Despite uncertainties caused by the COVID-19 pandemic, Red Deer and central Alberta’s housing market has remained strong throughout 2021.
“One of the reasons it’s been so strong is we’ve had low interest rates,” explains Lindsay Olver, chair of Central Alberta Realtors Association.
“There were a lot of jobs that have been lost in the last year, but the ones that remained intact, they started buying. So people who maybe weren’t in the market before started buying.”
Travel restrictions had people buying homes as well, Olver explained.
“Also being able to work remotely enabled people to live wherever they want. They can move places that might be cheaper than what they’re used to – they could move away from the downtowns of cities,” she said.
Sales in the city improved in October relative to last year, returning to levels that were more consistent with longer-term trends, according to the Alberta Real Estate Association.
In October, there were 132 sales of detached homes, semi-detached homes, row homes and apartments – that is a 14 per cent increase from October 2020. Meanwhile, there were 194 new listings in October, which is a six per cent increase from the same month last year.
There have been 1,645 home sales so far in 2021, which is a 56 per cent increase from the same time period in 2020.
While the year as a whole has been positive for the real estate industry, the housing market isn’t “as strong” as it was in the spring, Olver said.
“As the economy opens up and people are able to spend in different areas of their life, it’s going to stabilize. Also there’s an expectation that interest rates may increase a little bit as well – they already have,” she said.
“Nobody holds a crystal ball, so who knows what’s going to happen next? Nobody even expected this to happen with COVID, but it did.”
More normal levels of supply and demand have brought the market back into more balanced conditions, the Alberta Real Estate Association said in its October report, adding this is also starting to slow the upward pressure on prices. However, strong gains earlier this year have still left home prices far higher than last year.
Year-to-date average prices in the city have increased by over eight per cent, nearly representing a full recovery of prices from previous highs. However, the price improvements are mostly due to the gains in the detached sector of the market.