Home selling and building markets reflecting a tough economy, but hope in sight

The president of the Central Alberta Realtors Association is more dialled in than most on local home sale and building trends.

But Richard Pochylko was stunned when long-running Red Deer business Westridge Cabinets shut its doors and sought bankruptcy protection earlier this month.

“I was totally, totally shocked,” said Pochylko on Tuesday.

“It is a sign of what’s happened in the housing economy over the past four years. When you look at housing starts across Alberta, they’re down massively, especially in central Alberta.”

A letter posted to customers on the locked door of the 37-year-old company’s Gasoline Alley operation states that Westridge Cabinets is a victim of the difficult economic conditions being experienced across the province.

Pochylko points the finger at government policy as well.

“It’s a byproduct of housing policies by the government to slow things down. When you slow things down, something has to give.”

In recent years, rules have been tightened to make it harder for people to qualify for a mortgage.

“I know painters and electricians and plumbers who are doing far less business than what they were doing,” he said.

“Everybody is scrounging around trying to stay afloat, and I’m sure there’s going to be other repercussions from this if we don’t get things turned around and headed the right way pretty quick.”

The lingering downturn is reflected in home sale and building permit numbers.

At the halfway point of the year, Central Alberta home sales are at the lowest level in the past four years.

Through June, 1,746 residential units have sold, compared with 1,926 at this point last year, 1,877 in 2017 and 1,939 in 2016.

Pochylko said while the numbers may not be reflecting it, there does seem to be more optimism among realtors that the corner may be turned.

What the city really needs is to attract a company that will provide a couple of hundred good-paying jobs or so, preferably not tied to the energy sector, to draw more new people to Red Deer, he said.

“It’s easy to say (but) it’s really hard to do.”

While fewer people are swapping homes, it is not suprising that new builds are also down, according to City of Red Deer statistics.

In the first six months of the year, 291 residential building permits worth $11.8 million have been issued, compared with 338 worth $15.6 million last year.

In Red Deer’s new Evergreen neighbourhood, carpenter Drew Hamilton was busy working on one of more than half a dozen new homes under construction in the area.

“I feel like it’s starting to pick up,” said Hamilton, who is with the Sylvan Lake family business Hamilton Homes.

“It definitely was very slow through the winter and spring — slower than usual.

“But in the past two months, I’ve been busier than I have been in four years.”

Hamilton admits the length of the slowdown was worrying.

“I’m still a little bit worried just to see what this coming winter brings, because I like to work through the winter.

“It is what it is, right?”

While he’s been busy, the weather has not been kind to builders. The job sites were mud pits on Tuesday, thanks to almost daily rainstorms, and he admitted it was annoying not being able to go at the pace he’d like.