After dodging the bullet for more than 18 months from the provincewide economic downturn, the home resale market in Innisfail, Penhold and Bowden is now bending from recessionary blows.
The number of home sales in all three communities, along with total sales volumes, has dropped significantly for the first seven months of the year when compared to statistics from the same period in 2015.
As well, there has been a sharp increase in the number of active residential listings, creating a buyer's market but also reflective of increased worry over the economy. Last week, a report released nationally by TD Economics said the current recession in Alberta may go down as one of the worst in the province's history, with recovery at least two years away.
“It takes a while for everything to trickle down. Consumers were feeling the pain earlier and I think they are just continuing to feel it,” said Sandi Gouchie, president of Central Alberta Realtors Association (CARA), which released its latest market statistics this month. “We talked to people and they were ready to hold on for a little while, but now some people just can't hold on anymore.”
The July 15 CARA report for the Central Alberta region said there were 463 residential units sold in June, a drop of almost 15 per cent from a year ago. The dollar value of those sales -- $142.5 million – was a 19.4 per cent decrease from June of 2015.
In the region, the latest CARA statistics show 56 homes have been sold in Innisfail from Jan. 1 to July 20 of this year for a total sales volume of almost $15.2 million. That compares to 72 with a total sales volume of just over $18.3 million for the same period in 2015. In Penhold, 43 homes with a total value of more than $12.3 million were sold in the same time frame. In 2015, Penhold recorded 53 home sales worth almost $16.2 million. So far this year homebuyers have only purchased one home in Bowden and that was valued at $250,000. Last year, there were eight homes sold in Bowden during the first seven months for a total value of almost $1.8 million.
CARA's statistics also show there is an increase of almost 16 per cent in the number of active residential listings in the Central Alberta region this year compared to those shown for the first six months of 2015.
For the first seven months of this year there were a total of 484 listings in Innisfail, compared to 398 during the same time period in 2015. In Penhold a total of 340 home listings have been listed this year, compared to 229 during the first seven months of 2015. And in Bowden, the CARA statistics show there have been 90 home listings so far in 2016, compared to 57 during the same period in 2015.
“Of course the housing market concerns us. We like to see an active and busy housing market,” said Innisfail mayor Brian Spiller. “It usually indicates an active and busy town. When something like this is going on we are of course concerned.”
Penhold mayor Dennis Cooper echoes Spiller's concern but added his community, along with Lacombe, is still well positioned in the Central Alberta region to weather the recessionary storm.
“Penhold and Lacombe seem to be the two (places) where a house comes onto the market it turns. If it's priced appropriately it turns fairly well,” said Cooper.
He also pointed out the town recently received positive news from Melcor Developments Ltd. that the company's long anticipated manufactured home park for the Oxford Landing subdivision will move forward. Town officials have long been waiting for the 9.95-hectare project to go ahead and provide up to 188 affordable housing units for the community.
“There are a number of people who may be looking at downsizing and moving towards a manufactured home. It also allows them to be snowbirds and take off, and they don't have to worry about flooded basements and a lot of things. There are a number of people looking and waiting for that,” said Cooper, adding the project is still in the planning stage.
In the meantime, Gouchie said there is a feeling in her industry that Alberta consumers are just being “cautious”, waiting to see some stability in Alberta before making big home buying or selling decisions. She added there is nothing to indicate from what her clients have been saying that there will be “mad exodus” to move outside the province.
“As long as people have jobs they don't like to leave their areas. It's not something they want to do,” she said, adding that despite the gloomy news reports it's a good time for citizens to buy new homes.
“Money is still cheap to borrow. It has always made more sense to pay your own mortgage then somebody's rent,” said Gouchie. “I think we are still in that mentality here that it is still king to own your own land.”
Innisfail mayor Brian Spiller
"We like to see an active and busy housing market. It usually indicates an active and busy town. When something like this is going on we are of course concerned."
