The numbers are in and we've been reviewing the 2008 Red Deer real estate market quite a bit here at Century 21 Advantage.
Quite a journey it has been with highs and lows in financial markets, and changes to price frequently. There were a lot of sales in the City of Red Deer. The graphs below are compiled form MLS data provided by the Central Alberta Realtors Association.
The average price for 2008 when combing sales for all product types (mobiles, apartment condos, townhouses, duplexes, and single family homes) was $301,363. That is certainly where the spike of the graph is.
On a month by month basis the sales volume rises and falls depending on the season, yet the grouping stayed mostly the same. The average for the year bumped up and fell in certain months but overall you can see that the most purchases are in the same grouping.
I think the monthly or seasonal sales of real estate is best demonstrated by plotting the sales numbers and comparing to previous years, such as this graph:
2008 is the line in green. We started the year off with exceptional sales volumes. For most of the year 2008 recorded the 2nd highest sales volume on record. By the summer we were equal to and greater than 2007 which had the highest sales volume. Then September came. I know it wasn't that long ago, but if you recall the fall of 2008 was the biggest economic free-fall we have seen in decades. Oil has come crashing down from $140/barrel to $37/barrel. As Oil plummeted in price so did sales volume. Yes Red Deer is in the thick of Oil and Gas country and when Oil takes a nose dive so do pay cheques and buying power. This also pushed prices down, and more value is to be found today at $350,000 than a $350,000 home in 2007.
I point out that the sales volumes rise and fall with seasons. This year we added political turbulence, financial market meltdowns, and dropping commodities to the mix. Financials powers also responded by increasing credit requirements and eliminating buying options such as "zero down". Short term wise we are felling them as are many people and industries across the country. This should not deter you from buying. Unlike previous declines in real estate markets, the interest rates or borrowing costs have remained low.
Buy today as you have lots of choices and the cost of borrowing is low. We may be at the bottom today. The only way to know for sure where the bottom of the market occurred is by looking back. SO that moment in time has based. No different than buying at the peak. If you knew you were buying at the peak would you? The answer is NO. However this is what many of us did. In a sellers market we can't stop the buyers from buying. Buyers are lining up as fast as sellers are available. Then in a buyers market the buyers are actually sitting on the fence while the best buying conditions pass them by.
This is not a sit on the fence market. It is a buying market.
Did you know that in 1956 house prices in Red Deer were $5,000 - $9,000, then in 1972 they were $25,000 - $30,000. in 1989 the average house price was now (1989) $86,387. The 80's had interest rates of 18%, the country was in a recession, and the national energy program brought economic activity to a virtual standstill in Alberta. Jump forward to recent years and the picture looks like this:
I ask you 4 questions email me your thoughts.
- Where do you see house prices going long term?
- How long do you plane to live in that house?
- Should you wait?
- Can You afford to wait to buy based on past price trends?
Unfortunately I do not have a lot of data prior to 1989, but does this change your answer?
I don't know what the market will look like at the end of 2009, but based on the above data I'd feel confidant in buying a home today.
Your Friend in Real Estate,