The Altario Quarterly (Jan-15)

The Camrose housing market, Q4 2014

Click HERE to read the entire January, 2015 newsletter, including graphs and Camrose rental and building stats

Happy New Year, everyone!  Or will it be so in the real estate market?
 

I think we all knew that a slowdown of some sort was inevitable but I’m not sure anyone thought it would be so sudden – it’s as if someone flipped a switch on November 1 and created a landscape that was so radically different from the one in which we had all operated for the year prior that it’s virtually unrecognizable.  I don’t think I’m going out on a limb by saying that the dramatic fall in oil prices and some of the other uncertainties in Alberta and the world have changed people’s thinking in a very substantial way and this change is permeating decision-making at every level. 
 

There were 64 sales of improved (i.e., the figure excludes vacant land) properties in Camrose in Q4, which is about average for Q4, but 31 of those 64 sales occurred in October and another 23 in November, leaving only 10 for December.  This low level of activity does, of course, come on the heels of some torrid market activity over the 12-month period ending October 31 but the question is whether it’s indicative of a trend, particularly if oil prices remain low for some time. 
 

We in the appraisal business are naturally affected by changes in market conditions as well and readers might find it interesting to note that our office experienced its slowest-ever 2-month period (in the three years since I took over the business) in November/December in terms of new appraisal orders.  I called one of the appraisal management companies in Toronto to ask whether this was specific to us or to our region and he advised that appraisal orders throughout Canada had dropped anywhere from 20-30% in the time frame I’m describing here.  So, it’s not just a Camrose issue or even just an Alberta issue – it’s country-wide and it remains to be seen how it continues to manifest.
 

Highlights of Q4 2014:

• the 5^th-highest mean (average) price, at $284,614 for any quarter since 2003

• the highest rolling 12-month mean price ever (a record yet again):  $295,399, which represents an increase of 1.5% over the last quarter ($290,895), an increase of 6.3% vs. Q4 2013; however, the rate of increase is somewhat less than that between Q3

• 2013 and Q3 2014 (6.3% vs. 6.5%) and it’ll be interesting to watch this particular trend over the next year relative to the slowdown we now appear to be experiencing

• the 7^th-highest median price ever:  $280,000, which is down from $288,250 in Q3 but up from $265,000 in Q4 2013; the median price in Q1 2008 was $284,900 (note that this is not a rolling average)

• in Camrose, there have been 55 sales of over $400,000 during the past 12 months vs. only 35 sales during the 12 months ending on December 31, 2013; in Q4, there were nine such sales:  four of them occurred in October, three of them in November, and two of them in December

Overall, the graph in the newsletter shows a continued upward trend but, because the trend line represents a rolling 12-month average of mean prices, very little of the questionable market in Q4 is represented there, so this will be the indicator on which to keep an eye.  As this is written, there are 73 residential properties on the market in Camrose via MLS (on the Central Alberta board and the Edmonton board combined), excluding vacant land (vs. 114 at the beginning of October).  If we consider this relative to the 64 sales that occurred in Q4 2014, supply and demand are still in balance, but with a slight bias toward oversupply.  If so, we shouldn’t expect prices to rise over the next while, but neither should they fall to any extent.  That would be the case only if what we’ve seen in the latter stages of 2014 continues apace.

Miscellaneous

In Q4 2014, we recorded 57 sales in the small towns of the area we track daily (as far north as Ryley, Holden, and Viking in Beaver County, as far east as Hughenden in the MD of Provost, as far south as Veteran in the County of Paintearth and as far west as Bittern Lake).  There were 272 total sales in 2014 vs. 239 in 2013.

In Q4 2014, we recorded 20 acreage sales (in all of Camrose and Flagstaff Counties, as well as in the north part of the County of Stettler, the east part of the County of Wetaskiwin, and the southernmost part of the County of Beaver), for a 2014 total of 111.  This contrasts to 109 in 2013.

2014 was a very significant year in terms of change of ownership of downtown commercial property, the likes of which I’ve not seen in my 12-year appraisal career: 7 properties changed hands, including two private ones of which I’m aware – there were almost certainly more private sales than that; this represents a true generational shift in downtown Camrose.

Both Camrose mobile home parks transferred to new ownership in early 2014.

We have records of seven industrial or commercial land sales in 2014; Camrose continues to experience a paucity of industrial land at present, although there were  several industrial-commercial projects initiated in 2014.