May 15, 2014 – Market Update

Wed, 21 May 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.