The Red Deer market is in better shape than expected amidst higher interest rates
Blake King – broker/owner, Big Earth Realty
Inventory levels remain low in Red Deer even though sales are slower in 2023. Inventory was low through 2022 because sales were high but now it’s because fewer homeowners are selling. For the same reason that interest rates slow buying down, it also slows sellers down.
Inventory
The number of homes for sale (inventory) in Red Deer was lower in June than in May. I thought we’d see inventory levels begin to increase with sales slower this year but there’s more to consider.
The high-interest rates that are keeping some buyers out of the market are also keeping some sellers sitting tight. Homeowners know that if they sell they also have to buy. And we might not see higher inventory numbers until more low-interest mortgages mature. Inventory levels will also adjust gradually as higher rates become the norm.
Average price
The average sale price of homes in Red Deer has changed this year but not in the typical way.
The overall home price average looks as though prices are decreasing but they aren’t. More buyers are buying less expensive housing and that affects the overall price average. However, in almost every price range prices have increased.
But because fewer detached homes are selling and more homes are selling in the lower price range, the overall average is lower.
For example, if normally 100 detached homes sell each month at an average price of $400,000, and 40 detached homes sell at an average price of $220,000, the overall average price that month would be $348,571. But if only 70 detached homes but higher at $410,000, and 70 attached homes sell higher at $230,000 in a month, the overall average price would be only $320,000. The average price in each segment has increased but with fewer homes selling in the higher-priced segment the overall price average is lower.
For more price average details read our monthly average price report each month.
Home sales
Home sales in Red Deer took a turn this month
Homes sales overall in Red Deer are 20% lower than they were this time last year, due in most part to higher interest rates. But with very low inventory levels more homes could sell each month if there were more for sale.
Strangely enough, after 10 months of lower sales, detached home sales were up 6% in June over June 2022. Attached home sales were down in June compared to last June but only by 1.3%.
Home sales overall were up 1.5% this June over June 2022.
Home sales overall are only down 20% overall this year they’ve improved after being down 25% last month.
Overall home sales in 2023 are still substantially higher than sales in 2019 and 2020 and you can see this at – https://www.ionrealestate.ca/red-deer-real-estate-news/red_deer_detached_home_sales/
Days on market
The lower inventory rates are causing homes to sell more quickly, lowering the number of days on the market (D.O.M.) homes are taking to sell.
Summary
Almost all of the information above points toward it being a good time to sell your home if you can and need to. I also think it’s a good time to buy if you’re considering that.
Alberta is seeing more immigration and interprovincial migration because there’s attractive employment here and the cost of living is relatively low. Inventory levels are expected to stay low and that will push prices up.
Check in each month at www.iOnRealEstate.ca for Red Deer and Central Alberta real estate news, stats, and information.
Download a copy of the Red Deer real estate infographic – https://www.ionrealestate.ca/wp-content/uploads/2023/03/Feb-infographic.pdf
