Are We Balanced Yet?

2011 has been a transition year for sure.  Coming off of string buyer market conditions we are beginning to see signs of balanced market conditions.  However we’re not fully there yet.  Not all price ranges are displaying the same market conditions and regionally the hyper local real estate markets are vastly different.  For now I’ll be focusing on Red Deer.

November 2011 is seasonally a slower month.  Typically residential MLS sales volume for Red Deer declines as we get closer to Christmas.  Majority of people seem to be content with being settled for Christmas.  However sales occur daily and monthly throughout the year and November is no exception.

November 2011 Red Deer residential MLS sales volume was 11.5% higher than the sales recorded for November in 2010, 126 and 110 sales reported respectively.  If your home is on the market and not in the sold category you may be saying “what gives?”.  Here is where the sales were according to price range:

If your home is priced around the $300,000 price point, odds are you’ve been getting some viewing activity.  That is certainly the busier price range.  Conversely if you have a home priced above $550,000 November was a test of patience as it was a quiet month for sales in higher end homes.

Last year compared to this year was a bit more balanced with sales in more price ranges, however the January 1st to December 31st sales for Red Deer 2010 was 1376 homes sold compared to November YTD 2011 numbers of 1479.  YTD sales for Red Deer residential have already surpassed 2010 levels and year over year Red Deer residential MLS sales have increased by 25.49%.

November versus November for Red Deer residential MLS sales looked like:

All Stats are compiled from the Central Alberta REALTORS Association MLS data.  As you can see above, both 2010 and 2011 have good volume, I like to see the total volume up as well as all price ranges.  The higher end ranges just don’t have as many buyers right now.

Is Red Deer balanced? Here is a closer look at the trend with New Listings:

Compare that to the Sales trend:

So in summary,

No we’re not quite balanced yet.  We are much closer than last year and headed that way.  Typically a balanced market is characterized by displaying listing to sale ratios 60 – 75%.  The Sales to Listing ratio trends the last few years has been:

It’s interesting to see the positive trend to finish the year.  A strong finish is god and typically sets the pace for how the new year will trend.  Are you still on the fence with your real estate purchase decisions?  It can be distracting to follow global economic markets.  Real estate markets are a direct reflection of the economy as without strong employment and wages house sales simply do not occur.

The impact of the economic downturn and the impact increasing listing inventory has had might best be seen as a linear chart like below:

Your Friend in Real Estate,

Patrick Galesloot

twitter:  @pgalesloot

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