December saw a flurry of house sales in Red Deer in a year in which sales consistently lagged behind 2022.
Sales of detached homes in Red Deer were up 43 per cent last month – 63 compared with 36 in December 2022, according to statistics from the Alberta Real Estate Association (AREA).
Residential sales of all kinds, including detached, semi-detached, row houses and apartments, were up 39 per cent to 97 from 59 a year earlier in the city.
It was a positive end to a year where sales consistently trailed 2022 numbers. Year-over-year, semi-detached sales were down 13 per cent to 1,128 from 1,275 in 2022. Residential sales of all kinds were down seven per cent to 1,837 from 1,966 year over year.
Central Alberta Realtors Association chair Allan Melbourne puts the December sales boost down to the large influx of people moving to Alberta to take advantage of its hot economy last year.
“In my mind, a lot of it is attributable to the fact that we had such a huge in-migration into the province this past year. Even though there was a severe shortage of inventory, people just wanted to get into something before Christmas and the end of the year.
“I think for 2024, there’s still going to be a lot of in-migration. The economy is strong and we still have some of the most affordable housing in the country.”
As Melbourne pointed out, the big real estate story locally in 2023 was a shortage of prime prospects for potential homebuyers. AREA reports inventory levels, on average, were down 31 per cent to their lowest level since 2006.
“We just don’t have the inventory to satisfy demand. I’ve been doing this for 15, 16 years now and this is the first time I’ve seen that, where the inventory is so low,” he said.
Heading into this month, Red Deer had just over 200 active listings. Last year, there were 282 and the norm is 450 to 550 listings in the more popular house hunting seasons in years past.
There are signs that it is improving. “Just this week, we had 40 to 50 new listings come on,” he said, adding he expects listing numbers to rise as the year progresses.
While the number of new home builds was up in 2023, it has not been enough to significantly boost inventory levels. There were 86 permits issued last year in Red Deer for detached dwellings with garages and decks compared with 77 permits in 2022.
Average-days-to-sell figures reflect the tight market. In December, the average days to sell number was 59, down from 76 in December 2022 and 96 in December 2021.
House prices reflected the classic supply and demand equation, with detached home prices rising four per cent year-over-year to an average of $410,602, according to AREA. Semi-detached home prices rose even more sharply –eight per cent to $297,158. Apartment and row house prices remained stable, increasing one per cent to $221,754 and $185,280 respectively.
There are signs 2024 may see an increase in new homes being built. Melbourne said he is seeing more activity in the newer subdivisions and a new subdivision phase is ready on Highway 11 at the east edge of the city.
“I think we’re well-positioned and well-poised to have similar results, if not a little bit better than 2023,” he said. “Again, it’s all going to depend on the inventory.”
Interest rates will also play a role. If interest rates drop, that will likely encourage more people to buy their first home or upgrade to a bigger house. Experts are predicting Bank of Canada rates will begin to fall in mid-2024 and continue to be cut as the year progresses.
The house sales picture central Alberta-wide is similar.
Residential sales of all kinds were up 32 per cent in December — 253 sales from 191 in December 2022. Year-over-year sales were down just over nine per cent to 5,072 from 5,605 in 2022.