Stable housing market predicted for Okotoks
Real Estate: Sales, listings expected to improve with economic recovery in 2018
Wednesday, Feb 21, 2018 06:00 am
While housing prices in Okotoks fell slightly last year, local realtors say the outlook for 2018 is a more steady market.
“It should be pretty stable and a little bumpy,” said Jacky van der Ven of CIR Realty Okotoks.
According to the Calgary Real Estate Board’s (CREB) 2018 forecast report, improving economic conditions should lead to a rise in activity in real estate for the Foothills region. Sales in Okotoks are predicted to be similar to 2017, but the report indicates they will be influenced by new homes being built in town.
Van der Ven said she’s not surprised to hear 2018 will be similar to last year, adding she expects benchmark prices to hold fairly still. With the economy slowly recovering, there could be some improvements for real estate this year, she said.
“It’s pretty slow right now, but I have quite a few clients that are getting ready – getting ready to list and getting ready to buy,” said van der Ven. “That’s pretty normal for the time of year.”
The economy will play a large role in how the housing market unfolds in 2018, she said. With more jobs coming online and oil prices improving, van der Ven said everything seems to be moving in the right direction. Hopefully, the housing market will follow suit, she said. The current inventory in Okotoks of more than 200 active listings is more than average, she said. With that number of homes for sale, van der Ven said the expected number of days on the market is 66. The absorption rate – how long it would take to sell everything currently for sale – is six months, but van der Ven said it should be about three-and-a-half months in Okotoks.
“It’s more inventory than we should have,” she said.
A lot of the issues lie in the condominium market, specifically with townhouses, said van der Ven because a lot of buyers have opted for single-family homes over condos. Falling prices and the addition of condo fees makes owning a single-detached home more feasible, she explained.
The situation could change with new mortgage rules announced in the fall, which will require buyers to undergo a new stress test for uninsured mortgages, requiring lenders to enhance loan-to-value measurements and limits to respond to risk, and placing restrictions on lending arrangements that could circumvent the loan-to-value limits.
“With the change in the interest qualifications, more people might have to buy a more affordable condo,” said van der Ven. “Because of the change in the mortgage rules where people have a harder time to qualify, they might go to those townhouses where that’s all they can afford.”
The CREB report also stated housing starts in Okotoks climbed in 2017 over 2016, which resulted in an increase of new-home inventories. This could drive down sales on pre-owned homes, according to the report.
Rob Mueller, Okotoks permit/inspection/assessment manager, said the number of new houses built in 2017 rose to 185, from 108 in 2016.
“There’s a significant jump there in residential single-detached dwellings,” he said.
The overall construction value in Okotoks in 2017 was up about $8 million, including commercial and industrial projects, said Mueller. With new neighbourhoods like D’Arcy and Wind Walk getting underway this year, he said the vacant residential inventory has increased. For 2018 the Town is predicting about 200 housing starts, said Mueller.
He said this prediction is largely based on the Canada Mortgage and Housing Corporation’s estimation of two per cent growth for Alberta communities. That number constitutes normal growth, he said.
Ultimately, he said there are a lot of variables that will determine whether lots will be developed.
“Even though you have the inventory, does that open an invitation that everybody should come, or is it still based on the economy and what’s happening with the energy sector, and what other influences inspire people to want to buy a new house here?” said Mueller. “We’re just trying to predict what the economy is trying to do out there.”