ROAD TRIP!
Has anyone else noticed the volume of RV’s on the roads these days?!? We live a little off the beaten path—in a normal year. This year, there are travelers everywhere (aka slow highways). Add in the farm equipment with early harvests, and I strongly recommend packing your Patience with each road adventure!
But beyond summer vacay’s, there is an interesting anecdotal phenomenon happening. Almost every Real Estate Agent we know is reporting Buyers from Ontario and BC. We’ve now heard several stories of houses bought without anything more than a virtual viewing. I can’t prove inter-provincial in-migration with any stats yet. But when we hear similar stories in Cochrane, Calgary and Chestermere, the trend has already started.
Coming from a different part of the country, often means arriving with a completely different mindset. Our Ontario friends are absolutely thrilled!! They can get large, fully renovated homes, on multiple acres of land—for the price of a small outdated bungalow in Toronto. Oh yes, and rarely are there bidding wars! Some of our BC friends are shocked by the summer smoke this year – yes, well, so are the locals! But they are pleasantly surprised by the easy access to mountains and lakes, no PST, and great home choices (no land transfer taxes either!).
From outside Alberta, the numbers are continuing to make sense for both homebuyers and investors.
The July real estate stats continue to show momentum, outpacing historical averages, and full recovery back to 2014 values. That last bit won’t make sense if you’re from ON or BC, but it’s huge if you’ve weathered the storms here in AB! Sales are up 26% year-over-year from 2020 (and remember, July 2020 saw ridiculous pent-up home-buying demand). The average Benchmark price in Calgary is $460,100 – that’s a 10% increase year-over-year! Detached, Row houses and Semi-detached are all showing strong price points. Apartments are still in an oversupply issue, but their prices appear to have stabilized or show slight increases. And the deep discounts that were once common, are almost nowhere: sale price to list price ratio is 98%. Buyers can try to be picky, but they may lose out to other buyers who can see today’s value.
Even Alberta’s unemployment rate has now dropped down to 8.5%–which is below the rate at the start of the pandemic (8.7% in March of 2020). We fully acknowledge that there are a lot of confounding variables with employment numbers right now. Summer, Covid restrictions easing, the 4th Wave starting, and ongoing government financial support have all contributed to fewer people participating in the labour market. Employment stats are complicated these days!
We encourage our investor friends not to be overly mind-boggled by the minutiae, but instead turn their focus to the big picture. It’s a little like our summer road trips: we enjoy the journey, the destination, and a fresh perspective. As investors, sometimes we need to step back and look at those same “old” houses with a new perspective too. Outsiders can already see the recovery better than some of us Albertans; they definitely value Alberta properties and recognize the potential for strong investments.
