September stats are Balanced

The Red Deer Real Estate Board released their stats yesterday for September.  A few of the highlights are:

"BUYERS BENEFIT FROM BALANCED REAL ESTATE MARKET"
FOR IMMEDIATE RELEASE
Red Deer – October 9, 2007 – Throughout Central Alberta homes continued to change hands at a
reasonable rate last month according to the MLS® figures released by the Red Deer & District Real
Estate Board.
Residential sales in Red Deer for September were 158, a decrease of 13 per cent from the 182 sales
recorded in September 2006 and a decrease of 21 per cent from the 200 sales recorded in August
2007. Residential sales in the rural communities were 174, a decrease of 19 per cent from the 215
sales recorded in September 2006 and a decrease of 40 per cent from the 291 sales recorded in
August 2007.
Year-to-date Red Deer residential sales up to September 30 totaled 1,874, an increase of 21 per cent
compared to the 1,547 sales recorded for the first 9 months of 2006.
Year-to-date residential sales for the rural communities up to September 30 totaled 2,412, a
decrease of 5 per cent compared to the 2,543 sales recorded for the first 9 months of 2006.
"Buyers and Sellers can take advantage of the greater variety of homes in all price ranges and should
take advantage of this window of opportunity to purchase their first home, or sell and move up to a
larger home", said Board President Dale Russell. “We are seeing house prices leveling off, and a
return to a balanced market", said Russell.

The question on everyone's minds is what's going to happen next?  Short of a crystal ball, I think we look at seasonal trends from previous years and that typically indicates a decline in sales volume leading up to the end of December, then in the new year volume tends to begin to increase.  This is the historical pattern, and one I think we should anticipate to continue.  The challenge is that there are more sellers at this time of year than we've seen previously, and this is creating and excess supply of listings for the present demand.  For those of us that recall our intro to economics will remember that price is a function of supply and demand.  It holds true for real estate.  The greater the demand the higher the price.  Quite evident in 2006 which was marked by sharp price increases.  This fall we have lower demand than supply, causing a downward pressure on price.  The market is for the most part holding off on falling and the price appears to be holding steady.

Be sure to have frank conversations with your Realtor about what is happening in the market place, and what are some of the influencing factors.

I was speaking with a client recently and they had purchased there home for $79,000 back in the early 90's when Alberta and Canada were in an economic recession.  Today the anticipated value for that home would be closer to $260,000.  Today's market is a small bump in the road for your real estate portfolio.  Keep in mind that real estate is a long term investment.  Short term we see up's and downs long term it's been steady growth.

Your Friend In Real Estate,

Patrick Galesloot

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