Low inventory is putting positive pressure on Red Deer home prices even with higher interest rates.
The chart below shows real estate prices over the past 36 months for both detached homes and homes overall. This is so everyone reading can see where Red Deer home prices were and where they’ve gone over the past 3 years. 2023 is panning out as an unexpected and interesting year for the Central Alberta real estate market.
The two charts below compare detached home prices to home prices overall but they don’t tell the whole story. At first glance, the charts look as though prices are lower than they’ve been. However, because the charts are based on the 12-month running average all changes are gradual.
December 2022 and January 2023 had very low home price averages and that’s what dampened the running average. There were some lower monthly averages at the end of the year but prices have sure jumped since.
To get a better picture of what is actually happening with home prices it helps to look at the recent data in the table below.
The table below tracks the price average on detached homes and homes overall in Red Deer. It includes both the month-to-month average and the 12-month running average for both. And the table below goes back 13 months so you can compare the most recent average to the price average of the same month a year earlier.
|Month||Average||12-month avg.||Average||12-month avg.|
|Apr 2022||$348,134||$335,163 ⬆︎||$404,061||$381,081 ⬆︎|
|May 2022||$343,666||$334,903 ⬇︎||$396,107||$381,967 ⬆︎|
|June 2022||$348,628||$336,720 ⬆︎||$413,574||$385,105 ⬆︎|
|July 2022||$343,101||$336,165 ⬇︎||$416,991||$387,061 ⬆︎|
|Aug 2022||$338,850||$336,747 ⬆︎||$394,765||$389,573 ⬆︎|
|Sept 2022||$342,398||$337,167 ⬆︎||$408,881||$392,134⬆︎|
|Oct 2022||$320,941||$335,725 ⬇︎||$376,165||$391,176 ⬇︎|
|Nov 2022||$332,885||$337,029 ⬆︎||385,705||$393,765 ⬆︎|
|Dec 2022||$301,766||$333,908 ⬇︎||$359,519||$391,742 ⬇︎|
|Jan 2023||$283,526||$331,407 ⬇︎||$347,922||$390,200 ⬇︎|
|Feb 2023||$311,949||$329,283 ⬇︎||$378,131||$389,634 ⬇︎|
|Mar 2023||$333,211||$329,053 ⬇︎||$402,240||$390,338 ⬆︎|
|Apr 2023||$360,820||$330,110 ⬆︎||$416,306||$391,359 ⬆︎|
Overall home prices
We saw the monthly price average hit a long-term low in January and now in April it hit what’s probably an all-time high. As interest rates climbed last year price averages decreased, but as inventory shrinks this year price averages are increasing.
Check out the Central Alberta real estate inventory report here – https://www.ionrealestate.ca/central-alberta-real-estate-news/real-estate-inventory/
It’s not high sales (demand) alone that’s pushing prices up. Fewer sellers and lower inventory (supply) are compounding the issue.
The monthly overall Red Deer home price average in April 2022 was $348,134 and this year it’s $360,820, up 3.6%. It will take a little time for the 12-month running average to display a trend but in April 2023 it was only 1.5% lower than in 2022. And December 2021 and January 2022 averages weren’t as low as Dec 2022 and Jan 2023.
Detached home prices
Detached home prices have followed a similar path as home prices overall but inventory levels on detached homes have been lower for a longer time. And because inventory was lower for detached homes the monthly price averages were more stable than prices overall.
The monthly detached home price average in April 2022 was $404,061 and this year it’s $416,306, up 3%. The 12-month running price average in April 2023 is 2.7% higher than in 2022. Low inventory levels are pushing prices upward.
Red Deer home prices will likely continue upward
There are a number of variables causing lower inventory and none of them will ease off in the near future. And even if inventory levels increase a little it won’t make a lot of difference. Because with inventory levels below 2 M.O.I. (months of inventory) almost everywhere in Central Alberta it’ll have to increase much higher to shift the market into a buyer’s market.
Check back each month at iOnRealEstate.ca to see what local Red Deer home prices are doing.
Hosted by Blake King Realtor® and Big Earth Realty. Blake continually monitors the Red Deer and Central Alberta real estate market to track changes and watch trends so he can help his clients make the most informed decisions, buying or selling. If you want to learn more about how local market stats impact your next real estate transaction call or email Blake anytime at (403) 350-7672 or email email@example.com