The month of March gave us much of the same as last month in terms of market conditions, as the market continues to be in heavy Sellers market territory as we have a lack of listed properties available. Having said that, we are far from a "runaway train" so to speak, as the increases were quite reasonable considering the lack of listings. Below are some key metrics for both Southern Alberta as well as the City of Lethbridge.
Sales transactions across Southern Alberta were up 8% when compared to last year. Average sale price rose 6% over last year which is pretty steady and the number of listings continues to lag behind last year by approx 25%.
City of Lethbridge
Sales transactions in the city showed a 17% increase when compared to March of 2021. Average home price showed a nice healthy increase of 7.5% when compared to the same month last year. Again, the common theme is that listings are down. In the city they were also off 26% when compared to a year ago.
What do we see?
We really don't see market conditions changing dramatically in the near term. We do think that as we head deeper into spring, there will continue to be listings coming on that will hopefully be enough to satisfy the current demand from buyers.
We are fully expecting that the Bank of Canada will be very aggressive in the short term by increasing their interest rate. In fact there is a possibility that they will increase .5% in the next announcement which is right around the corner. So what does that mean? Rate increases correlate to how much the banks and mortgage companies can purchase money from the government. Then in turn they loan this money to you. As the interest rate increases so does a variable mortgage.
Fixed mortgage rates are calculated completely differently. Many factors can affect fixed mortgage rates.The single biggest factor is Government of Canada bond yields. Banks actually use the 5-year bond yield market to determine their fixed mortgage rates, using the forecasted earnings from bond investments to cover the costs and possible losses incurred through their mortgage market. Important to know, recently fixed rates have been increasing much faster than variable rates.
These interest changes will most likely slow demand a bit but rest assured our markets across Southern Alberta are strong for many reasons. Even though we have seen price increases we are still considered very affordable as compared to other markets across the country. More people are relocating to Southern Alberta from out of province to take advantage of the home price imbalances across the country. Even our closest Metro City (Calgary) is posting an average single family home price that is more than $250,000 higher than ours. Lethbridge is a great market to buy and sell.
I hope this helps you understand what the real estate market is going through. If you are thinking of making a change we need to get together and develop a plan that works for you. Having a good Realtor to work with has never been more important. Some people feel it's a pretty easy time to sell their own home. It's also pretty easy to sell underpriced, or worse yet sell and and not be able to find a home to move into. I'm here to make sure neither of those situations happen.
Wishing you happiness, great health, and prosperity throughout the remainder of 2022.
Long Live Ukraine And May God Bless Us All!