So many people have ask me if real estate prices have dropped in Central Alberta since oil prices started their decline. People imagine a slower real estate market is directly related to pricing. People assume if less homes sell, prices must also drop – but that isn’t necessarily true. Because of the confusion, and because every local market is different, I decided to investigate.
Below i’ve charted the average price of homes in Central Alberta over the last five years and the last 2.5 years to compare.
I charted average home prices in Central Alberta over the last five years and measured them two ways. Compare the average home price sold in the month of January 2011 with September 2016 and prices have increased 21.9%. This measurement gives a less accurate outlook because one individual month can be skewed by a few higher priced homes selling. Comparing the average sale price over a 5 month period, 5 years ago and the average over the last 5 months should give us the best representation of price change. Measuring this way showed an average price increase of 17.4%
June 2014 is the month oil prices started declining world wide (chart courtesy of InfoMine.com below) and people really want to know what’s happened since. If you look at the chart below you’ll see the price
of homes sold in Central Alberta has practically remained the same since June 2014. Working out the average like we did over the 5 year span we fin prices have actually risen 0.06%. We should always hope for increases exceeding 1% each year but considering our economy, anything better than a drop is excellent.