Housing starts have slowed in Okotoks after the first quarter of 2016, but the value of construction projects in town have increased and homes are still selling.
The Town issued 30 residential building permits between January and March, down from 47 during the same time period in 2015. In its 2016 budget, the Town projected 200 housing starts, about 16 or 17 per month.
Non-residential construction has increased in activity, including new buildings, renovations and improvements bring total value of construction in Okotoks to $28 million, a $6 million increase over the first quarter of 2015.
Rob Mueller, Okotoks permit/inspection/assessment manager said the residential situation reflects what has been happening throughout Alberta with the economic slump.
“It’s an average of about 10 starts per month, which is less than we projected for our budget, but we still seem to be one of the busiest municipalities in southern Alberta,” said Mueller.
He said reports from Alberta Treasury Branch, the Canada Mortgage and Housing Company and colleagues from other municipalities rank Okotoks ahead of many municipalities for first quarter growth.
The main reason is an increase in the non-residential sector – commercial, industrial and institutional properties, he said.
“For the past several years it was our residential sector that produced most of the construction growth,” said Mueller. “We’re seeing it reverse now, and the rise in non-residential permit and construction values are ahead of last year despite slower housing starts.”
Economic development manager Shane Olson said industrial development has hit record levels during the first quarter of 2016, at $8 million from January to March. By comparison, he said, industrial construction value was $355,000 in 2010.
Commercial development has also increased significantly, though not at a record level, to $9 million in the first quarter. In 2015, Okotoks saw a year-end total of $4 million in commercial development.
“As we continue to approach a 30,000 population these industrial and commercial developments are key,” said Olson. “These numbers are significant, and a good indication that people want to do business in Okotoks.”
He said the busiest area in town this quarter was the Southbank commercial district, which will soon see not only Save-On Foods and the Southbank Medical Centre, but also a microbrewery, a carwash, a three-storey office building and Okotoks’ third Tim Horton’s.
“More retail help support future housing developments and real estate,” said Olson. “The more services we add the more we’re attracting people to town.”
The real estate market in Okotoks can use all the help it can get after a decline in activity over the past year as the economy slumped.
Brad Pond, realtor with MaxWell South Star Realty, said he’s optimistic, as his first quarter has picked up over last year.
“Buyers are starting to figure out we’re going to bump along the bottom for the rest of the year, but prices aren’t really going to be dropping,” said Pond. “Some people have been treating the real estate market like a shoe sale. They think they’re going to get 30 per cent off if they hold out toward the end, but it’s not working like that.”
Sellers have also been digging in their heels and holding out for list price, unless they are motivated to sell quickly, he said. Some owners have taken homes off the market rather than lower asking prices, he said.
Though it’s leaning toward a buyer’s market, Pond said he feels Okotoks real estate is well-balanced going into the second quarter, with buyers starting to make offers.
He said homes around $400,000 are still selling well, and first-time buyers and sellers and keeping real estate afloat.
“There are a lot of first-time buyers and first-time sellers,” said Pond. “Those are people who bought a home in the past few years, and maybe now they’re expecting a child, so they’re taking this opportunity to sell and move into a bigger home.”
The number of days houses stay on the market has not changed significantly since the fall, he said, hovering around 60 days. It is still about twice as long as two years ago, but is remaining steady, he said.
Ponds said it’s all about having the right home on the market, and making it affordable and competitive.
“It’s price and pristine that’s selling right now,” he said.