IS IT ALL HYPE?
You are hearing a lot of how hot the real estate market is. Yes things are finally selling. After a few years of slow sales and a year of covid homes are selling. It is a very positive start to 2021.
BUT if you look closely at some of the numbers it tells a slightly different picture. I usually look at a few numbers to see the health of the market.
1 - percentage of sales to active listings - In January and February of this year we saw 13% in January and 17% of currently listed properties sell. That may sound low but it is quite normal in Red Deer - NORMAL. Last year in 2020 there were 8% in both January and February sell so yes 2021 is starting out better. If you look at 2015 which was after the last boom in Alberta we saw 13% & 18% in January and February. So 2021 is in line with then
2 - Months of Inventory - This is how many months at the current rate of sales would it take to sell everything on the market without any new properties becoming available. In January of this year we had 7.89 months of housing inventory with February had 5.82. Last year we saw 13.23 and 12,18 months of inventory in January and February. Compare those to 2015 it was 7.49 and 6.18. 5 or 6 months is a healthy average market time.
3 - Sales to new listings ratio. This is the amount of sales per month compared to how many homes came to market. In January and February this year we saw 42% and 64% while last year we saw 27% and 33%. 2015 saw 32% in January and 42% in February. This is an important number for me. What it shows me is that while in January we saw 13% of the housing inventory sell there was 42% ratio to new homes becoming available. So with the 106 sales in January there were 255 new listings. 42% is a respectable number.
s it all hype? No, we are having a solid start to 2021 and its so good to see. I think we are getting back to respectable but I believe the increase in sale this year can be accredited to the slow first half of 2020. I believe 2020 will be ok. Sales will continue but be careful to believe some of the hype. So for buyers be careful not to get caught up in the hype, do not overpay. Sellers pricing your home is still the most important part of trying to sell. We are not in a speculative stage yet.
Is it all hype? No, we are having a solid start to 2021 and its so good to see.
If you ever need a realtor who is grounded and stays on top of the market connect with me,