Red Deer realtor Richard Pochylko sometimes finds house sellers need a bit of a reality check.
People who bought their existing homes 20 or 30 years ago, could easily have seen the value double or nearly triple since then.
But the market has been correcting for several years now, and the new house value number is sometimes an eye opener, said Pochylko, president of the Central Alberta Realtors Association.
“There are still a lot of people who haven’t been thinking about house values,” he said. “If you talk to them, they’re literally shocked by what you tell them.”
The days of houses soaring in value in a few short years are gone — at least for the foreseeable future.
“We’re having some problems adjusting to the fact that this province has a changing economy that isn’t going to be as boom-y as it was before. It’s going to be different.
“We will see better days ahead. But we’re not going to see — for a long time, anyway — crazy boom times, where your house just escalates rapidly.”
Pochylko said the drop in house prices should be put in perspective, however.
“It’s not like we went back to houses being worth $115,000 to $150,000. When I started in Red Deer 21 years ago, most of the houses were selling between $95,000 and $140,000. They weren’t selling at $250,000 or $300,000.”
Pochylko says it is a good time to buy, but don’t expect a financial windfall if you sell in a few years, is the message.
“I think five years from now, you’ll start to see a minor growth in value. You won’t buy a house for $300,000 and sell it in five years for $500,000.”
“You’ll buy one now for $300,000, and in five years, you’re going to sell it for $325,000 or $320,000, and that’s going to be a pretty good increase.”
A Century 21 survey of house prices across Canada released on Wednesday estimates single detached house prices in Red Deer fell in the first six months of the year by about six per cent year over year — to $262 per square foot from $276. That would see a $414,000 home reduced to $393,000.
Pochylko says that number is not far off the mark. In Red Deer, between 2017 and 2018, house prices dropped about 5.5 per cent and are heading toward a seven per cent drop this year.
Multiple Listing Service statistics for all of central Alberta show that year over year median house prices have dropped 2.2 per cent to $318,000, continuing — with a few spikes along the way — a downward trend from the first quarter in 2015, when the median price was $350,000.
This region’s experience reflects the housing market in much of Alberta. Through six months, Calgary prices were down 3.59 per cent and Edmonton 5.55 per cent. Some communities did better, with High River prices up 11 per cent and Lethbridge seven per cent.
“This is the second consecutive year our survey found soft home prices in Alberta, obviously because of the economic challenges in the oil and gas industry,” says Brian Rushton, Century 21 executive vice-president.
“For buyers, the good news is that means Calgary and Edmonton remain a bargain compared to other major markets like Vancouver and Toronto.”