If you've been wondering if now is a good time to buy or sell, we strive to answer the following question, "Have we turned the corner from a Buyers Market to a Balanced?"
Of course, as a company where we get paid by putting real estate deals together, we're certainly going to say yes to both of those questions. However, we're also going to give you some market data to assist you in making that decision for you. The other disclaimers are the data we are using is MLS® data from the Central Alberta REALTORS® Association.
If you're buying a home in Red Deer, or any community, you're probably concerned with getting the best price possible and want assurance that your investment will go up not down.
Some market metrics we're looking at are Sales Volume, and Listing Inventory/volume. The Supply and Demand of real estate. Please keep in mind that supply and demand can vary by housing type, neighborhood, and price point. Typically average price stats are really a reflection of what the average income is for buyers. We can only afford to buy so much. So if the average income for the area goes up or down, or the size of the workforce goes up or down we'll see changes in the average price that reflect that.
Sales volume for all real estate property types in Red Deer for 2019 versus 2018 was down by 37 units. A 2.78% decrease in sales volume from the previous year. Relatively "flat" really. We saw the Active listing inventory close 2019 at the same level as 2018. 547 Active listings (all property types). Again a good description would be "flat".
Diving in a little deeper to look at the supply and demand by property type we see that the Sales to Listings taken ratio for Single Family Detached (a house) was 49% for 2019. That would classify as a balanced market. The listings are meeting the demand. We'd transition to a "sellers" market when that ratio hits 55% or better. A "Hot Market" Would be the 80% range. At the seller's market ratios we're not bringing enough listings on to meet the demand. You may think "well shouldn't demand to exceed supply to classify as a hot seller's market?". That would be an overheated market, and the market could not sustain the demand. Prices would soar and rental rates would climb dramatically to a level that brings balance.
The sales to listing ratio for townhouses in Red Deer was 58% in 2019. Review the average sale price by property type and you'll see that Townhouses in Red Deer have been in more demand which has pushed the average price up. The good folks over at Money Sense have some ideas on the sale to listing ratio here. (http://bit.ly/3011kY7 ) Their numbers are lower than what we would use in Red Deer, they might be more suited towards larger centers with higher sales volume.
From a few perspectives, we've turned the corner, and buyers can proceed to buy with more assurance. That added assurance also aids Sellers. For a few years now, it's been a gradual decline and sellers have felt that in their home equity for sure. Balance markets aid in preserving that equity, and signal a brighter future for homeowner investments.
While, a part of us is always cautious when we start telling people the market is changing, or the market is better. When we start seeing month over month trends, then we get more optimistic and excited. We experienced two months now where sales volume exceeded the same time frame in the previous year. So have we turned the corner from a Buyers Market to a Balanced? Let us know what you think in our comments section.
For comparison purposes please see previous years below.