Signs of spring:
- Green Grass,
- and For Sale Signs
Some years it seems as if those for sale signs pop up as fast as dandelions. The warm spring and summer weather certainly brings more people out and about looking at houses. After all would you rather move in -40 and snow or +20 and sunny?
This morning The CMHC crew was in Red Deer and delivered the economic forecast and market update to a room full of REALTORS®, Mortgage agents, and builders. My take overall is that Red Deer is in pretty good shape and poised for growth.
Growth forecast for Red Deer and area is minimal or "modest" for 2011 and into 2012. If the Oil and Gas economy of Alberta experiences a boom then we will certainly take part in a boom. However right now the forecast is modest resale housing transaction growth of 1-2%. GDP forecast for Alberta for 2011 is 3.3% and 3.6% for 2012. Positive numbers are good to see.
Some of the key highlights was on affordability for Red Deer and Central Alberta. Red Deer has of of the lowest price to income ratios. Housing prices in Red Deer on average are 4x the average household income. Compared to the Alberta average of 6x income and the national average of 8x income. They also reported that Red Deer has the 2nd lowest carrying costs of home ownership in Alberta.
If you're renting and concerned about making the leap to home ownership, CMHC reported that the house price to annual rent ratio is 25% compared to 29% for Alberta and 38% for Canada. This equates to a lower gap for moving from renting to owning.
How has this translated to Red Deer Real Estate?
Total Transaction volume for 2011 for the city of Red Deer MLS® is 649 residential sales reported compared to 627 last year. The homes that have been selling the most are those priced between $250,000 and $300,000. The chart above shows that the volume of sales this year is higher in the lower price points than the higher compared to 2010. This was also echoed at the CMHC presentation with 45% of the transactions reported for the central Alberta area being $250,000 or less with the majority being in the 25-44 age range.
So what does this mean to you?
The market is not declining and we're experiencing modest transaction growth for the year. Some months have been stronger than others but overall the trend is for more sales. We haven't entered into a "boom" but the decline is behind us and expected to stay that way with growth on the horizon.
If you have been hesitant to enter the market or increase your real estate portfolio then signs indicate that we're back into a positive cycle and while dramatic growth is not on the immediate horizon a slow and steady growth is.