Real estate prices continue to trend upward in Red Deer and Central Alberta.
If you look at the average sale price of homes in Red Deer month-to-month it looks like a roller coaster but to identify we look at a running average.
In addition to posting the average home sale price in Red Deer each month, I also track the 4-month and 12-month running averages. The 4-month running average started its trend upward in October last year indicating prices were trending and to confirm suspicions the 12-month running average has continued to increase since December.
It takes a long time to see a trend in a 12-month average but when it happens it’s obvious that the average is increasing. A increase of the 4-month average is likely enough proof that prices are trending upward but it’s nice to be sure.
Why are prices increasing in our local market?
It’s because there is more buying activity and lower inventory. If inventory increases at the same rate as buyer activity, prices would likely stay the same but with supply low the demand up prices edge upward.
Will prices stop climbing?
Some variables such as the stiffening of the mortgage stress test and lower activity later in the year might encourage prices to stabilize but price increases could continue. It’s difficult to predict what will happen long-term with prices but as long as interest rates are low heightened activity will likely continue.