Residential MLS sales in central Alberta in January were down 33% compared to January 2022 but up 5% compared to December 2022. What a difference a year makes. Last January, the best five year mortgage rates were 2.69% and the market was already humming. And the first half of 2022 was the busiest in history. But all good things have to come to and end and as the federal government pushed up the prime lending rate, financial institutions followed suit with mortgage rates and the market turned back to a more normal pace in the last half of the year.
The assumption was that prices would start to fall like they did in Eastern Canada and on the west coast, but other factors were at work. Strong energy prices and economic growth attracted more than 120,000 people to Alberta in 2022 and some of those bought homes while the rest filled up most of the available rentals. In the meantime, builders were struggling with a shortage of trades and supply problems which made their offerings more expensive than the resale market and new construction didn’t keep up with population growth.
All that economic activity and continued stable energy prices is still attracting people to Alberta while a shortage of available homes keeps the market in balance. That means prices are not going down and we expect a competitive market in 2023.
Market Update for you – as always, we like to keep our clients informed on the current market, whether buying or selling; knowing the market is KEY. If you want to chat, call me anytime at 403 358 9300. #carlstepp #knowledgeiskey #remaxrealtor #centralalbertamarket
Market news to March 15, 2023. Looking to buy or sell? Call me anytime 403 358 9300. #carlstepp #remaxrealtor #changinglivesonehomeatatime #sellingincentralalberta #soldoncentralalberta #residential #commercial #acreage #lakefront #sylvanlake #gulllake #reddeer #blackfalds #lacombe
Market news for May 1 2023 #blackfalds #reddeer #sylvanlake #lacombe
Residential MLS sales in Central in April were up almost nine percent compared to March, but down 26% compared to April 2022. There are two reasons for the drop in sales over the past year – high interest rates and a lack of good inventory. There were 1,854 active residential MLS listings in central Alberta last May and there were 1,436 this May and 252 (18%) of those had sales pending reducing the actual supply to 1,184.
Sources indicate that Alberta’s population increased by about 160,000 people last year through births, in migration from other provinces (mostly Ontario and B.C.) and international immigration. Those people all needed a place to live, whether through home ownership or rental. As a result, the rental vacancy rate is effectively zero and landlords are raising their rents after years of high vacancy rates and low rents. When tenant’s rents go up, they naturally look to home ownership and the starter market heats up creating a surge of demand from the bottom up.
New home construction in Alberta has not kept up with the population increase because of high input costs and material and labour costs driven by shortages. Prices in the resale market will go up in spite of high interest rates driven by an imbalance in supply and demand. Eventually it will be profitable for builders to compete and supply will start to catch up with demand, but that will likely take at least a year to show up in the market.
#carlstepp #knowledgeiskey #remaxrealestatecentralalberta #residential #lakefront #acreages #farms #commercial
