Good morning, everyone. It's June, and this year has already been quite the rollercoaster in the real estate market. There’s a lot to cover, and a lot of speculation to address. So, let's dive into the numbers and understand what they mean for you.The Central Alberta market is defying the national trend. While many hot markets in Canada are cooling off, ours is heating up. Let’s start with some serious insights to squash any rumors that aren't based on facts.
Surging Sales Prices
In Red Deer, the average sales price in May reached an impressive $400,999. Just five years ago, in May 2019, the average was $321,000. This significant increase in property values speaks volumes about the strength and demand in our market.
Declining Inventory
The number of active listings as of June 1st was just 286, compared to 764 five years ago. This drastic drop in supply is a key factor driving up prices. Fewer homes available for sale means more competition among buyers, pushing prices higher.
Increased Sales Volume
In May, 226 properties were sold, up from 121 in May 2019. This nearly doubling in sales volume further intensifies the competitive landscape, contributing to the rise in average sales prices.
Seller's Market
Currently, we have just over one month of inventory. To put this in perspective, some hot markets like West Vancouver have around ten months of inventory. Our low inventory means homes sell quickly and often for higher prices, making it a strong seller’s market.
Immigration and Housing Demand
With Canada welcoming a million new immigrants annually, housing demand is set to remain high. The National Association of Realtors predicts a shortage of 500,000 houses by 2025, though I believe this estimate is conservative. The need for new housing is critical, and we are nowhere near meeting this demand.
Future Pricing Trends
Detached houses in the $300,000 to $400,000 range are becoming rare. In the future, we might not see these price points for detached homes. A new townhouse now costs around $400,000, and building a new detached home is even more expensive. If you're waiting for prices to drop, you might miss out.
Practical Advice for Buyers and Sellers
For sellers who are also buying, it’s great news on your sale price but be mindful of your purchase price. The market is high, so it’s essential to plan carefully.Buyers should have their pre-approval letters ready. In this competitive market, being prepared can make all the difference, especially if you find yourself in a bidding war.
Final Thoughts
Don’t hesitate to reach out with questions or to chat about your real estate plans. Making informed decisions is crucial, and I’m here to help you navigate this dynamic market. Enjoy your summer, and I hope to see you around!Feel free to contact me anytime for a deeper discussion or personalized advice.
ROXANN KLEPPER403-872-4546
roxann.klepper@remax.net
