Like many sectors in Alberta, the downturn has taken its toll on real estate, however, there may be some positive signs in Drumheller.
Realtor at Century 21Power Realty, Stacey Gallagher reports there were 97 active listings in January, the lowest in 12 months, and the pace of sales appear to be on par with previous years, with 8 sold.
“We had an upswing in 2006-2007 just like the rest of Alberta and the numbers from 2016 are showing a downswing in prices. I think this is just a reflection of what is happening in Alberta as a whole, She said. “We feel the ripples for sure, but they are not as large or as quick to come to Drumheller like in the larger centres such as Calgary, Edmonton, or Fort McMurray.” She explains lower inventory levels can be expected this time of year.
“Low inventory in December, January and February is quite typical. There are usually fewer buyers, but also less sellers want to move this time of year, so they will remove their homes from the market causing a bit of a shortage,” she said.
There are a number of factors that can make the market sluggish, including unrealistic expectations by sellers.
“If sellers are unrealistic about what’s going on and unwilling to make the price correction ahead of a down market, they will quickly get left behind and in turn, we are left with inventory which is overpriced,” she said. “I am seeing quite a bit of that right now which is causing the on market to go up, and it appears to the public as though there are lots sitting on the market and that things are not selling. That’s not necessarily the case.”
Recent changes to financing regulations have also appeared to have affected the market.
“I am finding there are less sales above the $250,000 - $300,000 marks and more options below $100,000 than there has been in a while. The price range people are able to afford and or want to be in has taken a hit since the government made changes to financing rules in October. I think that has a lot to do with the falling prices,” she said. “Financing, in general, is continually getting harder and harder to come by. CMHC fees are on the rise, down payment requirements are getting higher and credit and employment requirements are getting tighter if you are looking to get a mortgage.”
While it is impossible to predict the market, she indicates that Drumheller appears to be stable.
“Small towns with three or fewer main economic drivers such as Hanna, or Carbon are taking a major hit right now. Drumheller has about five, so we are okay. I think there is still that bit of uncertainty with the future, and with the current government causing some hesitation,” she said. “I often get asked if I buy this house what will it be worth in 5 years? I can’t predict the future, so I have no idea but in Drumheller, if I had to make my best guess probably the same as what you paid for it... and if that’s the case it’s not the worst investment you could make.”