Real estate sales in June suggest that the Central Alberta market has turned the corner, but some local Realtors believe it still has a ways to go.
The Central Alberta Realtors Association reported on Wednesday that 460 homes in the region sold on the Multiple Listing Service system last month. That was up two per cent from the 452 sales recorded in June 2008 — the first time since September 2008 that sales increased year-over-year.
The increase was 4.4 per cent in Red Deer, which had 213 residential sales last month and 204 a year earlier. Sales outside the city numbered 247 in June, one fewer than in the same month in 2008.
A news release issued by the Central Alberta Realtors Association noted last month’s sales tally was the third highest ever for a June. Only June 2007 and June 2006, which had home sales of 560 and 662 respectively, were higher.
The association reported that the average selling price last month was $270,000, five per cent lower than the average of $285,000 in June 2008.
Chris Bevington, a Realtor with Royal LePage Patrician in Red Deer, cautioned that it can be misleading to assess the market based on sales of all property types across the region.
If you look only at sales of single-family homes in Red Deer, he said, the trend is less positive. And prices have a long ways to go before they return to the levels of a few years ago.
“June was an improvement,” acknowledged Bevington, suggesting that the local market probably bottomed out earlier in the spring.
But he thinks things are now levelling out with the traditional summer slowdown.
Dale Russell, broker-owner of Re/Max Real Estate Central Alberta, echoed Bevington’s comments.
“You’ve got to rationalize those numbers a little bit,” he said.
June was a very good month but sales in July appear slower. Russell also thinks prices have bottomed out, but said the market remains sensitive to bad news about the economy.
He and Bevington are optimistic about the market in the long term.
“The market is good, inventories are at a normal spot — we’re at a nice balanced market right now,” said Russell.
The Central Alberta Realtors Association said there were 883 MLS homes sales in Red Deer during the first six months of 2009, down 18.5 per cent from the 1,084 sales to the same point last year. Outside the city, there were 956 sales from January to June, a 24 per cent drop from the 1,257 deals that closed in the first half of 2008.
“We had a slow spring and we’ve picked it back up the last three months,” said Russell.
Meanwhile, the number of new properties coming onto the market in June was down from 2008 levels for the sixth consecutive month. There were 866 new residential listings on the MLS system in June — 300 in Red Deer and 566 outside the city — five per cent fewer than in the same month last year.
The association said there was enough homes on the market in June to last 5.8 months. That compares with a 17-month inventory as of last December.
“That’s a trend that may eventually lead to some price escalation, but we’re not there yet,” said Russell, suggesting that it could be late fall before sellers see a recovery in prices.
The Central Alberta Realtors Association has cautioned that average prices are useful only for establishing trends and comparisons over a period of time.