By Sheldon Spackman

2018 a ‘tough year’ for local real estate

Jan 2, 2019 | 2:30 PM

“It’s been a pretty tough past 12 months.”

That from Richard Pochylko, the newly-elected President of the Central Alberta Realtors Association (CARA) in describing 2018 for the local real estate industry.

Pochylko, who began his new role on January 1, has served on CARA’s board since 2015 and says the volume of sales last year is what stands out most for him.

“There were 1,331 properties sold inside the city of Red Deer in the last 12 months but 3,006 were listed for sale, so there was a lot of people that wanted to sell that were unable to do so,” he explains. “Prices declined year-over-year for a single family home about 2.9 per cent. For a duplex, it looked like about 5.2 per cent, for a townhouse it was down about 5.1 per cent and for a condo, an apartment unit it was down about 7.9 per cent.”

Pochylko anticipates 2019 to be a tough year as well.

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“It’s much more difficult for people to get mortgages with the federal stance on housing, so it’s tougher for people to get in at the ground level,” says Pochylko. “If you don’t have a good buyers or starter home market, then it’s tougher for people to move up. So I look for inventory levels to climb again as we go through the spring here and there will be some disappointment and prices don’t have much of an upside.”

In terms of prices, Pochylko says the average sale value for a detached home in Red Deer last year was $370,196, down about three per cent from 2017.

“It’s down about, probably a good 10-11 per cent from say 2015,” adds Pochylko. “One of the things that you run into now because people generally don’t buy a house and sell it in six months, they’re selling it three to five years later. So now we’re in that three to five year bracket from 2015 and you’ll sit down with people and their equity position has been eroded because the market’s been bad basically 2016, 2017 and 2018.”

Pochylko adds however it’s still a good long-term investment to own your own home.

“It (lower prices) helps people get in for sure but they just have to loosen-up a little bit of the restrictions that they have on mortgage qualifications to make it a little bit easier,” he exclaims. “I’m on the political action committee for the Central Alberta Realtors Board and we meet with the MLA’s in the fall which we did in November in Edmonton and that was one of the things that we discussed with them was that maybe it’s time for the provincial government to be looking at a housing strategy suited more towards Albertans.”

Pochylko says he knows lots of people who would love to be a home owner but are not quite able to qualify at the current levels they have to qualify at.

“I think there will be some changes made,” says Pochylko. “I’m really hoping that the NDP and the UCP and the Alberta Party, that all the parties are taking a look at what Albertans truly need and where they can possibly assist them or help them to get the ball rolling. It’s good for everybody when the housing market is good.”

Last year, Pochylko says the average sale of a home in western Canada generated $54,900 worth of money for the local economy.

“It’s the fact that when you buy a house, you’re probably going to buy some furniture or some appliances or window coverings or you’re going to do some renovations prior to sale,” he explains. “That’s the general impact of a house sale in the local economy, so when we lose say 400 sales, you’re talking about tens of millions of dollars that could have been generated for any local economy that is gone and that’s what we need people to realize.”

Despite the anticipation of another tough year, Pochylko is cautiously optimistic about the next 12 months.

“I think we’re probably going to be a little bit better off in 2019 than we were last year,” he forecasts. “I also believe that people will come to the realization that ‘Hey, this is where the market is today, so let’s just decide to do what we’re going to do with the information we have and move forward’. Not try to read too many things into it.”

Pochylko says all local realtors are hoping for a better year in 2019.

“We’re on the side of people that are buying and selling properties, we really want to see things get better,” he exclaims. “Everything I read tells me that it’s going to be a horrible year, which is partly why you think maybe it won’t be as bad as what they’re saying.”

MLS stats for Red Deer in 2018 indicate 3,006 homes were listed, with 1,331 homes being sold.

Average number of days on the market was 64, with the close price to list price ratio coming in at 97.1 per cent.

According to the MLS Market Summary for 2018, the average price of a single-detached home in Red Deer was $370,196, while semi-detached units saw an average price of $269,745.

The average price of a townhome in Red Deer was $201,467, while condo units saw an average price of $191,465 last year.