Spring house sales have gone through the roof in central Alberta with nearly four times more homes sold last month than in April 2020.
Across the region, there were 793 residential units sold in April compared with 210 a year ago when the full effects of COVID-19 health restrictions were being felt.
In the first five months of this year, 2,224 homes have changed hands, more than double the 961 sales last year.
Average sale prices are also climbing — $350,334 this year, compared with $267,294 a year ago.
In Red Deer, the market is also red hot, with 223 homes sold in April, compared with 61 a year ago. Through five months, 645 homes sold, compared with 310 through April 2020.
The average sale price in Red Deer is also up sharply to $343,080 from $275,224 through April last year.
In Red Deer County, the year-over-year numbers are even more dramatic. There have been 406 homes sold through April compared with 147 in 2020 — a 176 per cent increase.
Central Alberta Realtors Association president Lindsay Olver said April-over-April increases are not a surprise considering the buying climate last year at the beginning of the pandemic.
“April was probably one of the slowest months last year,” said Olver, who is a realtor with Red Deer’s Coldwell Banker Ontrack Realty.
“Nobody really knew what this virus was so everyone was just nervous. Sellers didn’t want to list and buyers didn’t want to buy. There wasn’t a lot going on.”
However, this April still far outpaced pre-pandemic 2019 when 402 homes were sold in Red Deer through April.
So, is it time to call the market officially recovered? Olver is not so sure.
“I think it’s a little too soon to tell. A lot of it is pent-up demand. A lot of it is interest rates.”
When the economy fully reopens and everyone can get back to work it will be easier to gauge whether a recovery is here to stay.
Coldwell Banker’s chief economist told its realtors recently that activity levels could be maintained as the economy reopens. Rumblings that interest rates could rise may also inspire more people to buy while mortgage rates are low and financial stress tests allow them to buy more home.
Should interest rates go up, the market is likely to cool off.
Long-time Red Deer realtor Dale Russell says in his market comment that as with every recovery over the last 40 years, price increases start with the lower end of the price range.
Homes selling for under $400,000 have seen the biggest price appreciation, with those between $400,000 and $500,000 showing more modest increases. Homes worth $500,000 or more are generally showing even lower or no price increases. The most active price range selling is $300,000 to $350,000. The least active price range is for homes selling for over $750,000.
Russell, who is with RE/Max Real Estate Central Alberta, expects the market will start to cool down later this year. The province has been hard hit by COVID and the collapse in world oil prices. While oil is once again profitable not all of the energy industry jobs will return.
“There are plenty of good news stories out there, but there just aren’t the underlying economic fundamentals that can sustain the kind of activity we’ve been seeing,” says Russell in his May 8 market update. “We expect the pace of sales to slow and prices to moderate for the rest of the year.”
The strong real estate market is consistent across central Alberta, with most communities seeing the number of sales doubling or more year over year (2020 number in brackets). Blackfalds 120 (46), Innisfail 54 (21), Lacombe 105 (49), Ponoka 44 (19), Rocky Mountain House 39 (19), Stettler 47 (19) and Sylvan Lake 173 (70).