Why Buying a Red Deer Home in This Economy Makes Sense!

There is no avoiding the news about the current instability of Alberta’s economy and the challenges faced by the oil and gas sector. There is no need to sugarcoat it either. That’s not what we’re here to do. Instead, we’re going to shed some light on how the current economy, for all of its adversity, has presented an unprecedented opportunity for new homebuyers. Big industry may be turbulent at the moment, but individuals and family units looking for a place to invest in, and call home, will come out on top if they have the right guidance.  

5 Reasons Why Now is the Perfect Time to Buy a Red Deer Home

1. You Can Lock in Mortgage Rates at Historically Low Levels

Have you ever heard someone make a statement about local real estate that started with “I wish I bought a home back in…”? Do you want to be one of them in five or ten years? Certainly not. With mortgage rates at all-time lows prospective homeowners are able to lock in rates that they are not able to attain when Alberta’s economy is booming. When the economic landscape of the province returns to make Red Deer the economic capital of Canada that it always has been, those that lock in their mortgage rates now will forever remember this year as the one when opportunity knocked and when they opened the door.

2. Sellers Are Far More Likely to Accept Your Offer

The economic challenges faced by the energy sector and its impact upon the Central Alberta housing market are clear. Demand is low, vacancies are up, supply is high, and sellers are scrambling, vying for your bid. They know that the house down the block is doing the same. The new construction wave of single detached family homes from years prior have increased supply significantly, leaving a proverbial pick of the litter for interested parties. With options available to buyers, sellers are realizing that they may not be able to stick to listing prices that they set back in 2014.

On the flip side, it is important to note that in 2015 (and anticipated for 2016) housing starts are on the decline because of the growth from the year/s before. In October, the Canadian Mortgage & Housing Corp (CMHC) stated:

“The decline is due to an increase in the number of new homes available” (Richard Cho, Principal Market Analyst – CMHC Calgary, AB)

Simply put, the future will not hold the same level of housing inventory which can cause prices to rise, and thus it is not advisable to wait too long.

3. You Can Call the Shots on Complementary Services and Concessions

The drop in interest rates has opened up the opportunity to borrow additional funds for complementary materials and services that often accompany a new home purchase. For example, you may have renovations on the mind for your prospective home. You may also be moving to the Red Deer area for the first time, and need new furnishings. All of this becomes more immediately accessible via funds acquired through low rates of borrowing.

In addition, your leverage with sellers increases for concessions, so feel free to ask the seller to chip-in for closing costs. You may even inquire about the interior design, decor, and furnishing. Energy sector executives leaving Red Deer likely have no intent on taking their furniture and entertainment systems with them. Instead of them selling these items, they are likely to sweeten the pot by throwing them into the purchase of the home at no cost. All of a sudden your design, decorating, and furnishing expenses are dramatically reduced. Bottom line, as a buyer you can swing for the fences with your requests when the economy is as it is.

4. Rental Market Begins to Gouge Tenants – Better to Buy

Those that bought homes beyond their means during economic highlife have sold and are now on the rental market. Those households recently moving to the area have also bought into the negative hype and are also averse to buying. This boosts the demand for rentals. Law of supply and demand kicks in, and drives up the price. All of a sudden what seemed to be the most viable option becomes and an opportunity for landlords to squeeze every possible penny out of rental accommodations. Don’t reinforce this process, and instead put that monthly expenditure towards a mortgage.

5. What Goes Down Must Come Up

The demand for oil and gas isn’t going anywhere soon. Over a year ago Central Alberta was a dominant economic force in North America and it will take back its inevitable status. In addition, other industries in Central Alberta are certain to bounce back even stronger. A recent career fair in Alberta evidenced that executives and graduates alike are turning to the growing agricultural sector while waiting for energy to return to form:

“Agriculture’s been picking up the past couple of years so there’s been a lot of interest in agriculture, as you can tell by the booths here.” (Joshua Spies, Field Biologist, Syngenta)

As 2015 passes into 2016 consumer confidence is likely to return as well, and with it the retail sector too will grow in Central Alberta. All of this, and everything above, validates that the time to strike on your new home purchase is now, before prices and rates coincide with our province’s return to glory.

While buying a home in this economy is advisable, it must be done with the proper guidance. You will need a real estate team that understands your needs, respects your budget, and will deliver your offer in a manner that sellers cannot resist. Whether you are ready to buy, or have any questions whatsoever, feel free to call the Dusty Smith Real Estate Team at 403-347-0744 or contact us here anytime.

Tags: homes for sale in red deer, reasons to buy a red deer home now, red deer economy, red deer mortgage rates, red deer real estate