Some Red Deer realtors are cautiously optimistic about the local housing market going into 2020.
Others point to a change in consumer attitudes, and their acceptance of the new reality.
Central Alberta Realtors Association president Allan Melbourne said 2020 is going to be “a little bit better than 2019,” referring to the positive overall outlook for the province in the new year and strides being made in the oil and gas sector.
Whatever gains there are in the economy – be it oil and gas, investment, or entrepreneurship, will be healthy for all Albertans, said Melbourne.
“We’re not going to see anything change in leaps and bounds. It’s going to be slow and steady.”
Red Deer realtor Blake King says if the real estate market keeps up with a diminishing downward trend, like it has in past years, it will hit growth in 2020.
King said home sales in November and December finished strong, with 23 and 20 per cent growth, respectively.
Two months of high sales doesn’t indicate anything, but the downward trend that started in the market around 2014-15, with the fall of oil prices, has been diminishing, he said.
Each year, home sales have decreased, but they have decreased less than the year prior.
In 2015, home sales were down 16.2 per cent over 2014 and they were down 8.4 per cent in 2016.
In 2017, they were down 6.7 per cent, and in 2018, they were down 6.3 per cent.
In 2019, home sales in Red Deer were down two per cent, King said.
If this trend continues, the Red Deer market will hit a break-even point, and from then on, it could go up, King said.
“(In 2020), they can be exactly equal, but they could also be a little bit higher,” he explained, pointing to two variables that have impacted the local housing market: the drop in oil prices and the mortgage rules that came into effect in 2018.
“Both of those things are behind us somewhat, and the reason I say that, is people who may have lost their jobs, may have started other work, or moved into other careers.
“And as far as the mortgage rules go, that affected everyone that year (2018), but it affects them less and less as time goes on.”
Melbourne said he hopes 2020 is a year when things “finally flatten out and we don’t see a decrease, and maybe even sell more houses than 2019.”
Central Alberta Realtors Association outgoing president Richard Pochylko said the market saw more activity at the end of 2019, and also beginning in 2020, although it is lower than the seasonal average.
Prices are “at the bottom” and “we will see minor increases in home values as the year progresses, probably more in the second half of the year, but far below 2015, or even 2016 values.”
What’s better news is the change in consumer attitudes. Pochylko explained consumers are accepting the new reality and the new prices.
“It looks pretty good for first-time buyers,” he said.
“People have started to realize this is where the market is, and wishing and hoping isn’t going to get them more money, so let’s just get on with our lives and just enjoy ourselves, which is a good thing to have happened.
“Overall, 2020 will feel like a much better year as the year progresses, and part of that is there is growth (projected) in the economy, and there is more security, and part of it is the realization that this is the reality,” Pochylko explained.
Red Deer realtor Dale Russell said sales are up so far in 2020, compared to January last year. He expects the slightly upward trend to continue this year, but don’t expect a boost in prices, making this a “golden oppotunity” for buyers.
He also expects the number of active listings to go up in 2020.
“Hopefully, we’ll see enough activity that prices won’t go down anymore,” he said.
Craig MacKenzie, a Red Deer realtor who retired in December, said he sees confidence is returning to the local real estate market, especially now the Trans Mountain pipeline has been given the green light.
He also sees movement in the market.
“Houses that were on the market for four, six, to nine months, are starting to sell,” said MacKenzie.
Red Deer College economics instructor Paritosh Ghosh said the local economy heavily depends on oil and gas, and the hope is the activity in the sector will keep up.
“We believe 2020 will be better than the last couple years, with the way the oil and gas sector is improvin. Not as much as we want, but it is improving,” Ghosh said.