Everyone is wondering what the Real Estate market is up to. Popular questions amongst consumers include, "is now a good time to buy?" , "are prices of homes going down?", "is now a good time to sell?", etc.
The answer isn't as simple as yes or no. There are so many factors that affect Real Estate. Also, certain price ranges are being affected while some aren't being affected as bad.
It comes down to supply vs. demand. That means, if there is a huge demand (# of buyers) and the supply (# of homes listed) is down that would in turn drive the prices UP. If supply is high yet # of buyers is low then that would in turn drive the prices DOWN.
What might affect supply vs. demand?
1. Overall economy
There is a lot of uncertainty at the moment Nation wide in terms of the overall economy. Our Canadian dollar is weakened. There is political issues within our government, higher taxes, oil price per barrel is down significantly which resulted in thousands of job loses across Alberta. All these factors make consumers worried. I've noticed a lot of my buyers are putting a pause on their home buying plans with the hopes that prices will decrease. Some of my seller clients are also putting a pause on selling- these are the clients whom aren't motivated. (Don't have to sell right away but would like to in the near future) And then I have the exact opposite clients... some sellers who want to sell ASAP, incase things get worse. Typically, these are clients who won't be buying afterwards. Since if you sell high, you buy high. Sell low, you buy low.
2. Interest rates
Interest rates are a huge factor in the housing market. The better the rates the more affordable homes become. The good news is interest rates are still very low! If they were to hike up that would really hurt the Alberta housing market. Therefore, lower rates make buying real estate really attractive right now if you require a mortgage.
I would say right now is a good time to sell. The reason being, there is typically less inventory for sale in the first quarter (Jan-March). If you wait until the second or third quarter- we usually see a spike in inventory (creating more competition). Also, anyone who is looking to move in the winter is typically more motivated. Many buyers wait until Spring/Summer for an easy move if they don't have to buy right away. The more good looking properties, with good locations, & priced well- the harder it is to compete which in turn could drive your price down.
4. Price range
The most active price ranges in the Red Deer market is between $300,000-350,000. $200,000-300,000 follow as well as the $400,000-450,000 range. We tend to always see a demand in these price point since they are the more commonly affordable. The higher your home is priced... the smaller the market becomes to sell. Therefore, even in a "hot market", for example a $1,000,000 home can a long time to sell to begin with however if you were to add a depressed market then that can really drive the price down or add significantly more days on the market.
We have had a decrease in # of sales in 2015 compared to 2014. However, despite what some may think- prices overall are remaining steady. I expect prices to soften in the next quarter but nothing too drastic in the active price ranges due to the fact that most people selling an average priced home tend to have little to no equity which doesn't give them much room to reduce their selling price. Homes in the higher price ranges will experience a bigger shift in price.
If you are wondering how your home would be affected by the "shift" in the housing market, please feel free to call me. I offer free home evaluations & market reports.
Email me at firstname.lastname@example.org for your free copy of the 2015 year end report for Red Deer, Blackfalds, Penhold, Lacombe, etc.
Your friend in Real Estate,
Melissa Morin - 403-318-5665