October 12, 2010
Lethbridge Real Estate - Where are Prices Headed?
I get asked at least once a week from a curious friend or past client to predict where prices are going in this crazy market. Most often they are simply curious and not actually interested in buying real estate or selling real estate, but they are interest in making conversation about the issue.
Quite frankly, the economy in Lethbridge is strong. Our unemployment rate is low, our vacancy rate is low, and most consumers are optimistic. However, the same cannot be said of the rest of the world or our neighbors an hour south in the USA.
As the US market continues to crash, and I believe that it is only about half done so far, the Canadian Dollar will continue to rise. I expect to see the Canadian Dollar reach $1.20 by next summer, along with the price of Gold, Silver, and other commodities which will rise too. As this happens, it makes it harder for us to sell our resources to the world. This plays a large part indirectly to answer the question of where prices are headed for Lethbridge real estate.
Despite our good fortune here, the number of listings coming on the market continues to rise, while the number of sales wer day/week/month continues to decline. Consumers simply do not want to make a purchase when the economy around them is under pressure. Because of this fact the size of the listing inventory has been growing and will continue to grow in the short term. This growing inventory means that sellers who are serious and motivated need to be priced at or below market value if they want to have any chance of selling. Only the most aggressively priced homes in lethbridge are selling as a result.
These aggressivley pirced sales become the comparables used by appraisers to determine future valuations, and as a result the trend is downward. This means that Lethbridge home prices will go down in the short term. It does not mean that they are crashing or that they will never recover, but in the short term I would expect that homes will be between 5 and 10% cheaper in the next 6 months.
Does this mean that it is not a good time to buy? Not necessarily. If you are seeking a hard to find property or are using a good real estate agent to help find a bargain, there may be a property out there waiting for you. Also, interest rates on mortgage financing are at amazingly low levels which can either allow you to aggressivley pay off yuor mortgage or dramatically lower your monthly expenses.
Comments(6)