Dale Boddy's Look Real Estate Outlook:
Red Deer, January 2007.
In 2005 I was breathless with housing price increases, 10% overall increase in average prices over 2005 and 13% more for single family detached homes. It has been a great market. Prices doubled in 8 years, 1995 to 2003. And now, double digit increases in a single year. But 2006 prices increases blind-sided most of us?
In 2006 average prices increased 35% overall, and 36% for single family detached homes. But what did that mean in dollars? Prices went up about $10,000 a month, for a single family detached home and for property overall until September. October to December prices were basically flat.
Averages are also deceiving. Some homes went up even faster. Clean homes priced just above the market average sold quickly. And why not? Properties came on the market and sold. Every month until July, my count of month end listings were less than half of 2005 listings. This stopped in September, and prices flattened. But take a look at how builders did
Builders had their best year since 2002, taking out 166 million dollars in permits, 23% more than in 2002. Overall, the 2006 Red Deer housing market totaled 677 million dollars, 43% more than in 2005. The economy is doing very, very well. So how come?
OIL! Oil was around $60 per barrel at year end, 2006. On September 11, 2001 oil was priced below $25 per barrel (2006 prices) and has been steadily rising since then. During this time housing costs increased steadily, confidently. Suddenly, prices jumped, rising quickly at the end of 2005 and going ballistic for most of 2006.
So what’s next? The world seems to be coping with $60 per barrel oil. Fighting in Iraq is not slowing down. China and Asia continue to experience strong growth. Growing economies use up ever increasing amounts of oil. And Alberta is major supplier. Economists see Canadian growth slowing for 2007 and moderating in Alberta. But we will still see continued labour shortages and strong consumer demand. And consumers demand better and better housing.
But who out there is not asking, How long can (will) this last? Haven’t you?
Ask for Dale B: phone 346-6798 @ home, 318-2402 @ cell or 346-0021 @ pager or dale@reddeerproperties.com. Information supplied by members of the Red Deer and District Real Estate Board. While sources are believed reliable, verify before relying on it. Dale Boddy's Real Estate OUTLOOK: Red Deer; Current Edition. Dale Boddy's Real Estate OUTLOOK: Red Deer March 2007. Dale Boddy's Real Estate OUTLOOK: Red Deer November 2006. Dale Boddy's Real Estate OUTLOOK: Red Deer 2007. Dale Boddy's Real Estate OUTLOOK: Red Deer 2005. Dale Boddy's Real Estate OUTLOOK: Red Deer 2004. Dale Boddy's Real Estate OUTLOOK: Red Deer 2003. Dale Boddy's Real Estate OUTLOOK: Red Deer 2002.
