Red Deer house sales slumped to their worst level in at least 11 years as a lingering economic downturn was worsened by the pandemic.
For central Alberta overall, sales were up over last year with 4,345 residential units selling, compared with 4,084 in 2019. In 2018, sales were at 4,342 and 4,399 in 2017.
In Red Deer, there were 1,262 residential units sold last year, down from 1,295 in 2019, according to Multiple Listing Service statistics dating back to 2010 provided by the Central Alberta Realtors Association. In 2018, there were 1,329 homes sold and 1,398 in 2017. The best year in the past decade, saw new owners take the keys 2,026 times in 2014.
While lower sales are never good news, sellers, buyers and realtors were facing unprecedented challenges last year, a long-running economic downturn exasperated by the collapse of world oil prices.
As the pandemic took hold, health restrictions all but stopped open houses and limited opportunities for showing homes. At the same time, many people lost their jobs, had their hours cut, and saw business and sales sharply decline.
The result was the prime spring sales and buying period was a near wash.
Despite the sobering statistics, there is room for optimism. In the last quarter of 2020, sales rebounded. From July through December, Red Deer house sales were better than the same month in 2019. And in four out of six months, sales were better than the same month for the previous three years, the last year listed on the realtors association’s online market update.
The pattern of a slow start for sales followed by a strong fall was seen in the entire central Alberta region. From October on, home sales were better month over month compared with 2019.
Average home prices in Red Deer have remained relatively stable. The average sale price last year was $313,420, compared with $310,570 in 2019 and $313,420 in 2018. The highest average sale price in the last 11 years was $338,000 in 2015. In 2010, the average sale price was $304,510.
Central Alberta Realtors Association president Lindsay Olver said Red Deer sales have started off stronger this year than in January 2019, a trend other realtors are seeing in Edmonton, Calgary and elsewhere in many places in Canada.
Whether the trend continues depends like almost everything else what happens with the pandemic this year.
“It’s hard to what’s going to happen until we know whether they’re going to open up all of the businesses,” said Olver, broker and owner of Red Deer’s Coldwell Banker On Track Realty.
“I know interest rates are at an all-time low right now and that’s definitely helping us. I think people that can buy are buying.”
Olver also saw other positive signs in the local economy over Christmas. Many shoppers made efforts to support hometown businesses, she believes.
Real estate, like so many other elements of the economy, are closely linked to the level of optimism. And should home sales start to take off the benefits spread through the community, she said.
It is estimated every house sale generates more than $40,000 in spinoffs, everything from legal fees, realtor commissions, painters and appliance and furniture sales.
Re/Max Real Estate Central Alberta realtor Allan Melbourne is off to a good start this year.
“I’ve been busy in January. I’m putting together a couple of deals, I’m showing homes and there are some new listings coming on.”
However, he is not expecting to see a dramatic turnaround in central Alberta’s real estate market anytime soon.
Melbourne expects the market to see slow and steady improvement, but cautions that there are too many unknowns both on the health and economic fronts to make informed predictions.
“We need to be putting everyone in oil and gas back to work and get the economy back on its feet again,” he said. “I think we’ve hit the bottom of the trough and we’re on the way back.
“But it’s definitely not going to be an overnight thing.”