The latest interest rate hike from the Bank of Canada has many predicting that the red-hot real estate market of the last couple of years is due to cool off, but those in the Lethbridge market don’t anticipate a crazy shift.
“Yes there’s going to be pauses, but in Lethbridge, I think with the balance that we have and the healthy market that we have, we’re in a good position,” said Stephen Amonson, general manager of Ashcroft Homes. “Nobody should panic.”
Licensed real estate agent Bryce Evans of RE/MAX Real Estate of Lethbridge agrees that the city remains a stable, affordable market that doesn’t see the volatile ups and downs of larger cities; an attractive trait when people consider relocating to the city.
“We are $250,000 less than the average price in Calgary, so we are still seeing quite a few people coming here,” Evans said. “People coming from way bigger centres that have seen a way bigger increase in prices, they’ve been looking around southern Alberta.”
Evans says Lethbridge remains a good place to sell a home, but sellers must price their homes properly.
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“It’s still a seller’s market, but at the same time these interest rates will have a little bit of an impact at taking some of the buyers out of the pool,” he said.
“There have been a lot more listings that have come up here this year, so it is a lot more competitive out there. So making sure that your place is priced right — or making sure that a seller’s property is priced right — is very crucial.”
The market has seen a slight slowdown versus 2021. According to the Lethbridge and District Association of Realtors (LDAR), June was the third straight month that saw year-over-year sales drop in the city. There were 236 units sold, down nearly 11 per cent from June of 2021, at an average residential price of $346,155 — up 6.4 per cent compared to last June.
While new listings were up more than 17 per cent this June versus last, total residential inventory is down nearly three per cent year-over-year in Lethbridge.
Amonson says homebuilders are always trying to fill holes in the market, but they have faced significant hurdles since the onset of COVID-19.
“The dilemma we’re having right now is it takes a lot longer to build a home because of the supply chain issues,” he said. “So those wait times can be exacerbated, and it takes a lot longer to respond to those holes in the marketplace.”
Despite those challenges, Amonson says Lethbridge remains one of the most affordable cities in the country, and he’s seeing a trend towards more balanced inventory in the city.
“Up until a couple months ago we had a real short supply of inventory, and now we’re seeing more homes coming on the market and a little bit more balance to the marketplace,” Amonson said.
“We don’t have an oversupply — either in used inventory or brand new inventory — in fact, in certain segments we’re still quite short, so we’re going to see pricing remain, in my opinion, fairly strong for quite some time.”