Sluggish activity on the residential resale market has caused Canada Mortgage and Housing Corp. to lower its expectations for Central Alberta Realtors this year and next.

In its housing market outlook, which was issued on Monday, CMHC projects that 2,900 local home sales will be processed through the Multiple Listing Service this year, down from the 3,770 sales recorded in 2009. Next year’s figures are anticipated to be only slightly better, with 2,950 MLS sales in this region.

The national housing agency’s previous outlook, released on Aug. 31, forecast 3,000 resales this year and 3,100 in 2011. In May, it was calling for 3,500 resales this year and 3,700 in the next.

The projected 23.1 per cent decline in the local resale market from 2009 to 2010 is the greatest among those forecast for Alberta’s seven largest urban centres. Edmonton and Calgary are expected to record 18.5 and 18.4 per cent fewer sales respectively in 2010, with Lethbridge down 13 per cent, Medicine Hat 6.5 per cent and Grande Prairie 5.5 per cent.

CMHC expects the Regional Municipality of Wood Buffalo to have 4.8 per cent more home sales this year than in 2009.

As for anticipated average prices in the local residential resale market, CMHC held firm on its previous projections of $270,000 this year and $273,000 in 2011. Last year, the average was $264,417.

“Changing market conditions have removed the sense of urgency to buy as downward price adjustments have delayed some transactions,” said CMHC in its analysis for Alberta.

“The current buyers’ market conditions will transition to balanced conditions, but not likely before next spring.”

It added that an expanding provincial economy should help in the future.

CMHC also scaled back its expectations with respect to new residential construction.

Its latest housing market outlook projects 680 building starts in Red Deer this year: 410 single-detached homes and 270 units in multi-family developments.

It’s also anticipating 680 starts next year, with 415 in the single-detached category and 265 multi-family projects.

In its August forecast, CMHC was anticipating 720 housing starts in Red Deer this year and 770 in 2011. In May, it was projecting 900 starts for 2011.

However, its current outlook for 2010 still represents a 36.8 per cent improvement over 2009, when there were 333 single-detached and 164 multi-family starts in Red Deer for a total of 497.

Elsewhere in Alberta, 2010 housing starts are expected to be up by 53.6 per cent in Edmonton, 44 per cent in Calgary and 13.2 per cent in Medicine Hat. Wood Buffalo is projected to decline 19.6 per cent, with Lethbridge 15.1 per cent lower and Grande Prairie off 6.1 per cent.

CMHC said a growing inventory of single-detached homes in Alberta will cause builders to ease the pace of construction over the balance of this year, but things should pick up in 2011.

Market conditions remain favourable for buyers, it added, and an improving labour market should stimulate demand for housing.

Multi-family construction has also slowed as a result of increased inventory, said the agency, and building in this category will likely remain slow in 2011.