Central Alberta Real Estate Market Update ((November 2022)

The year 2022 is almost over. As we’re into late fall, the Red Deer housing market is still constantly changing.

While sales activities have slowed down, prices are still going up according to the Alberta Real Estate Association (AREA) monthly statistics.

Red Deer Real Estate Market Update for November 2022

Based on the report, residential sales are down by 5.6% than the same month last year with 116 residential properties sold in November 2022.

This slowdown in sales is typical during this time of the year especially since snowfall came early in Alberta.

These below-average weather conditions typically discourage most buyers and sellers from engaging in real estate transactions now and instead wait for the activities to peak again during the spring.

However, on a year-to-date basis, there actually have been some improvements in the sales activities in the area.

“Year-to-date sales improved by seven percent this year,” AREA said.

New listings, meanwhile, are down by 41.1% percent. With not enough properties on the market, the inventory is on its all-time low since 2013.

“As of November, inventory levels dropped to 353 units, the lowest levels seen in November since 2013 and nearly 30 percent below the 10-year average,” AREA said in their report.

There is not much significant change in the months of inventory, however, given that the sales activity and the inventory levels are both on the decline.

“While conditions are not as tight as they were earlier in the year, with only three months of supply conditions are still considered relatively tight for this time of year,” said AREA.

The diminished supply is a contributing factor to the increase in prices as there are more buyers than sellers in this market.

According to AREA, the average residential price is $332,885, which is 4.9% higher than last year.

Another factor for the rise in prices is the continuous interest rate hikes this year by the Bank of Canada (BOC).

Seventh Interest Hike this Year

Just this Wednesday, November 7, BOC announced its seventh leg of hikes this year. The BOC raised the overnight rate by 50 basis points to 4.25 percent, making it the highest rate since 2008.

These continuous interest hikes are meant to tackle inflation, and according to BOC Governor Tiff Macklem, “we are getting closer, but we aren’t there yet.”

In their recent announcement, BOC said they are yet to know if another rate hike is needed.

“Looking ahead, Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target,” BOC said in a statement.

With this rate, it only means that there is an increase of $29.96 per $100,000 in mortgage for variable holders.

What happens to the Red Deer real estate market now?

Rising interest rates normally drive real estate prices up, therefore, it is anticipated that demands drop. However, it is noted from recent sale activities that demand has not slowed down but shifted from the detached market to higher-density housing options. There are still buyers out there, but they are looking for more affordable options.

With all this news on the looming recession and housing market crash, it is only right that you get the right advice from seasoned real estate agents with decades of experience in the market. Talk to a reliable realtor and mortgage expert in your area to get more tailored advice on what steps you should do if you plan on selling or buying soon.

Meanwhile, here’s how the other Central Alberta markets are doing.