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Fewer homes sold in Lethbridge in 2018 compared to 2017, but LDAR optimistic about 2019

Jan 15, 2019 | 2:09 PM

LETHBRIDGE – It was an interesting year in local real estate, as during 2018 more homes were listed for sale in Lethbridge, but fewer were actually sold.

CEO of the Lethbridge and District Association of Realtors, Cathy Maxwell, says the year to date dollar volume – including commercial, farming and rural properties as well as homes – for December 31st, 2018, came in at $693-million.

“That is a slight decrease of about six percent from 2017 numbers, which came in at $740-million. If you translate that into the actual number of listings year to date, 2018 we came in at 2,548 listings and in 2017 we were at 2,638. We dropped about 3.4 percent, so we have seen a bit of a decline but not anything that should hurt us too badly,” Maxwell said.

Of those listings in 2018, 1,513 were sold compared to 1,608 sales in 2017.

One of the main factors behind the number of listings, as it has been over the last couple of years according to Maxwell, is the federal government mortgage stress tests.

New federal guidelines came into effect at the beginning of 2018 requiring all federally regulated financial institutions to vet borrowers’ applications using a minimum qualifying rate equal to the greater of the Bank of Canada’s five-year benchmark rate or their contractual rate, plus two percentage points.

“They’ve really played a part in this decrease. In Lethbridge, we have a variety of industries here, we’ve got the health services, the college and university, we’ve got manufacturing, so we’re somewhat insulated from a real decline,” Maxwell said, adding in other larger cities like Calgary they’re suffering quite significantly more than Lethbridge.

It’s hard to describe the numbers as a real trend, more like moderate moves up and down in the market, because Maxwell says looking back at even 2016 numbers, the total dollar value came in at $730,000 which was lower than 2017.

“Then we went up in 2017 and went down a little bit in 2018. I think for 2019, we don’t have a crystal ball of course, but our economy in Alberta is decent. Lethbridge, I think is set to have a good year, we have a lot of good industries here opening soon. With Cavendish, Richardson Seeds and others, I think we’re set up here. We’re going to see a solid market for next year but having said that we do have a fair bit of inventory.”

For residential inventory on the nation-wide Multiple Listing Service, there’s about 10.7 months worth of inventory. What that means is that if nothing else got listed, and the sales continued at the same rate as we’ve seen, it would take about 10 months to get through them.

“That is higher than what we would like to see, I’d say 4-5 months is about the most you’d want for a nice balanced market,” Maxwell stated. “It’s going to be very important for vendors to price appropriately. I would suggest that this is not the market to test in, for people looking to put their house up and see if it sells, you’re going to have to price it right, present it right to attract buyers and to stand out from 10 months worth of inventory.”

According to the year-end figures from the Lethbridge and District Association of Realtors, owners who listed their homes for sale in Lethbridge saw an average of 69 days on the market.

“With this much inventory, you will probably see the listing prices take a hit a little bit. People are going to have to bring them down to set themselves apart, so if everyone is doing that, you’ll see the general price going down.”

The average house price in the City of Lethbridge for 2018 is about $284,000 right now, compared to last year when it was about $286,000.“That’s pretty negligible, it was about a one percent decrease. We’re sitting pretty good, but if everyone decides they need to set their house apart you could see the average price potentially go down,” Maxwell explained.

It could be an interesting year to see where things end up for real estate professionals, and Maxwell says there’s movement in the market to back that up.

“Some of the price points we see the most movement in are around the $240,000-$300,000 range. We have had some during the year around the $750,000-mark sell, about 20 of them, which isn’t too bad. Every price point is selling, but the entry market level has seen the most movement.”