April 15, 2014 – Market Update

Mon, 21 Apr by Dale Russell

Sylvan Lake sales in the first half of April kept pace with the first half of March of this year as well as the first half of April 2013.  The one very large difference in the market this year compared to last is the number of active listings which is off by almost 25%.  The other obvious difference is the number of active listings with sales pending compared to last month at this time – double!

That means our inventory levels this spring may be too low to be able to provide the right home for every buyer.  When buyers compete for homes, prices go up.  The Red Deer and Blackfalds markets are also experiencing inventory shortages and some of the buyers looking in those places are likely to expand their horizons to Sylvan Lake, creating even more demand.

According to the Alberta Treasury Branch article below, builders are responding well to the ongoing strong demand for homes across Alberta.  We have some concern in central Alberta that the number of serviced lots available for immediate construction is rapidly shrinking while the late spring is hampering servicing of new lots.  It appears there could be some shortages of lots this summer until more are serviced.  Sylvan Lake is ne market where it appears there is a good lot inventory. That may mean increased activity for Sylvan Lake builders this summer.

Housing starts keep market in balance, Todd Hirsch, Chief Economist, ATB Financial

Home builders in Alberta geared back up in March after a slight pause in February. According to data compiled from Statistics Canada and the Canada Mortgage and Housing Corporation, construction started on just shy of 40,000 new homes. (This figure is seasonally adjusted and at annualized rates, meaning that if housing starts in March were to continue at the same pace for twelve months, there would be this many new homes started in one complete year.)

Housing construction is one of the most important economic indicators. It provides an excellent barometer of consumer confidence in the province. Alberta’s strong labour market and excellent income levels are giving buyers plenty of reasons to feel confident in their decision.

A good deal of economic activity in other sectors comes from housing construction. New houses stimulate retail and wholesale trade in everything from new flooring and paint to lighting and furniture for the new home. Finally, housing starts employ thousands of workers in the construction sector. Framers, carpenters, electricians, drywallers and landscapers are among the many skilled trade people who depend on new home construction for their livelihood.

Alberta’s strong job market has been a magnet for job seekers and that has added to the demand for housing. The pace of new home construction in March will add to the inventory of new and existing homes, which in some parts of the province (including Calgary) has fallen quite low. New inventory should help keep the supply and demand of houses in good balance.

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March 30, 2014 – Market Updates

Mon, 07 Apr by Dale Russell

Sales in Sylvan Lake in March took off in spite of the weather. The number of active listings didn’t keep pace and the market moved quickly from favouring the buyer to the seller. Like other central Alberta markets, the most activity and the highest sales to listing ratio is in the $250,000 ‐ $400,000 price range. A stronger US dollar and higher prices in the warm southern states may encourage folks looking for a second residence to consider the Sylvan Lake cottage market this summer.

Spring has been reluctant to arrive, but the spring real estate market is definitely here. All the economic indicators ‐ energy prices, population growth, manufacturing growth and oil sands development continue to point to a strong Alberta economy. When the good weather does arrive, we are likely to see the real estate market ramp up even more.

Alberta’s population reached 4 million last year, an average growth rate of 3.4%, almost three times that of the rest of Canada.

That growth creates the need for schools, hospitals, roads and infrastructure. The development of that infrastructure creates jobs and more economic activity. And the cycle continues.

March 15, 2014 – Market Update

Mon, 07 Apr by Dale Russell

Spring is here.  At least in the Sylvan Lake housing market.  Strong sales in the first two weeks of March have us off to a great spring start, well ahead of last month and the first two weeks of March 2013.  There has been a nice increase in the number of active listings in the last two weeks, but they are still well down from a year ago.

Red Deer and Blackfalds inventories are low as well which is likely to cause prices to firm up as buyers across central Alberta face ever growing shortages.

All the good news in Alberta, especially when it comes to job creation, will almost certainly keep attracting large numbers of people to come here from the rest of Canada.  Population growth fuels the housing market like nothing else.

Alberta’s Job Market Revs UpTodd Hirsch, Chief Economist, ATB Financial – February’s job report puts to rest any lingering notions that Alberta’s labour market is shifting into lower gear. If anything, it may sound the alarm that the economy is galloping ahead too quickly. Last month, Alberta saw an increase of 18,800 new jobs (adjusted for seasonality)—the highest pace of monthly job creation in nearly three years, and well above the average gain of about 6,000 since the end of the 2009 recession.

The unemployment rate also dropped three-tenths of a percentage point to 4.3 per cent. The extraordinary performance in February brings the 12-month increase up 3.8 per cent to 82,300. Alberta now accounts for 87 per cent of all the jobs created in the entire country since February of last year.

Most of the new jobs in Alberta were in construction (+23,300), retail and wholesale trade (+7,300), and oil and gas (+6,800). These gains were partially offset by a drop in professional, scientific and technical occupations (-15,200), and health care and social assistance (-10,600). Three months ago, Alberta saw a one-month drop of nearly 10,000 jobs. That led to some concern about an economic slowdown. The longer term trend points to anything but.  With a falling unemployment rate and employment rising more quickly than the pool of available workers, the true worry could be that more Alberta employers will feel the pinch of labour shortages.

Trade deal good news for AlbertaTodd Hirsch, Chief Economist, ATB Financial – Canada’s new free trade deal with South Korea could be hugely beneficial to exporters, including those from Alberta. Prime Minister Stephen Harper signed the deal earlier this week.

With a population of more than 50 million, South Korea is nearly 50 per cent larger than Canada (population 35 million). Alberta has exported $2.9 billion in products to South Korea over the last five years—a miniscule amount when you consider total global exports over that period equalled $443.9 billion. But Koreans are becoming increasingly affluent and sophisticated, presenting Alberta exporters with lucrative opportunities.

The largest category of exports over the most recent five year period was natural resource products, notably coal and wood pulp (see graph). Machinery and mechanical appliances also made up a sizable portion (16.6 per cent). The big winners to come from the trade deal are Canadian farmers. Wheat and cereal grains make up more than 12 per cent of exports. Meat products account for another six per cent. Up until now, meat has faced high tariffs going into South Korea. With those trade barriers removed, Alberta farmers will be able to increase the volume of meat and other agricultural products they export overseas.

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