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:
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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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,
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.
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 McRae, Kirk 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,
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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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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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.
Your Friend in Real Estate,
Follow Patrick on Twitter: @pgalesloot
| Single Family Sales | February |
| 2009 | 87 |
| 2008 | 115 |
| 2007 | 96 |
| 2006 | 122 |
| 2005 | 82 |
| 2004 | 84 |
| 2003 | 49 |
| 2002 | 64 |
| 2001 | 63 |
| 2000 | 57 |
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