To stay on top of thing I have decided to pick a few stats each week regarding the Alberta economy. From the Alberta Finance Weekly update. These are not the most recent updates just ones that caught my attention.
The good.
In the labour market hourly wages have not shown any signs of weakness. Hourly wages in Alberta are up 4.5% this February year over year. I think high wages for the majority of people that remained employed in Alberta and record low interest rates are contributing factors to improving conditions in the real estate market over the last couple months.
The Bad.
Retail sales are down 6.3% in January. This is notable because there has been an expansion in the amount of retail space over the past few years, so I would guess that the downturn would feel worse than this in terms of same store sales.
The Ugly.
The number of rigs drilled is down 43.9% this Febraury comapred to last year. This is comparing to 2008 which the industry never recovered fully from the beating it took in 2007.
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3 comments:
good post. I take exception to your comment about "improving RE conditions". This is nonsensical spin from the industry. Feb is ALWAYS better than Jan, and Mar is ALWAYS better than Feb. What is interesting is YoY numbers, and those are cliffdiving.
This will turn out to be the lowest March sales in a very very long time. That is not a sign of strength. Any improvement you see now is simply seasonal. March through June is the high season for RE, and this year will be also, but it will be the worst year in a long time.
RJT,
Improving RE conditions is from "scorched earth and total despair" December through January to "not so terrible" now.
Seasonally adjusted sales have increased over the last few months.
From Edmonton CMHC Housing Now.
Sales S.A.
Aug 1573
Sep 1771
Oct 1377
Nov 1230
Dec 1019
Jan 1085
Feb 1172
That is a 15% increase in sales after taking into account normal seasonal adjustments. I calculated Feb using the ratio of last year's adjusted and unadjusted numbers.
If there are 1300 sales in March that would be 1204 seasonally adjusted. Nothing spectacular, but an improvement.
Year over year sales are down but so are listings and inventory. This improvement does not necessarily mean bottom, as we have already seen two periods of improvement since the peak.
1. Jan 2008 after the terrible sales the previous fall.
2. Aug-Sept 2008 the market showed some strength.
The YOY wage is up, good indeed. however MOM wage is down some %2 from January to February (Jan $24.87/h -> Feb $24.36/h), then you have a %2.1 inflation rate, so all and all the affordability to buy anything has decreased despite the low interest rates.
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