said he and other Realtors have noticed greater interest from buyers as the weather improves.
Regine Durand, a market analyst with CMHC, said the forecast in part reflects the fact that much of the local demand for homes was absorbed during the frenzied buying period leading up to 2008. She added that there has also been a decline in the number of people migrating into this region.
Rather than demand having been absorbed, Austin believes a big reason many people aren’t buying now is the tighter lending practices of banks.
“I think they’re slowly starting to turn around, but stuff that they would have just put through no problem before, they’re holding back on.”
Many people want to buy real estate, he added, but can’t get the money.
Durand also said that some people are reluctant to buy real estate following the run-up in prices in 2006 and 2007.
“There is still that buyer’s resistance, that aversion to price growth,” she suggested.
Austin disagreed.
He thinks people’s reluctance to buy has more to do with speculation that prices could come down further. With interest rates lower now than they were previously, the monthly cost of owning a home is, in many cases, actually less than it was when prices were cheaper.
CMHC also downgraded its outlook for the local residential construction sector.
It said housing starts in the city of Red Deer would number 425 this year and 515 in 2010. Last year the tally was 572.
The updated numbers are both down from CMHC’s February predictions, when it said starts would hit 550 this year and 675 in 2010.
Durand said the lower housing start estimates for Red Deer reflects the high inventory of unsold homes and an increasing gap between the price of new homes and the price of existing homes, which is pushing some buyers onto the resale market.
In an update of its housing market outlook released on Tuesday, CMHC projected that 3,550 homes will be sold through the Multiple Listing Service in Central Alberta in 2009, down from 4,214 in 2008. It expects that number to jump to 3,770 sales in 2010.
An earlier forecast released by the national housing agency in February said home sales in Central Alberta would reach 3,750 this year, with the number swelling to 4,000 in 2010.
Derek Austin wondered if the late arrival of spring might have made real estate activity in Central Alberta appear more depressed than it really is.
He also thinks CMHC could have underestimated the positive influences that low interest rates and government stimulus programs will have on the market as the year progresses.
“It’s taken longer for that turn-around.”
Austin pointed to the recent strengthening of energy prices as another reason the local real estate market could prove more robust than some expect.
“Oil prices are up and the guys should be going back to work when (spring) break-up ends.”
Austin believes the market is improving, and said he and other Realtors have noticed greater interest from buyers as the weather improves.
Regine Durand, a market analyst with CMHC, said the forecast in part reflects the fact that much of the local demand for homes was absorbed during the frenzied buying period leading up to 2008. She added that there has also been a decline in the number of people migrating into this region.
Rather than demand having been absorbed, Austin believes a big reason many people aren’t buying now is the tighter lending practices of banks.
“I think they’re slowly starting to turn around, but stuff that they would have just put through no problem before, they’re holding back on.”
Many people want to buy real estate, he added, but can’t get the money.
Durand also said that some people are reluctant to buy real estate following the run-up in prices in 2006 and 2007.
“There is still that buyer’s resistance, that aversion to price growth,” she suggested.
Austin disagreed.
He thinks people’s reluctance to buy has more to do with speculation that prices could come down further. With interest rates lower now than they were previously, the monthly cost of owning a home is, in many cases, actually less than it was when prices were cheaper.
CMHC also downgraded its outlook for the local residential construction sector.
It said housing starts in the city of Red Deer would number 425 this year and 515 in 2010. Last year the tally was 572.
The updated numbers are both down from CMHC’s February predictions, when it said starts would hit 550 this year and 675 in 2010.
Durand said the lower housing start estimates for Red Deer reflects the high inventory of unsold homes and an increasing gap between the price of new homes and the price of existing homes, which is pushing some buyers onto the resale market.
Housing slowdown expected to worsen
Canada’s national housing agency has become significantly more pessimistic about the outlook for residential real estate in Red Deer, and beyond.
A forecast issued by Canada Mortgage and Housing Corp. on Tuesday projects that housing starts in Red Deer will fall to 425 this year. That’s down nearly 26 per cent from the 572 starts recorded in 2008.
In 2007, the tally was a record 1,558.
The CMHC forecast also anticipates that the local resale market will continue to slide. It expects 3,550 home sales to be processed through the Multiple Listing Service in Central Alberta this year, which would be down almost 16 per cent from 2008, when 4,214 MLS sales occurred in the region.
The average resale price in 2009 will be $264,000, according to the forecast, which is five per cent lower than the $278,040 average in 2008.
In 2007, there were 5,075 MLS sales in Central Alberta with an average selling price of $270,494.
CMHC is anticipating improved numbers in 2010, with 515 housing starts in Red Deer and 3,770 home resales across Central Alberta. But all of the numbers are lower than those in an earlier forecast published by CMHC in February.
At that time, the agency was predicting 550 housing starts in Red Deer for 2009, and 3,750 home resales in Central Alberta at an average price of $271,000.
For 2010, CMHC was anticipating 675 housing starts in the city and 4,000 transactions on the Central Alberta resale market, with these selling for an average price of $280,000.
Regine Durand, a market analyst with CMHC, said the lower housing start estimates for Red Deer reflects the high inventory of unsold homes. She added that an “increasing gap” between the price of new homes and the price of existing homes is pushing many buyers onto the resale market.
In 2007, she said, the difference was about $25,000.
“Today, the gap between the resale price and the new price is like $105,000.”
As for CMHC’s downgraded outlook for Central Alberta’s resale market, Durand said this reflects the fact many people are reluctant to buy after the rapid run-up in prices in 2006 and 2007.
“There is still that buyer’s resistance, that aversion to price growth.”
Durand added that high sales volumes in Central Alberta from 2006 to 2008 absorbed much of the demand for homes, and the in-migration of people to the region has slowed.
CMHC expectations for the rest of province are even gloomier.
Housing starts in Alberta are forecast to hit 13,700 this year, down 53 per cent from the 29,164 starts in 2008. Next year, the number is projected to rebound somewhat to 16,200.
On the resale market, MLS sales in the province should reach 44,000 this year, with an average selling price of $322,500, said CMHC. Those deals would represent a 22 per cent decline in numbers from 2008, when 56,399 sales occurred at an average price of $352,857.
Resales in 2010 will recover to 48,000 in Alberta, says the CMHC forecast, with an average price of $329,000.
Nationally, housing starts are expected to hit 141,900 this year, down 33 per cent from 2008, when work was started on 211,056 homes.
The CMHC forecast said Alberta home builders will continue to cut production in response to a rise in the number of unsold units on the market and weak demand. In the case of multi-family construction, many projects have been cancelled, it noted.
The situation should improve next year, as the inventory of unsold units declines.
With respect to the resale market, CMHC noted that MLS transactions have been declining in Alberta since mid-2007. The slide was initially the result of rising prices, but more recently it can be attributed to economic uncertainty, a weakening job market and reduced migration into the province, said CMHC.
Concerns of homeowners that they will have trouble selling their existing property if they buy another has also created a drag, said the agency.
Improved economic conditions, and lower prices and mortgage rates should help boost the resale market later this year and into 2010.
A forecast issued by Canada Mortgage and Housing Corp. on Tuesday projects that housing starts in Red Deer will fall to 425 this year. That’s down nearly 26 per cent from the 572 starts recorded in 2008.
In 2007, the tally was a record 1,558.
The CMHC forecast also anticipates that the local resale market will continue to slide. It expects 3,550 home sales to be processed through the Multiple Listing Service in Central Alberta this year, which would be down almost 16 per cent from 2008, when 4,214 MLS sales occurred in the region.
The average resale price in 2009 will be $264,000, according to the forecast, which is five per cent lower than the $278,040 average in 2008.
In 2007, there were 5,075 MLS sales in Central Alberta with an average selling price of $270,494.
CMHC is anticipating improved numbers in 2010, with 515 housing starts in Red Deer and 3,770 home resales across Central Alberta. But all of the numbers are lower than those in an earlier forecast published by CMHC in February.
At that time, the agency was predicting 550 housing starts in Red Deer for 2009, and 3,750 home resales in Central Alberta at an average price of $271,000.
For 2010, CMHC was anticipating 675 housing starts in the city and 4,000 transactions on the Central Alberta resale market, with these selling for an average price of $280,000.
Regine Durand, a market analyst with CMHC, said the lower housing start estimates for Red Deer reflects the high inventory of unsold homes. She added that an “increasing gap” between the price of new homes and the price of existing homes is pushing many buyers onto the resale market.
In 2007, she said, the difference was about $25,000.
“Today, the gap between the resale price and the new price is like $105,000.”
As for CMHC’s downgraded outlook for Central Alberta’s resale market, Durand said this reflects the fact many people are reluctant to buy after the rapid run-up in prices in 2006 and 2007.
“There is still that buyer’s resistance, that aversion to price growth.”
Durand added that high sales volumes in Central Alberta from 2006 to 2008 absorbed much of the demand for homes, and the in-migration of people to the region has slowed.
CMHC expectations for the rest of province are even gloomier.
Housing starts in Alberta are forecast to hit 13,700 this year, down 53 per cent from the 29,164 starts in 2008. Next year, the number is projected to rebound somewhat to 16,200.
On the resale market, MLS sales in the province should reach 44,000 this year, with an average selling price of $322,500, said CMHC. Those deals would represent a 22 per cent decline in numbers from 2008, when 56,399 sales occurred at an average price of $352,857.
Resales in 2010 will recover to 48,000 in Alberta, says the CMHC forecast, with an average price of $329,000.
Nationally, housing starts are expected to hit 141,900 this year, down 33 per cent from 2008, when work was started on 211,056 homes.
The CMHC forecast said Alberta home builders will continue to cut production in response to a rise in the number of unsold units on the market and weak demand. In the case of multi-family construction, many projects have been cancelled, it noted.
The situation should improve next year, as the inventory of unsold units declines.
With respect to the resale market, CMHC noted that MLS transactions have been declining in Alberta since mid-2007. The slide was initially the result of rising prices, but more recently it can be attributed to economic uncertainty, a weakening job market and reduced migration into the province, said CMHC.
Concerns of homeowners that they will have trouble selling their existing property if they buy another has also created a drag, said the agency.
Improved economic conditions, and lower prices and mortgage rates should help boost the resale market later this year and into 2010.
Tuesday, May 19, 2009
House starts down
Housing starts in Red Deer continue to lag well behind last year’s pace, although the construction drop-off is more pronounced elsewhere in Alberta.
Canada Mortgage and Housing Corp. reported on Friday that work was started on 15 homes in the city in April, with 13 of the projects single-family homes and two of the units in multi-family buildings. A year ago the monthly tally was 27, all of which fell under the single-family category.
This 44 per cent decline in housing starts compares favourably with most other large cities.
Medicine Hat experienced an April-to-April slide of 88 per cent, while in the Calgary metropolitan area the drop was 71 per cent, in Grande Prairie and the Edmonton metropolitan area it was 65 per cent and in Lethbridge it was 59 per cent. Only the Regional Municipality of Wood Buffalo had a better month than Red Deer for year-over-year construction starts, off just two per cent from the 2008 figure.
Canada Mortgage and Housing Corp. reported on Friday that work was started on 15 homes in the city in April, with 13 of the projects single-family homes and two of the units in multi-family buildings. A year ago the monthly tally was 27, all of which fell under the single-family category.
This 44 per cent decline in housing starts compares favourably with most other large cities.
Medicine Hat experienced an April-to-April slide of 88 per cent, while in the Calgary metropolitan area the drop was 71 per cent, in Grande Prairie and the Edmonton metropolitan area it was 65 per cent and in Lethbridge it was 59 per cent. Only the Regional Municipality of Wood Buffalo had a better month than Red Deer for year-over-year construction starts, off just two per cent from the 2008 figure.
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