Real estate and oil. Just like most everything else in Alberta, they go hand in hand.
First, though, let’s talk about the real estate market in 2014. In a word, fantastic. We saw records set in many areas: the most MLS® sales with 1,697; the most single-family home and condo sales with 1,290 and 407 respectfully; and – most significant – the highest average sales prices for single family homes at $428,000 and the overall market at $387,000.
So now let’s look ahead to 2015. I would like to start by saying that I often get asked what the market is going to do. I have a stock answer: My crystal ball is perpetually broken. We live in a world today where we get instant information and with that, things can change on a dime. A great example is, of course, oil. Six months ago we were enjoying $100-a-barrel prices and as I write this, we are down in the $40s. Since our economy is dependent on oil, how will this affect the real estate market?
The first thing we have seen is a rise in inventory. On Jan. 1, 2015, Airdrie had 170 active MLS® listings. At the end of January, that number was 290. While we always see a spike in new listings after the holidays, generally it is not this many. However, the month ended with a similar number of MLS® sales as in January last year, which is positive especially considering January 2014 was a strong month. The bad news is that it looks as if we will have a significant decrease in average sales price, but there were a lot of condos sold so the product mix certainly brought the average price down.
Well, enough stats, since I’m sure some of you are starting to fall asleep. I have never been afraid to give my opinion so here’s how I see what’s ahead.
While I certainly see a slow-down compared to 2014 due to the low oil prices, I personally believe that Airdrie is in a great position to weather the storm. Airdrie is one of the fastest growing communities in Alberta, if not the fastest. Part of the reason we grow at a rate of 12 people a day – with half of those people coming from Calgary – is because we have everything we need right here. The days of having to drive to Calgary for our general and frivolous needs are over.
However, we are still a more affordable city than Calgary. In fact the typical home in Airdrie is approximately $130,000 cheaper than our neighbours to the south. My belief is we will continue to see more and more Calgarians move to our city because they can offer their families more for a lot less money and still have a reasonable drive to work.
All this being said, only time will tell. Who knows, in six months we may have a rapid increase in oil prices like the recent decline and then it will be business back to normal.
But as I said earlier … my crystal ball is broken!
Homelife is a new column in airdrielife. Each issue a local realtor will discuss the Airdrie real estate market and provide their own advice and opinions.