**Correction below: Average price numbers posted on the main image and in the paragraph “Average prices are up” claim to be based on detached home sales. That is a mistake, the numbers posted are based on residential property in Red Deer and the average is based on and encompassed all residential units sold in Red Deer.
Life is full of surprises and this year’s real estate market has been nothing but. In a year of uncertainty and economic woes real estate sales in Red Deer are overall almost as high as they were last year, before anybody heard of COVID-19. And there’s a good chance, with sales higher this last half of the year, we might even outperform 2019.
Sales are up
Home sales up or down in a market is only one way to gauge a market’s health and average price is another. From month to month an average price fluctuation isn’t necessarily noteworthy because a couple higher price homes selling can skew the average, but if it’s a large fluctuation it’s worth taking a closer look at.
Average prices are up
Below is average price data over the last 12 month and the highest month’s average, prior to October was June. In October (last month) the average sale price on detached homes was $327,403. And the most surprising thing about that is, the September average (one month prior) was the lowest average this year.
Inventory is in good shape
We could argue that our current low m.o.i. (months of inventory) is putting upward pressure on prices if September wasn’t the lowest price of the year. Both months were during the same low m.o.i. period. However, for the low m.o.i. to have an impact it would take a few months.
With that said, there’s a better chance September’s average price was skewed, not the 4 months surrounding it with average prices $15,000 to $28,000 higher that it.
Will prices continue to average better than expected?
The m.o.i. or months-of-inventory is generally a combination of fewer homes for sale (supply) and higher sales (demand). When supply goes down and demand goes up so do prices. In our current situation it’s the higher sales making the difference. We’ve had generally normal inventory levels this year but higher sales since June.
If sales continue strong and COVID-19 limits listings, prices could remain strong and even increase.
To give perspective on our current price average, last year (2019) the average home sale price in October was $300,547 and this year it’s $327,403. Last year the 4 month running average was $305,199 and this year it’s 314,441. And the same time last year the 12 month running average was 307,540 and after October this year it’s $311,218.
Prices are definitely higher this year than last. Will that continue? I’ll keep tracking it, please check back each month at www.iOnRealEstate.ca.
