DECEMBER 2020 MARKET UPDATE
Market activity slowed down in December as we would expect it to, however sales stayed positive and we surpassed December of 2019 which is a great sign. The vibe moving into 2021 certainly seems positive, and I think there’s potential for another active year in real estate despite everything that’s still happening in the world. Here’s the overall market snapshot for Red Deer:
- Sales were up 17 units in December compared to 2019 (or 19%)
- Active listings are down by 80 units compared to 2019 (or 15%)
- Absorption rate sits at 19% for December, just squeezing back into buyer’s market territory.
- There were 3 sales for single family homes over $600,000 in December. One at $660,000, another at $725,000, and another at $1,025,000.
- Single family homes from $200k – $300k saw 47% of the inventory sell in December, a price point that continues to stay very active.
- There are very few homes under $200k on the market, with only 7 active listings on the market.
- Single family homes from $400-$500k had another strong month, selling 34% of the inventory.
- All single family home markets under $500,000 were in seller’s market sale ranges in December, a rare sight in our market in the last 5 years.
2020 failed to surpass 2019 in overall sales by only 2.6% (or 33 sales). Considering sales were down in April and May by nearly 50% due to the first COVID lockdowns, we were able to make up a lot of ground in the later months. I am forecasting that we should see a slight increase in sales and activity in 2021 assuming interest rates stay where they are. Future lockdowns, if required, could also have an impact on sales activity if it forces further layoffs and unemployment, however I believe we’ve experienced the worst of that already in 2020.
Real estate is a reasonably stable asset in that takes time for property values to shift significantly even with major economic events. After a difficult year in 2010, the market started to improve in 2011 but we didn’t see noticeable changes in property values until closer to 2013. After oil prices started to collapse in late 2014, we didn’t start to see significant drops in property values until closer to 2017. While the current economic state in Alberta makes it highly unlikely we’ll see any type of major increase in the market, homes under $600,000 stabilized in the last 6 months of 2020, and if we continue to see the demand we’ve been experiencing, it’s possible we might see prices start to creep up just a touch in 2021. I don’t anticipate the same reaction for condos and luxury properties, as demand in those markets just doesn’t exist at the same level.
Residential Acreage Stats:
- Acreage sales fell off in December, with only 4 total sales in Red Deer County in December.
- Sale prices ranged from $308,000 to $937,500.
- The highest sale at $937,500 was originally listed in 2017 for $1,249,000.
- Of 17 sales in December, 11 were part of a condo
- There are 101 active listings currently, 45 of which are part of a condo
- Listing prices range from $112,500 to $519,900 while sales range from $122,000 to $365,000
Surrounding Community Snapshot:
Current Active Listings – 78
Sales in Dec - 17
Likelihood to Sell – 21.7% (balanced market)
Current Active Listings – 120
Sales in Dec - 26
Likelihood to Sell – 21.6% (balanced market)
Current Active Listings – 27
Sales in Dec – 6
Likelihood to Sell – 22% (balanced market)