Comeback For Fort McMurray Real Estate

The Alberta real estate market has been celebrated throughout the coronavirus pandemic for maintaining one of the most affordable markets in the country. However, now that first-time homebuyers sniffed the opportunity out west and the energy sector is booming again, prices are rising throughout the province. Suffice it to say, prices are only going up, from Edmonton to Calgary to Fort McMurray.

Fort McMurray is booming right now, thanks to an overall tight housing sector. Still, it is much different from a couple of years ago when the Fort McMurray real estate market had witnessed falling prices due to the financial crisis.

Fort McMurray is reporting impressive numbers, perhaps some of the best in the entire provincial real estate market.

Fort Mac’s Comeback

According to the Alberta Real Estate Association (AREA), residential property sales advanced at an annualized rate of 10.4 per cent in May, totalling 138 units. Last month’s robust performance contributed to the impressive 17.9 per cent year-to-date growth in the Fort McMurray real estate market.

Prices inched higher in May, with the total residential average price rising 1.9 per cent year-over-year to $445,154. What made the price gains noteworthy was the fact that every property type experienced impressive gains.

Here is a look at the different residential properties and their year-over-year gains:

• Single-Family Detached: +2.6 per cent to $565,847
• Semi-Detached: +14.9 per cent to $427,161
• Townhome: +7.8 per cent to $258,000
• Apartment: +25 per cent to $156,861

Supply has been a mixed bag. Although conditions continue to be the tightest in more than a decade, the latest numbers suggest that relief could be coming to Fort McMurray.

The number of new residential listings soared at an annualized pace of 58.6 per cent, totalling 287 units. Active residential listings jumped 17.8 per cent to 482 units in May. The number of months of inventory, which measures the number of months it would take to exhaust current supply levels at the present sales activity rate, rose to 3.49 months.

New housing construction activity has been lacklustre, with housing starts totalling 22 units in April, according to the Canada Mortgage and Housing Corporation (CMHC). Year-to-date, there have been 29 housing starts.

In a statement following the latest Calgary real estate market, Calgary Real Estate Board (CREB) chief economist Anna-Marie Lurie argued that the housing sector remained strong because of limited supply choice. The same reasoning can be seen in Fort McMurray.

How’s the Rest of Alberta Doing?

Interestingly, Fort McMurray is doing better than the broader Alberta real estate market. A look at the province-wide housing market shows a few things on a year-over-year basis:

• Sales: +1 per cent
• New listings: +3.9 per cent
• Active listings: -16.6 per cent
• Months of supply: 2.38

Moreover, the average sale price for an apartment is down 2.3 per cent to just above $259,000.

Suffice it to say; Fort McMurray is a healthier real estate market for both buyers and sellers.

The Economic Recovery

Many market analysts believe that the overall Alberta real estate market will survive the multiple rounds of interest rate hikes, mainly because of the rebounding economy that has been driven by the resurgence in the red-hot energy sector.

This is particularly true of Fort McMurray, the home of Canada’s lucrative oil sands development. With crude oil prices topping $120 a barrel and the world’s strong demand for petroleum products, Fort McMurray and the broader region will benefit economically from the current inflationary situation.

The northeast Alberta oil boomtown is ready.

“We’re ready for it. We’re ready to up production here. I’m pretty confident in our region and our ability to do so,” said new Mayor Sandy Bowman in a recent interview with CTV News Edmonton. “There’s definitely a labour shortage. We need workers. There’s lots of work here, and we’re ready to take on new residents.”

“Infrastructure-wise, I think we’re ready. I hope to see an influx of new families moving to the region,” she added.

Indeed, the numbers show that Canadians are relocating to Alberta. Last year, more people moved to Alberta than any other province in the country due to affordability, economic opportunities, and reported work-life balance.

Fort McMurray and the broader province are potentially on track to lead the nation. Don’t believe it? Consider this report from CBC News:

“According to the Conference Board of Canada, Alberta is projected to lead the country in economic growth in both 2022 and 2023 due to surging commodity prices. With some success, the province is also working to diversify its economy — both Calgary and Edmonton have seen rapid growth in their local tech scenes.”