Month after month, real estate markets across Canada are shattering records. Month-over-month values are rising consistently, and year-over-year values are incomparable. All this and more is why it is safe to say that Canada is firmly positioned in a real estate boom.
Across the country, residential homes, semi-detached homes, and condominiums are flying off the market at a rapid pace and inventory is not being replenished quickly enough, leading to tightening conditions within local markets large and small. With the majority of real estate metrics sitting well above both five and ten-year averages in the vast majority of markets in the country, it’s undoubtedly a great time to sell. But seller beware, buying a home in many Canadian real estate markets is not such an easy game.
Just like the larger cities in Canada, smaller municipalities like Red Deer, Alberta are experiencing unprecedented sales and price levels. Alberta as a whole has had a strong start to 2021. Across the province, May sales totalled 9,331 units; both a 145% year-over-year gain and a new record for the month.
It’s safe to assume that the lifestyle changes brought on by COVID-19 (working from home and craving more living space to accommodate all the extra bodies and activities under one roof) has led to a huge surge in demand. This has only been driven up exponentially by record-low interest rates. These low interest rates have certainly made buying real estate more enticing for hopeful homebuyers, but soaring prices and stiff competition over limited inventory make this a tough market to navigate if you’re hoping to land a dream home within your budget.
Red Deer Real Estate Market Surging
The city of Red Deer sits snugly between Alberta’s two largest cities of Calgary and Edmonton, and is home to just over 100,000 people. After a strong first quarter where Central Alberta sold 1,274 units – 99.7% more than the same period in 2020 – there were questions about what would happen as the typically busy spring season came around. At the end of May, the city of Red Deer registered 197 unit sales which is not only a 163% year-over-year gain but also the highest number of units sold in the month of May since 2015. When compared to Alberta’s unit sales, Red Deer’s year-over-year percentage gain is slightly higher, indicating that the city is doing well above average when it comes to real estate activity.
With 299 new listings coming on the market, the inventory levels of the past few months have been responsibly supported. However, while the new listings in May 2021 are 43.8% higher than last May, the number is slightly lower than the last few months, indicating that the city may be running out of homeowners looking to sell. Backed mostly by the strong numbers of new inventory in the first third of the year, available inventory has remained relatively stable this month. Unfortunately, given the high levels of sales, the months of inventory has declined over 60% when compared to last year and is sitting at 3.23 months of supply should residential sales levels remain the same.
As predicted, the high sales levels combined with insufficient supply has led to increasing property prices throughout Red Deer. Luckily, the small Alberta city has not been as hard hit as other areas of both the province and the country when it comes to average price. At the end of May, the average price of a residential home sold in Red Deer was only 15.6% higher than that of May 2020 – a stark difference compared to other markets in the country that have experienced outlandish increases. With the average price of a home in Red Deer sitting at a reasonable $346,821, it makes the city an ideal destination for first time homebuyers who have been priced out of unaffordable, inaccessible markets across the country.
Red Deer Housing Market: What to Expect?
As Red Deer’s hot spring housing market transitions to summer, it is expected that trends should start to level off, cooling slightly- as is typical in the warmer summer months. Should new listings remain consistent over the next few months as sales decrease, the market should balance out as we move into the second half of 2021; more hopeful news for side-lined prospective buyers in Alberta!
This content was originally published here.