Was October a month to be scared or meh?
There were 126 MLS® sales last month in the City if Red Deer. The 5 year average for sales in October is 133, you could say 2015 sales in October were "about average" (5% lower than the average). However, the sales this year are actually 15 units below the 10 year average of 141, and significantly lower than the 10 year high set in 2014 of 173. The lowest October was actually 2010 which trickled in at 76 MLS® sales reported. Here's a historic look at monthly sales:
|Month||Sales, Number of 2010||Sales, Number of 2011||Sales, Number of 2012||Sales, Number of 2013||Sales, Number of 2014||Sales, Number of 2015|
Well as you can see, month by month real estate sales volume in Red Deer can be up and down. It only paints part of the picture. Sales decreases alone are not necessarily a reason for alarm. 2015 is the Gold colour that is right in the middle of the pack.
The other side of the equation is supply. New Listing Inventory and Active Listing Inventory. The other side our supply & demand (sales) curve. Looking at New Listings October versus October, there wasn't a huge increase is listings coming on the market last month. there was 220 New MLS® residential listings in Red Deer for October 2015 compared to 213 last year. In fact, looking at the chart below you can see 2015 is up and down while also looking to be in the middle of the pack, and at times the lowest number of listings for a given month coming on the market were this year.
Sales volume is down from 2014, Listing inventory doesn't appear to be a problem. Is there a problem? Excess supply compared to demand puts pressure on price. In other words, if there is an abundance of listings compared to buyers willing to buy price will usually come down to entice an offer. Do we have excess supply? Compared to last year... YES, compared to 2010... NO. We are somewhere in between?
The Real Estate Market is changing. It is far more challenging to sell today than it was a year ago, but it's not dire or a fire sale. What we are experiencing is economic and employment related. The decrease in buyers can largely be attributable to buyers not being able to buy or secure/confident to buy in todays economy. It's not just "buyers". The sellers or people that would otherwise move, trade up or build new are sitting tight also.
What to watch for:
Interest rates versus price. The pressure on price is there but the risk of gains in lower prices being negated by interest rates rising is also real. If you're trying to time buying low while financing your home purchase with a mortgage, you may have the ideal conditions right now.