Real estate expected to heat up with the weather
SLOW START TO THE YEAR FOR LOCAL MARKET
While the Lethbridge real estate market is a little sluggish to start the year, admits Lethbridge and District Association of Realtors CEO Cathy Maxwell, she expects that to change with the coming spring weather.
“We are heading into spring market, and if this darn weather can break, coming up here is usually when it gets busy,” she said. “Cold weather does play a part, I believe, because if you don’t need to buy right now people will hold off a bit because it is physically hard to go look at houses when you can’t walk on the sidewalks and the snow is piling up.”
The number of houses sold so far this year is virtually the same as those sold over the same time last year, says Maxwell, but the prices they are going for are about three per cent cheaper.
“The average house price in the City of Lethbridge, we saw about a three per cent decrease overall year-over-year,” she confirmed. “Last year we were sitting at $278,000 as an average home price; right now were are sitting at $272,000.”
According to Maxwell, new mortgage rules, which came into effect Jan. 1, have put a bit of a drag on the market.
“It is affecting some people’s ability to buy,” said Maxwell. “Or it is affecting their desire to buy higher; many are opting to buy something just a little bit cheaper. The main rule which is affecting this is the one which states all people have to get approved at a higher interest rate even though they are going to be paying the lower interest rate. They might still be buying a $300,000 house, but it is like they are going to be buying, under the new rules, a $370,000 house.
“That forces people to recalculate their thinking on what they can afford, or they have to lower their expectations and buy something cheaper. It seems like in this market you hit that $350,000 mark and everything sort of slows. The houses being sold are definitely in a lower bracket right now.”
Another factor, says Maxwell, is there is much more inventory on the market — sitting at about 9.1 months of inventory so far this year compared to an average of five to seven months’ worth in 2017.
“That means there are more houses on the market and the buyers have more choice, so we could call it a buyers’ market,” she said.
Overall, despite a slower start, Maxwell says her members are fairly confident heading into 2018.
“Alberta’s economy is recovering from this two-year recession,” explained Maxwell, “and it looks like from the economic reviews that Alberta’s economy is going to be pretty good, and that the employment levels are going to be stabilizing a bit.”