The average monthly sale price of a single-family home in the Calgary real estate market hit $274,126 in April.

It's a $31,000 increase over the same average posted in April 2004 and $55,000 higher than the average price the Edmonton Real Estate Board (EREB) posted in the same month of this year.

But hang on to those hats.

When it comes to residential sticker shock, Fort McMurray is Alberta's unabashed leader.

File photo by Kenton Friesen, Business Edge
Fort McMurray boasts a red-hot housing market and new home construction has been unable to keep pace with demand in the hub of the Alberta oilsands.

The average price of a single- family home in that city as of April 2005 hit a whopping $412,785, a number local realtor Lance Bussieres describes as "deceptive" given that it includes several sales above $500,000.

Market "blips" such as that aside, residential real estate prices are climbing in the city renowned as the hub of the world's oilsands industry, says Bussieres, president of the Fort McMurray Real Estate Board (FMREB).

In March, the average price of a single-family home in that city hit $356,571 "and right now we're sitting at about $370,000," says Bussieres.

That's about $100,000 over the average price for 2003.

And what do you get for your money? A single-family home many Albertans would describe as modest. A quick review of recent MLS listings for that city shows one three-bedroom home listed at $409,900. Built in 2002, this two-storey home spans 1,262 sq. ft.

With low inventory driving up prices, buyers can expect multiple offers on homes between $350,000 and $400,000, says Bussieres. Anything under $300,000 sells very quickly.

The story's not all that different in Red Deer, where the real estate industry has the "lowest inventory we've ever had for resale homes," says Janice Resch, president of the Red Deer District Real Estate Board.

In April 2005, Red Deer recorded 1,081 active listings, a decrease of 20 per cent over MLS figures for the same month last year. "We have a lot of first-time buyers out there because of mortgage rates and we have a lot of people transferring to Red Deer because of the employment market," says Resch.

"The head offices may be in Calgary - but all the worker bees are living in Red Deer."

With daily air flights to Fort McMurray, some of them are also living in Red Deer and commuting to jobs and temporary housing in Fort McMurray, says Resch.

Low inventory aside, residential housing prices in Red Deer are about half as much as in Fort McMurray. These days, a typical 1,200-sq.-ft. three-bedroom home in Red Deer, including a detached garage, hits the market for about $200,000.

A robust oil and gas economy impacts housing demand across the province, adds EREB president Jim Kulak. Edmonton expected housing prices to rise by about six per cent overall by the end of 2005. By mid-May, they'd already hit eight per cent with no sign of a market slowdown on the horizon.

The average price of a single-family home in Edmonton hit a new high of $218,901 in April, up 10.8 per cent over April 2004. "I don't see anything coming up that will have any kind of negative impact. I think the market's going to be moving at a steady pace (throughout the year)," predicts Kulak.

Like Bussieres, Kulak says low interest rates are key to the housing market's current strength. That, combined with strong employment, is changing the way buyers approach a sale, adds Kulak. Instead of looking at the sale price, today's buyers are apt to look at mortgage rates and calculate how much they can afford to pay. They're asking, "if I can pay $1,000 a month, how much home can I buy for that?" says Kulak.

Information about Fort McMurray's labour market notes every job in the oilsands industry creates at least two jobs in the Regional Municipality of Wood Buffalo, with a population of about 58,000.

The building strength of oilsands activity, along with a healthy oil and gas industry overall, is arguably a factor in the number of realtors plying their trade around the province.

The EREB, for example, currently has about 2,700 realtors. That's the highest number recorded since the boom times of the early 1980s. Kulak says there's no question economic activity in Fort McMurray directly affects oil service-related industries in the Edmonton area, boosting real estate markets in the process.

The 4,700 realtors registered with the Calgary Real Estate Board also rivals a record set in the months preceding the National Energy Plan.

Fort McMurray currently has about 110 realtors, an all-time high over recent years, when the organization typically had 65 or fewer realtors, says Bussieres.

That's a lot of realtors given the current state of the market, he adds. As of late May, the FMREB listed about 70 single-family homes for sale. Given the community's population, Bussieres says a more balanced supply and demand market would have at least 300 homes in that category for sale at any given time.

According to a new study released last week by Royal LePage Relocation Services, Fort McMurray has the nation's second-largest corporate housing market (behind Toronto), which provides fully furnished lodging for employees staying a minimum of 30 days.

Compared to other Canadian cities, the 980 units in Fort McMurray are occupied for the longest period of time (90 days) and have the lowest vacancy rate (one per cent in the summer; two per cent in the winter).

That report predicts a 14-per-cent increase in the number of rental units in 2005 and a five-per-cent increase in rent. The average price per month of a one-bedroom corporate housing unit in Fort McMurray is $2,905.

Bussieres says cost-of-living allowances offer a kind of double-edged sword to the Fort McMurray housing market. While they make housing more affordable for some employees, they skew the market for others by pushing up rent and, by default, housing prices.

If there's a bright light on the Fort McMurray housing horizon, it's that the province and city are working to open more land for residential development. Better yet, the long-term strength of the oilsands means buyers should expect their investment to appreciate, says Bussieres.

(Joy Gregory can be reached at joy@businessedge.ca)