SUNDRE — A limited inventory coupled with a growing demand for recreational rural properties has helped increase selling prices in the area.
“The market has been a lot more buoyant for sure in the last year,” said Sarah Kennedy, a local real estate agent, when asked how she would describe the situation in Sundre and the surrounding region.
Properties have been selling closer to list price than just a couple of years ago — up to 97-plus per cent from about 94 per cent — with their average number of days on the market also coming down, Kennedy told The Albertan on Jan. 20.
While the local market seems to be faring relatively well, it certainly is not comparable to the situations seen in places like the Greater Toronto Area, B.C. or Calgary “where you’ve got super crazy hot markets,” she added.
“We haven’t seen any big price swings,” she said. “Although we have been seeing properties selling a lot closer to the list price.”
So, while there have been some noticeable changes, she said there have yet to materialize any “huge increases in main residential type properties.”
But at the same time that residential properties in town have experienced modest gains by selling closer to list price than in recent years, lots out in the countryside have seen a much bigger boost.
“We’ve seen some swings in acreages, where they’re selling at higher than previous (prices),” she said, adding properties boasting landscape features such as a river, pond or lake are becoming increasingly alluring, especially to the COVID-weary.
“It’s the ones that really have that kind of recreational type value to them. There’s much more appeal for that, because there seems to be a COVID appetite to get away from some of the bigger centres.
“We’re seeing people that are looking for changes — smaller towns, recreational properties, weekend getaways — those kinds of things.”
Places like Tall Timber RV Leisure Park in Sundre have also experienced a surge in sales, she said.
Price per acre increases significantly
“The biggest change has been just the price of an acre,” she said. “Two years ago, we were selling farm land and recreational type land at $3,000 to $3,500 an acre. And we’ve seen some go recently at $7,500 an acre.
"People have realized that they’re not making any more land, and the prices have definitely gone up for rural land.”
That all amounts to real estate currently being a seller’s market, especially for rural recreational acreages, she said.
“Huge at the moment,” she said. “Because there’s no inventory. That’s the other thing we’ve seen — the inventory’s all sold.”
However, that might place people who want to sell in a challenging situation. Since their properties are likely “to sell a lot quicker,” they need to have lined up a place to move to. But with such a limited inventory to choose from, “then they’re not making those decisions.”
So, heading into the spring, Kennedy said she hopes to see a lot more listings on the local market and added the red hot market in major metropolitan areas might even play to the advantage of rural jurisdictions.
“Calgary at the moment is booming,” she said, recounting a recent situation when 28 offers were made on one property in a single day on the market.
“There’s tons of frustrated buyers out there, and I think people are going to start looking at outside centres,” she said.
“So, I anticipate Sundre will have a very good year — I don’t think it’s going to be a crazy market like the Calgary market by any means. But I think we’re going to see a very strong real estate market,” she said, adding, “And who knew, in the midst of a pandemic. It’s probably one of the only positives that have come out of this.”
Correction inevitable but bubble not about to burst
Low interest rates have also helped play a part in fuelling this buoyant market, she said.
But for how long that might last, “who knows. Because I think inflation is going to kill us,” she said.
“Interest rates are going to have to go up at some point. There’ll be a correction at some point.”
When that happens, she said the impact will be felt far more severely by homeowners in metropolitan centres such as the GTA, where some properties have been getting $500,000 over the listed price on a four-bedroom house, than in a market like Sundre’s, which hasn’t seen any such affects in terms of exorbitant sales coming in far above listed prices.
“But that’s a nice thing,” she said. “Because if there is any major correction in the market in the next few years, we haven’t had those wide price swings. So, our correction will be very marginal and therefore you won’t have people with huge negative equity."
That means the local real estate market should for the foreseeable future remain in a relatively stable position.
“I’m not seeing that it’s going to burst any time soon,” she said, adding there seems to be a growing trend of many Canadians who are leaving provinces like Ontario, B.C. and Quebec to find greener pastures.
“They’re realizing they can sell and capitalize on that, and move somewhere that’s beautiful, sensible and affordable," she said.
