August 15, 2013 – Market Update

Wed, 28 Aug by Dale Russell

Sales to the middle of August are on pace, both with last month’s and the same period in 2012.  The only difference appears to be a slight reduction in the number of active listings.  The number of listings with pending sales has jumped this month, suggesting a very strong finish to the summer.

While sales have been relatively strong this year, the listing inventory remains strong as well, and the market continues to favour buyers.  The sales to listing ratio is hovering in the 20% range, and prices won’t increase until that ratio reaches almost 30%.

That strong inventory level suggest that local builders are very busy and so far able to produce enough new homes to offset the strong population growth we have been experiencing all over Alberta as indicated in the ATB article below.

Interest rates are on the rise, but they are still very low compared to the last 30 years.  Any rate increase will have a negative impact on prices though.  It will be interesting to watch how high they go and what impact they will have on price over the rest of the year.

Weather Cool, But Job Market Hot – Todd Hirsch, Senior Economist, ATB Financial 

Alberta may be experiencing a cold, damp summer—but its’ job market is anything but.  In July, Alberta gained 16,600 new jobs, bringing the seasonally adjusted total employment to 2.217 million workers. The June flood may have played a part: while the provincial unemployment rate fell to 4.5 per cent, it actually ticked higher in Calgary to 5.3 per cent.

Canada’s job picture was not as rosy this morning. A loss of 39,000 jobs surprised economists who had, in a consensus forecast, predicted a modest gain of 6,000 jobs. The national unemployment rate ticked up a tenth of a percentage point to 7.2 per cent—now only slightly below the 7.4 per cent rate in the United States.

Alberta and Saskatchewan remain the hot job markets of the Canadian economy with employment growing by 3.0 and 3.9 per cent, respectively, over the last twelve months. Nationally employment has grown by a much more sluggish 1.3 per cent.

The sectors creating the most jobs in Alberta are not, however, the traditionally strongest sectors. Indeed, the oil and gas sector has shed 9,500 jobs (year-over year), as has the construction sector (-4,900). The strongest gains have come on the service side of the economy—professional, scientific and technical services (+28,200), retail and wholesale trade (+17,600) and information, culture and recreation (+13,700) showed the largest annual gains.

The surging employment has also been marked by good quality jobs. Nearly 89 per cent of the new positions created over the last twelve months are fulltime. That has helped boost consumer confidence, retail sales and the housing market throughout the province.