It’s always important to understand what is happening in the Real Estate market, your house is part of that area’s housing market. It’s important to know if prices are increase or if there is a shortage of inventory because it in one way or another effects the value of your home. There are four major stats that I am going to go over. Number of sales, average sale, price, months of inventory, and days on market. Below are 4 graphs showing the past 3 months compared to September, October and November of the previous 5 years.
The Raw Numbers
Number of Sales Analysis
Average fall sales per month over the past 5 years is just over 200 sales a month with November typically being the lowest around an average of 171. This past November, we are sitting at 184 sales. Which is right around where we could expect to be for this time of the year.
Average Sale Price Analysis
Since November 2018 average sale, price has increased by about 9% from $307,000 to $334,000. That is a good increase in only five years time for all your homeowners out there. With that being said if we look 10 years ago the average sale price in November 2013 in central Alberta was 308,000 and 193 sales.Typically in central Alberta, we see anywhere between a 30 and $40,000 fluctuation in average sale price between the winter months and the peak summer months of June, July and August. This is by far the highest average we’ve seen over the past 10 years for this time of the year, so there’s no doubt that prices are increasing, and that is due to a lack of inventory.
Months of Inventory analysis
Let’s first explain months of inventory, say the months of inventory are five months. What that means is if you were to not at any more houses under the market in five months, there would be no more houses on the market. This stat helps us gauge whether we in Balance market a buyers market or a sellers market. A balance market is typically about five months of inventory. A sellers market is anything under three months of inventory and right now we’re sitting between 2 to 3 months of inventory so we’re definitely in a sellers market and we have been for quite some Time.
Now we’ve heard no shortage of news regarding the housing crisis throughout Canada and it affects everywhere and so we are seeing the effects of that in central Alberta.Central, Alberta is one of the most affordable places to live, and people know that now. Without having a firm stat, I know that there are a large amount of out of province buyers mostly from Ontario and British Columbia relocating to central Alberta because they can actually afford to buy a house here.
Days on market analysis
We can see the competitiveness of the market, reflect the number in days on market. Because there’s a shortage inventory, buyers have to put in competitive offers in order to get the homes that they want.
Now, the one thing I haven’t talked about much is interest rates, and if you haven’t heard yet, they’re high, and the thing that I have found really fascinating through this challenging season of high interest rates is that the number of sales in central Alberta has stayed consistent or increased depending on which month you were looking at.You would think that a high interest rates would back off buyers, however, because of our prices, and the high demand of houses needed for Canadians, houses are still selling.
As of December 6th, the Bank of Canada has decided to maintain the current rate. Based on different conversation I have had with other agents and mortgage specialist, we can expect to see rates hold until Spring of 2024 before we see any sort of decress.
Ultimately, we need more affordable houses built not only in central Alberta, but across Canada. A lot of new construction sits around the $450,000 mark for fully detached home which is out of the price range for a lot of buyers.So I’ve heard some good rumours that Red Deer is going to be taking some initiative to offering some different changes for affordable housing options, however, I’m not gonna say anything until I know that is true.
So, in summary, amount of sales is consistent with the yearly average, prices have increased, inventory is quite low and houses are selling quicker than average.
What does this mean for you? If you’re considering selling your home, or investment property, now is the right time to do that.If you’re considering buying a home, you definitely should consult your bank or mortgage lending specialist to see what you were preapproved for. You might find that what you would pay for your mortgage is actually less than what you’re paying for rent. Do you have any questions at all, I’d love to talk more with you.