Penhold continues to be a provincial housing market's diamond in the rough that is shining brightly through an increasingly overall dim and depressed Alberta economy.
For home sales, Penhold showed remarkable results in 2015, and new single-family housing starts are more than three times higher than in Innisfail, its neighbouring community that is almost three times larger.
The latest home sale report from the Central Alberta REALTORS Association (CARA) shows that 81 single-family dwellings were sold in Penhold in 2015, compared to 74 the year before, a 9.5 per cent increase. Sandi Gouchie, the new 2016 president of the association, said the total value of homes sales in Penhold last year was
$24,280,386, compared to $20,854,114 in 2014, a 20 per cent increase. She noted the average price of homes sold in 2015 increased 6.4 per cent, from $281,812 in 2014 to $299,758 in 2015.
As for housing starts, Penhold did experience a 14.3 per cent decrease in the number of new homes built in 2015 compared to 2014, said Rick Binnendyk, the town's chief administrative officer. He said there were 91 new single-family dwellings built last year with a total sales value of $18.4 million. That compares to 104 new starts in 2014 with a total value of $22.9 million.
However, while he was still pleased with 2015 figures for home starts, he noted 2016 will see the community offering homebuyers a new manufactured home option, with the cost of units being about $150,000, which is more attractive than spending an average of $240,000 for a typical single-family dwelling.
In the meantime, Penhold's solid performance in the housing market amidst the overall financial woes in the province has made it a desirable location to live, said Gouchie.
“You have a small community, very close to Red Deer. It is a quick commute. Location is always important,” she noted. “If I was a consumer those would be things I would be looking at. It would be where I would want to raise my family. For a lot of people it's a big importance.”
Innisfail, meanwhile, is lagging far behind Penhold's good fortune on the housing market.
Gouchie's home sales statistics for Innisfail show that 164 single-family dwellings were sold in Innisfail in 2014 but dropped by almost 29 per cent last year to 117. The total value of home sales in Innisfail last year was $29,475,915, compared to $44,040,798, a decrease of more than 34 per cent.
As for housing starts, Craig Teal, Innisfail's director of planning and operational services, said in 2015 there were 18 single-family dwellings or duplexes built in the town for a total value of just over $5 million. That is a 31 per cent decrease in unit numbers from 2014 when 26 were built. The total value for new starts last year was $5,002,341, almost $700,00 less than in 2014.
“Looking at it I would say it has been slowing in terms of new home construction. New home construction is part of the overall housing market. The other part of course being resales,” said Teal, whose department is responsible for building permits. “It is a reflection of broader economic circumstances.”
The broader real estate picture for Central Alberta shows residential sales in the region declining almost 35 per cent last month, compared to a year earlier, according to the latest CARA home sales report. It also said home sales for the entire province fell by more than 17 per cent during the same month compared to December 2014. The same report added the dollar value for home sales in the region for the last month of 2015 also fell 35 per cent compared to the same month of 2014. The dollar value of sales for all of Alberta declined by almost 18 per cent.
CARA is also reporting there were 2,117 active residential listings on the association's MLS system at the end of December, an increase of almost 21 per cent over the same month of 2014. The report adds there was 13.1 months of inventory at the end of last month, up from seven months from a year earlier. The number of months of inventory is the number of months the industry calculates it would take to sell existing housing stock at the current rate of sales activity.
With this increasing amount of unsold housing inventory in a depressed economic climate, it does not necessarily mean it will lead to dramatic cuts in the prices of housing for consumers, said Gouchie.
“We are not anticipating a big drop. I don't think we are going to see a huge decline in prices,” said Gouchie, adding that many sellers with listings may be opting just to “wait out” until the market improves.
“There is certainly a little bit of gloom. We would be silly to think that is not going to hurt us, but I still think there are good things happening in Alberta and we will be prepared for that,” she said, adding her advice for buyers and sellers is to build a relationship with a realtor who is knowledgeable about the market and the area. “I work in the Lacombe area and with all that is going on we are optimistic and we are seeing activity that we didn't expect to see. We are optimistic, cautiously.”
Sandi Gouchie, president of the Central Alberta REALTORS Association
"There is certainly a little bit of gloom. We would be silly to think that is not going to hurt us but I still think there are good things happening in Alberta and we will be prepared for that."
