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Patrick Galesloot

Red Deer Real Estate 2009 Market Update and Beyond

We finished 2009, the end of the first decade of the "New Millennium". This month we've been busy returning to work focusing on new goals for the new Year. At Century 21 Advantage we have also been preparing for our kick off meeting. This is the meeting where we present tips, tools and information to our associates so that they can better serve your real estate needs. This year that involved gathering not just a month or years worth of data but packaging that for a decade and really comparing last year to where we have been in the real estate market for Red Deer.

The real estate data for the last year compared to previous years tells us a great deal. We can't dwell on the first three months of 2009, as we know we experienced an economic down turn not like another. We are still building from that.

The chart below illustrates the supply and demand of the Red Deer MLS real estate market. All data was collected from the Central Alberta REALTORS® Association.

As you can see from above, there was a sharp increase in "inventory"/supply (the number of listings). That occurred two years ago and we're still dealing with the effects. While sales rose with the increased real estate activity that rise was not enough to absorb the excess supply of properties for sale. As the market slowed down the investors (flippers and speculators) left the market first leaving less buyers available to purchase the homes offered for sale.

Sales volume for Red Deer totaled 1701 residential properties which was slightly higher than 2004 and less than 2005. The big difference and what put downward pressure on the price was the number of listings. 2009 was a very competitive year for pricing if you were looking to sell your home. The good news is we had a large number of home sthat did in fact sell. 2009 was still a buyers market year overall and had moments and trends that showed the real estate market moving into a "balanced market"

So what were people buying or more specifically price ranges?

Buyers were active in all price ranges. The most active price ranges were:

  • $200,000 - $250,000 with 301 sales
  • $250,000 - $300,000 with 412 sales and
  • $300,000 to $350,000 with 335 sales respectively.

It should be no surprise then all those sale centered around $300,000 our average sale price for 2009 was $290,187.

How does this compare to 2008?

2008 definitely had more sales recorded with a total of 1950 MLS sales in 2008 versus 1701 in 2009. With more sales in higher price ranges in 2008 the average price fell to $290,187 from in $301,363 average sale price in 2008. 2009 experienced a 12.77% decrease in sales volume and a 3.7%% decrease in the average price.

I think Red Deer real estate performed quite well despite the adverse market conditions. The average price drop was not as bad as some predictions and we certainly faired better than other markets. So was 2009 all bad or a real mixed bag?

It was a mixed bag.

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Total # Listings 2009 2009 Total # Sales 2009 Average Sale Price 2009 DOM

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JANUARY 218 62 $239,821 53

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FEBRUARY 276 113 $300,465 50

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MARCH 280 123 $285,407 48

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APRIL 305 178 $295,447 48

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MAY 331 197 $309,492 46

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JUNE 299 213 $291,287 46

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JULY 281 179 $289,213 49

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AUGUST 250 163 $289,122 46

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SEPTEMBER 269 122 $297,656 36

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OCTOBER 256 151 $293,268 48

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NOVEMBER 206 114 $291,957 47

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DECEMBER 124 85 $298,512 50

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Total: 3095 1700 $290,137 47.25

Summary:

Supply and Demand improved through out 2009 aided by interest rates, and a strengthening economy.

Interest rates were the big story of 2009. If you are a home owner or you purchased anything that required financing I think a big thanks is in order to the Bank of Canada and the Finance Minister. The decision to reduce interest rates and committed to hold them until mid 2010, was a tremendous boost to the real estate market. New buyers came back with confidence knowing that the rates they were locking in at were incredibly low and that mitigated any risk that price decreases would have.

Along with low interest rates came mortgage penalties in the form of interest rate differentials. We had many more clients that wanted to move and take advantage of market conditions only to be held back due to the large cost of discharging the existing mortgages.

Overall the slide in price slowed down and should turn around in 2010 with modest increases expected. Buyers can go ahead knowing that they still have the luxury of selection and bargaining power for some price ranges. It is important to note that inventory levels dropped significantly December 31 and many of those homes have not been re-listed creating an environment with more sales close to list and more competing offers occurring.

2010 prediction: 3.5% increase in sales and price, and natural gas demand recovering and strengthening gas prices.

Your friend in real estate,

Patrick Galesloot

@pgalesloot on Twitter.

P.S

Watch for a slide share power point show with more stats to follow.

All data was collected from the Central Alberta REALTORS® Association.

Century 21 Advantage and the Men of MOvember

The Men of MOvember here at Century 21 Advantage are doing their part to change the face of men's health.

If you haven't heard of "MOvember", it is a global initiate to raise funds and awareness for Prostate Cancer.  You can learn more at www.Movember.com.

However rather than just go to the Movember web site I encourage you to visit the Century 21 Advantage Team fundraising page for MOvember at: http://ca.movember.com/mospace/102207

The Movember Men are:

Left to right Eric Walper, Tim McRaeKirk Walper, Dan Wind, and Patrick Galesloot.  Absent doing real estate activities but a MOvember supporter:  Gavin Heintz

We have a few guys already sporting Mo's, Eric Walper (pictured on far left), Dale Devereaux, and Larry Kemshead.  A couple of the younger guys around the office stick with the goatee.  The man that grows the MO, stays true to the MO.  The Red Deer Kinsmen Club has agreed to match the donations that their members raise.  Fortunately I am a member of the Red Deer Kinsmen and your donations then become double courtesy of the Red Deer Kinsmen.

Please take a moment and donate if you can.

Your Friend in Real Estate,

Patrick Galesloot

 

 

Red Deer Real Estate in October, A Month to be Thankful or Spooked?

October in Red Deer is a weather roller coaster and a busy time for many. We get snow, rain, and sometimes both. We have family gatherings surrounding Thanksgiving, and parties at the end of the month surrounding Halloween. October is a fun month and diverse month.

In Red Deer real estate, October 2009 was stronger than October 2008!

The number of sales reported to the Central Alberta REALTORS® Association for the Red Deer MLS® was 151 properties sold up from 2008's sales number 128.

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2008 100& Under 100-150 150-200 200-250 250-300 300-350 350-400 400-450 450-500 500-550 550-600 600-700 700 + Total Avg. Pr.

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OCT 6 2 4 27 40 20 15 5 3 1 1 2 2 128 $297,451

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Information based on Red Deer Real Estate Board MLS Stats 2008 only.

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2009 100& Under 100-150 150-200 200-250 250-300 300-350 350-400 400-450 450-500 500-550 550-600 600-700 700+ Total Avg. Pr.

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OCT 2 4 17 32 34 24 18 12 2 1 1 2 2 151 $293,268

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Information based on Red Deer Real Estate Board MLS Stats 2009 only.

Where were sales up? As noted in the table above sales were most notably higher in the $150,000-$200,000 price range (which contributed to a lower average price '08 vs '09) and the $400,000 - $450,000 price range.

A pretty solid month of sales for October 2009 real estate. On a week by week basis we also see consistent results.

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Weekly Stats # Listings # Sales # Pending Sales Active Single Family Listings Active Apartment Condo Listings Total Active

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Sept.28-Oct.4 66 30 28 354 82 588

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Oct.5-Oct.11 79 30 32 356 94 604

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Oct.12-Oct.18 40 37 20 351 89 588

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Oct.19-Oct.25 49 31 34 343 89 585

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Oct. 26-Nov. 1 52 38 18 344 72 542

On a weekly basis we ended the month with a sharp decrease in inventory. This is not unusual to have many listings come off. We may see that number return this week and next as some sellers contracts expired or were cancelled. The number of new lists as noted above have been consistent for the most part during October.

The bottom line:

For buyers, there continues to be ample selection and affordable rates. The average price remains strong and stable. You can buy today with confidence that the market is stable and the largest risk buyers face today is in the potential increase of interest rates in the future.

For sellers, homes are selling at a good solid pace. If you are priced competively demonstrating value to buyers a sale is in your future. The same solid price and absorption rate that demonstrate confidence to buyers also tells sellers that the equity built up over time ion their home is more secure today than the past. The sales rate of homes selling however means that you must be market price savvy and in top showing condition.

October was a month to be thankful for in Red Deer real estate terms.

  • Sales up 17.9% over 2008
  • October Absorption Rate is 14 - 18 weeks
  • The Sales to New Listings Ratio is between 60% and 70%

Your Friend in Real Estate,

Patrick Galesloot

Follow Patrick on Twitter: @pgalesloot

4th highest February for Red Deer sales volume

Normal Market may be an applicable descriptor for the month of February. February 2009 recorded the 4th highest sales volume for single family homes when comparing to previous February sales volumes. Recent years February Sales Volume:
Single Family Sales February
2009 87
2008 115
2007 96
2006 122
2005 82
2004 84
2003 49
2002 64
2001 63
2000 57
Looking back at the last19 years of sales volume for February Single Family Homes. February 2009 was a pretty darn good month. Your Friend in Real Estate Patrick Galesloot

Red Deer Real Estate, Average Price increases 25.29% in 2009

February is over and March is coming in like a Lion today allowing time to catch up on stats and planning. Sales increased as did the volume of listings from the previous week as indicated above. Sales activity increased by 28% from the week before. Expectations are that March will have more positive sales growth with the reduction in interest rates. Now lets hope mother nature cooperates to provide conditions favorable to viewing homes. February ended in Red Deer, and it ended on a positive note. After experiencing a few months of sluggish sales we experienced an increase over January. The bulk of the activity is occurring in the $250 - $350,000 range. The activity that occurred in January in that range probably pushed the wave up into higher ranges for February. People moving up from that starter to the larger home. I believe now is a great time to be buying real estate. Buyers have selection, negotiating power, and the lowest interest rates in decades. If you have secure employment and are in the market to buy, then why wait? The average sale price in February increased by 25.29% over January from $239,821 to $300,465. Total sales Volume increased from 62 sales in Red Deer to 113. An increase of 82.26%. The question is for those of that were waiting for the "bottom", has that passed or was February an anomaly? Just like knowing when the peak is, we don't know where the bottom is (was) until it has passed us. Real Estate is LOCAL. The numbers are different in Blackfalds than Red Deer, Red Deer is different than Calgary and Alberta is different than a national average. Before you make a real estate decision talk to your Realtor, they should have these numbers for you. Not all do however, this tends to separate the great Realtors from average or even the "part timers". Do you remember 2005? It may surprise you but 2005 was a record year before 2006, 2007, 2008 for sales. The first three months looked like this: The headlines and interest rates announcements looked like: 18 October 2005 Bank of Canada raises overnight rate target by 1/4 percentage point to 3 per cent While the Oil and Gas market today is in decline rather than incline, mortgage money is plentiful and at more affordable rates than 4 years ago. Should we be hiding from the economy and the economic outlook or doing what we can to change it? Your Friend in Real Estate, Patrick Galesloot