We can expect more of the same in 2024. This means 2024 is a year to move.
We finished the year with a similar trend that was happening in 2022. 2023 saw Red Deer and the area have low inventory levels, strong sale price to listing price, and in some cases price growth. The market was also decidedly different in homes above $500,000. Most likely influenced by the higher cost of borrowing.
Fortunately, 2024 is starting with rate holds, and the immediate forecast is the Bank of Canada will hold the rate further with declines.
Did you know that in 2023 Red Deer real estate sales recorded the 4th highest sales volume of the last 10 years?
The Supply And Demand of Real Estate:
Sales volume in Red Deer and the area followed similar trends. Most communities have sales that closely follow the new listing volume. The tight supply and demand for real estate was a benefit to most sellers. Buyers were feeling the stress of finding something with time to process and evaluate being a premium commodity. 2023 saw an abundance of tenant-occupied homes for sale. The market was beneficial for quirky or tired homes, and those that generally might be a little thought to sell because of the wear & tear or needs of the home. As a result, we had many landlords that opted to change their portfolios.
2023 had softer volumes compared to 2022. The rate increases that began in 2022 slowing down the real estate market.
The Bank of Canada interest rates are:
|December 6, 2023
|October 25, 2023
|September 6, 2023
|July 12, 2023
|June 7, 2023
|April 12, 2023
|March 8, 2023
|January 25, 2023
|December 7, 2022
|October 26, 2022
|September 7, 2022
|July 13, 2022
Sales By Price Range, The Impact of Interest Rates:
The impact on interest rate increases had a notable impact on house sales above $500,000.
The seasonal flow of sales echoed the trend of 2022 but seemed to ramp up late in the season when compared to 2022. The quietest months for real estate are usually December and January. Not that moving during -20º or-30ºC is all that desirable. Throw in the fact that we all bought presents and travelled to visit friends and family for a week or two for Christmas, it's pretty easy to see that these two months are sleepy by comparison.
Knowing that lending rates have plateaued, and may decline in the spring, are you planning on buying or selling this year?
Are you still waiting for prices to drop? Stop it! Trying to "time" the market is a terrible idea. It rarely works out that way. Check this out...
The most recent low point for "average" home sale prices was April 2020 $321,104. If you put your memory banks to work, that was peak "COVID-19" closures, where no one knew what the heck was going on and if anyone would work again. Then we've had a steady climb until January 2023 when the average price dipped to $347,922.
A further reflection of interest rates and the belief that "interest rates should push prices down". Yes, they should, because it decreases buying power. However, the defining metric for if prices are strong, sliding or growing is by far "supply & demand". Until there is a shift in the supply & demand equation I wouldn't expect a large annual change in sale prices. Here is the 10-year graph for average house prices.
Despite 2 years of rising interest rates, sales have continued to happen, and the average closing price has gradually risen. Thanks in large part to supply and demand. So what doe that look like...
The solid black lines are the "sales" volume for that price range, and the gold-coloured lines are the listings that came on the market. In a nutshell, the demand for a house in Red Deer is strong.
When we look at all residential property types by community, the supply and demand ratio differs, but the demand for housing has remained strong all year. WIth the most recent interest rate announcement, holding interest rates, we expect that demand for housing in Red Deer and surrounding communities to remain quite positive until there is an economic slowdown for the area and province.
Should You wait to buy a home?
The most important factor is the affordability of monthly living. If you desire homeownership, then your day-to-day finances and rent payments or your current mortgage payments may change with your purchase. Historically Housing prices have risen. Yes, there are moments in time when house prices have fallen, but ever since I've been a home owner, and my parents have been home owners, and their parents etc. prices have gradually risen. Homeownership is a long-term investment. If you plan to live in a house for 20, 30, 40 or 50 years then what are you waiting for?
Each community in Central Alberta has benefited from the improved economy. Reviewing our slides below you'll note some similarities as well as some unique differences. See the comparisons below for January 1 - October 31st, 2023:
Red Deer led the way with sales and listings as one would expect due to the population size of the community.
The smaller communities have a tighter supply and demand ratio. This dynamic is helping to hold prices and in some cases, we're seeing stronger price growth.
Sales volume at the end of October for Red Deer was reported as 1,621. Followed by Sylvan Lake at 412, Blackfalds at 237, Lacombe at 221, Innisfail at 141 and Penhold with 83 sales ytd.
All the communities report positive trends, particularly around the average price points.
Red Deer Real Estate in 2023:
2023 has been a robust year for Red Deer's real estate market. However, the lack of options for buyers to select from due to the economy and interest rates is making it more expensive to buy a home. Nonetheless, sales volume has remained positive, with overall sales volume for Red Deer real estate only down 10% from 2022. You can see in the chart that we started the year lagging 2022, and then had a hot summer. The high sales and low inventory dynamic are usually ideal for selling tenant-occupied homes, and those homes with unique or quirky characteristics that make them hard to sell in buyers' markets.
If it's so strong, why am I seeing houses sitting on the market in my area?
The YTD average closing price for ALL property types is currently at $340,567. For Single-family detached homes, it is $411,858. Certainly, by looking at where the sales and listings are in the chart to the left, we can see that the $500,000 remains an affordability barrier. That price point and higher is a significantly quieter price point. Today’s posted interest rates of 6.5-7% are having a direct impact on higher price points. Buyers qualifying today have to qualify with the addition of a 2% points stress test. i.e. moving that qualifying rate to 8-9%.
How much is a house nowadays?
Depending on where you want to live, there are some more communities with lower pricing. Usually, a direct relation to distance from the larger centers such as Red Deer. Sylvan Lake leads the way with the highest average sale price of a house with $421,912 YTD for a home.
Welcome to the world of real estate in Red Deer, where the market is always buzzing with activity!
The graphic you're looking at shows the sales volume for Red Deer's real estate market over the last few years, and it's quite interesting to see how the numbers have fluctuated.
The sales volume has been steadily increasing since 2017, which is great news for sellers as it indicates a healthy real estate market. In fact, the sales volume in 2022 was almost double what it was in 2017, which is an impressive feat, given the challenges posed by the pandemic. This increase in sales volume could be attributed to several factors, such as low-interest rates, a growing population, and an overall healthy economy in Red Deer.
The number of unit sales in 2023 is down from 2022, but is the 4th highest in the last 10 years, and is above the 10-year average. Above average is a positive healthy indicator of the overall real estate market.
Overall, the real estate market in Red Deer seems to be in good shape, and this graphic gives you a great overview of the sales volume trends over the years. Whether you're a buyer or a seller, this information can help you make informed decisions about the real estate market in Red Deer.
The sales of higher-priced homes are always lower in unit volume. The sweet spot is the middle zone, which is a wide robust price range.
Red Deer continues to lead the way with real estate activity, due to the size of its population, and the variety of properties & property types.
WHat is significantly unique this year, is the difference in supply and demand in the smaller communities. Typically a smaller community, such as Innisfail would have a greater disparity of listings to sale. This year, there is a very little gap. Which one could interpret as being th e"hotter" community.
January 2023 brings more change into the Red Deer real estate market.
Sales this year have been lagging in comparison to the sales volume we experienced in 2022, and 2021. Definitely influenced by the mortgage rate changes of the past several months. The changes in affordability and budget levels established by mortgage rates have added some uncertainty as buyers adjust.
If you've owned a home for 15 years, or more then you've probably experienced today's 5% interest rate level and felt confident that 5% was a "good" rate. Today it is a game changer for many. Increasing from 2% to 5% has put some plans on hold and established lower purchasing power.
However, January was not ALL bad. It was actually quite strong. To add a little context, January 2022, and 2021 were well above average bench setting high marks for sales volume in January. The 10-year average for Residential Sales Volume is presently 86. So 2023, was "above average".
January is not necessarily reflective of how the rest of the year will unfold. It does tell us what the market is shaping up to look like now though. A 26% decrease in sales volume does make one pause and ponder about what the year will look like.
Sales and listing volume were considerably low at the end of 2022. The listing inventory count declined in November and December, however, bounced back to a certain extent in January. The supply and demand equation is shifting. It is important to have a close look at the pricing and volume for homes like yours, in an area where you live, otherwise, you run the risk of being "for sale" for extended periods of time.
The Red Deer real estate market remains strong and follows a seasonal trend. Despite the increases in interest rates the overall residential real estate sales volume continues to outperform previous years.
I've been fortunate to be featured online in a couple of podcasts. Here are a few links:
This week Ryan reaches out to an old colleague, Patrick Galesloot, a Realtor in Red Deer, Alberta. Industry news is on the menu for conversation, and then Patrick shares some crazy real estate stories!
In episode two of the Hello Relo podcast's Hello Local series John chats with Patrick Galesloot a third-generation real estate professional in Red Deer, Alberta. Patrick works out of the brokerage in Red Deer and comes from a family of realtors. In this episode John and Patrick discuss the ins and outs of real estate in Red Deer, the hidden gems of realty in Red Deer, how Patrick got his start in real estate, and what Patrick thinks it takes to be a successful real estate agent.
It is easily the sport in North America which has seen the most growth in people playing over the past decade or so people of all ages by the way!
Pickleball is a hybrid racquet sport and has been gaining attention right across the country. This August, Red Deer, Alberta will be ground zero as players from east to west will converge on this city of 100 K and spend five days crowning national champions.
Red Deer Pickleball Club member Patrick Galesloot joins me in this episode to talk about the who, what, when, where, why and how this massive effort will be hosted.
If you are interested in volunteering or playing, then head over to reddeerpickleball.com for more information.
Armchair Sports The Podcast is a proud member of the Alberta Podcast Network-locally grown-community supported.
I hope you're having an enjoyable summer. We've certainly had a little bit of everything for the weather again! We haven't seen the volume of rain like we experienced this June for quite some time.
IF you had a wet basement do you have to disclose that? Have to or should you? You have to disclose defects that are hidden & undiscoverable by a reasonable inspection and those that would cost a large expense to remedy (these do not have to be hidden, just expensive). If you had a wet basement because and you called insurance, they sent a contractor to clean up and fixed the cause, it is recommended you disclose the steps taken to reassure buyers that things were done properly. A clean and maintained home with repairs logged and reported will cause fewer issues after the fact compared to "they don't ask, we don't tell".
How's the Market? Are things still crazy with the interest rates? If you have these questions, you're not alone. We get asked these all the time. We're happy to answer how the local market is for your home.
Upon closer look at the Supply & Demand this year, the times are a-changing.
The local real estate market got "HOT" this year. The sales volume increased to its peak in April & May. Followed by an increase in supply, as the seller's answered the call and demand started to subside.
A number of variables influence supply & demand. Weather, the Economy, jobs and the migration of workers to fill those jobs, and interest rates. The interest rates definitely impact buying budgets.
For example, if your monthly mortgage payment budget is $2,000 a 3% mortgage rate would have given you a budget of around $420,000 for a mortgage. Today with rates near 5% that same $2,000 monthly payment affords you a $345,000 mortgage. If you've been on the fence about selling, strike now while the iron is still glowing.
If you're buying, the same is true. qualify NOW and get a rate hold for as long as the bank allows. The above scenario highlights how quickly your buying budget can change. Pricing changes are a reflection of supply & demand which react at a different pace than interest rates.
Each community in Central Alberta has benefited from the improved economy. Reviewing our slides below you'll note some similarities as well as some unique differences. See comparisons below for January 1 - June 30, 2022:
Red Deer led the way with sales and listings as one would expect due to the population size of the community
Red Deer reported 1,183 sales, and 1,652 new listings (1,183/1,652) compared to:
Affordability of housing remains highest in Innisfail with the average house price reported as $337,286.
Meanwhile, Sylvan Lake has the highest average sale price with $425,460 for a home.
I'm very appreciative to receive the Mayor's Recognition Award.
This was for volunteering with our local Pickleball Club. I love playing Pickleball, and being involved was just second nature. I, like my colleagues, was just doing our part. To be recognized at this level is... well a very pleasant surprise. A little shocking, and overwhelming to say the least. Thank You so much.
"The Mayor’s Recognition Awards recognize Red Deer individuals, groups or teams who have brought honour and recognition to Red Deer in one of five categories. Award recipients are selected by the Mayor’s Recognition Awards Committee, with the exception of the Mayor’s Special Award recipient, which is selected by the Mayor." City of Red Deer
The note on the City's website regarding our Pickleball Event... "The Pickleball Canada National Championship 2021"
Hosting a national sporting event is no small feat, but the Red Deer Pickleball Club stepped up in a big way when they hosted the Pickleball Canada National Championships in August 2021. With the newly opened 20-court facility, the Red Deer Pickleball Club welcomed hundreds of players, spectators, officials and volunteers from across the country for a successful event. Earning high praise from attendees, Pickleball Alberta and Pickleball Canada, the event was deemed an overwhelming success. With entertainment, vendors and of course lots of pickleball, there was something for everyone at this event.
I just love playing Pickleball and being involved. When I was asked to help with communications, planning, and volunteering it was a no-brainer for me. I've been a director for a few years at the club (RDPC), a volunteer referee at tournaments, a referee scheduler for tournaments, an on-court MC and match announcer, a meeting coordinator, a meeting host and many other roles. Most of all I like to play. I was lucky to be able to do that as well at Nationals and did pretty well.
Wow, thank you so much, everyone. It was a pleasant surprise to get the call advising me that I had won Bronze in the Red Deer Advocate's Best of Red Deer category for Realtors. Thank you to whoever nominated me first, and all those that followed.
Many of you are aware that we're a family real estate outfit here at Century 21 Advantage. Growing up, my mom (Margaret Anderson) was a Realtor and my stepfather (John Anderson) as well. Not only were they realtors, but like me, they owned the brokerage, and managed the office and other realtors. I'm pleased to deliver the best service I can and that I was recognized for that.
I work daily with my wife De. I also get to work with my son Parker & my daughter Kendra at the office in various capacities. Both the kids work outside the office as well as alongside De & me. This is definitely a team award.
I have to thank the Realtors that I work with here in the office and those that I had the pleasure of working alongside over the last 20 years. I've learned many great habits and traits from those around me. Thank You.
To my past clients, and those that we're currently assisting. Thank You. We're always learning, growing, and doing our best. Thank you.