April detached home sales are lower than last year and prices are higher. Both are a result of the current shortage of homes available for sale in Red Deer.
When home sales appear to slow, a person’s first assumption is that demand is slowed. However, in our current market that’s not the case.
With just over 1-month of detached home inventory available for sale, during the most active time of year, I’m certain we would see more homes sell if there were more listed.
In April 2021 there were 168 detached homes sold in Red Deer and in April 2022 there were only 164. Detached home sales this year in April were -2.3% lower than last year.
What makes this interesting is that in April 2021 there were twice as many detached homes for sale with 2.4 months of inventory. This year in April, inventory was half of what it was last year with almost the same number of sales. This, and taking a closer look at home sales overall indicate that detached home sales would be higher if there were more available.
Normally as a market gets busier sales of each type of property increases at approximately the same rate. Right now that’s not happening.
In contrast to detached home sales, attached home sales are up 33%. There are just enough attached homes to keep buyers happy with over 3 months worth of inventory. How come attached homes (semi-detached homes, townhomes, and apartment condos) are seeing much higher sales than last year? Because the inventory of attached homes is lower than normal but still high enough to see sales increase. And there are just too few detached homes for sale.
In April, detached home sales were down -2.3% while attached home sales were up 33%. Normally these two numbers would be closer. However, with not enough detached homes for sale, some detached home buyers appear to be searching other options.
Some buyers, not able to find a detached home for sale are buying attached homes and, because prices have increased, some buyers who were hoping to purchase a detached home have been priced out.
The average home price has been edging upward since 2019 and the low inventory rates certainly encourage it. Higher prices are positive for homeowners who haven’t seen increases for a long time but it’s more difficult for buyers right now.
The average home price in the Red Deer and Central Alberta market are increasing but only marginally overall. The 4-month running average was up 0.6% and the 12-month running average was up 0.1% in April 2022.
The increase in attached home sales, which are generally less expensive, could be why the average price increase, as a whole, isn’t too drastic. But if we look at detached homes on their own, with the inventory levels so low, the price average jumped 6.5% in April 2022, over last April.
As a whole, the average home price increased 3.8% since last year at the same time.