Cold market: Real estate prices continue to decline in Fort McMurray

'We are in a buyer's market,' real estate agent says

Some Fort McMurray property owners have to sell at significantly reduced prices. (Emilio Avalos/Radio Canada)

Fort McMurray's housing market, once among the hottest in the province, has seen prices decline in a big way. 

Since the spike brought about by an oil boom in early-2010s, when a single-family home in the northern community would cost over $700,000, the prices have dropped by hundreds of thousands of dollars, said Melanie Galea, a Fort McMurray real estate agent with RE/MAX. 

"But it's been now levelling out," she said.

Compared to October 2022, the total residential average price in Fort McMurray went down by about 16 per cent, from about $336,000 in October 2022 to about $282,000 in October this year. The price of a single family home, which once was more than $700,000 about a decade ago is now $467,848.

Galea said she believes the price levels that the community has seen over the last few years is what's truly normal for the region. 

Galea said such market conditions are not new for her as a real estate agent, having observed a similar situation in 2015, before the 2016 wildfire.

"I would say the fire actually helped our economy here, and helped the housing industry, because sales definitely started to take off," she said, as the community was being rebuilt. 

Today, Galea said, the hottest market in the is condo and townhouse apartments, as Fort McMurray always has a strong rental market. 

"We're seeing some prices as low as $35,000 for a condo apartment. That becomes appealing for investors." 

There are also a lot first-time home-buyers, she said. 

The housing inventory in the community is steady, Galea said. "I would say right now we are in a buyer's market." 

She said things really started to slow down when the Bank of Canada began raising interest rates last year and "buyers became a little bit more weary of the increased prices." 

Buying preferable to renting

For Kyle Wegner, 32, buying a home was preferable to renting. He's an employee of Finning, an industrial equipment dealer that specializes in Caterpillar products, and works at one of the mine sites near Fort McMurray.

"Rent is very high here, so for me, even in the short term, it's almost saving a little bit of money," he said. 

Wegner moved to Fort McMurray in August 2022. He bought a larger house in the community, before deciding to downsize.

"It's just more fitting to my lifestyle and what I actually need," he said.

His old house was still for sale when he got the keys for his new, smaller home. 

He hopes not to incur a big loss on a sale of his old property. 

"Our goal is to try and do our best to break even, and see how close we can get to that." 

Keeping a business alive

Suzette Nelson, an owner of flooring company Nufloors, is selling a plot on land where a three-storey townhouse the business used to rent to its employees once stood. 

The townhouse burned down during the 2016 wildfire. Nelson said they wanted to rebuild the townhouse, but the 2020 spring flood destroyed Nelson's business — and ended any rebuilding plans.

"Back in in the boom days here, accommodations were very, very difficult. Most businesses would have a place for employees," she said. "It's really sad to see it gone."

The asking price for that plot of land is $75,000, Nelson said. 

"We're open to negotiations," she said. 

"We may or may not get it, but we have a bottom line that we won't go below as well."