Colin Hartigan, Coldwell Banker United. Image via colinhartigan.com
FORT MCMURRAY — Fort McMurray’s real estate market is beginning to rebound, with housing inventory at a 10-year low as renewed confidence in the oilsands spurs higher demand.
Colin Hartigan, broker-owner of Coldwell Banker United and a realtor in Fort McMurray since 1997, says this summer has been incredibly busy for the local market.
He says the available number of single-family detached homes has fallen to its lowest level in a decade, while new listings were down 14.7 per cent year-to-date at the end of August.
“This summer has been more active than we’ve seen in a number of years,” said Hartigan. “We’re at the lowest inventory we’ve seen in 10 years, actually, when it comes to single-family detached homes.”
The tightening market is also beginning to show up in home values. The average price of a detached home was about $475,000 at the end of August, but still well below the roughly $770,000 Hartigan says homes reached during the previous boom.
“When supply is low, demand is increasing. Typically, you see price progression, right?” said Hartigan. “So we’re definitely seeing that in the market.”
Hartigan says the turnaround comes after a difficult decade for homeowners, during which some detached properties lost at least $200,000 in value and foreclosures became commonplace.
He says some of the fear created by that prolonged downturn is beginning to ease as confidence returns to the oilsands and people become more willing to make long-term decisions about living in the region.
Contractors Hartigan works with are busier and hiring, while he says people who left Fort McMurray but continued working in the region are starting to move their families back.
“People that maybe left during the wildfire and relocated with their families that commuted for those last 10 years have said enough’s enough, we’re coming back,” said Hartigan. “And I think that’s also very exciting.”
Hartigan says decisions by major employers to bring workers back to Fort McMurray are translating into additional housing demand.
“That’s part of what’s driving the market, is those types of decisions by the leaders in the region, the business leaders in our region, making Fort McMurray a priority again,” he said.
One piece still missing from the recovery is significant new home construction.
Hartigan says high construction costs make it difficult for builders to purchase land and build homes that can be sold profitably at current market values. Without additional construction, he says increasing demand will continue competing for a limited supply of existing homes.
“The cost of construction is still quite high, and that new construction market needs to get moving in order to really see this market progress,” said Hartigan.
For homeowners considering selling, the condition of a property can make a substantial difference. Hartigan says buyers are available for homes requiring little immediate work, while properties needing costly renovations remain a tougher sell.
“If you have a well-taken-care-of house ready to go, it’s going to move quickly, for sure, in the market right now,” he said.
Signs of recovery are also appearing in the condominium market.
Hartigan points to apartment-style condos that once sold for about $450,000 before falling as low as $190,000. Those properties have recovered to around $260,000 to $265,000, while a two-bedroom apartment can rent for about $2,000 a month.
He says outside investment has yet to return in a significant way, but local investors are buying properties and younger residents are showing interest in purchasing their first rentals.
For Hartigan, that local investment represents more than another source of demand. He sees it as evidence of a changing attitude toward the community after years when many workers regarded Fort McMurray as a temporary stop.
“I think there was a time where people said, I have a five-year plan. Fort McMurray was a five-year plan,” said Hartigan. “The next generation coming behind us, it’s not a five-year plan.”
“They see this as a lifetime decision to stay in our region, invest in it, and stay here.”
Hartigan says the market remains far from its previous boom-era highs, but believes the combination of limited housing supply, returning residents and renewed confidence in the region is creating opportunities for buyers, sellers and investors.
“The last 10 years have been tough, let me tell you, but we survived it,” he said. “People of Fort McMurray are resilient. I think there’s lots of opportunity ahead. I think there’s opportunity for investment.”
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